Herbert Smith Freehills Kramer (HSF Kramer) and its China joint operation partner, Kewei Law Firm, along with Goodwin Procter have advised on a potential USD240 million option agreement between Chinese pharmaceutical company Fosun Pharma and South Korean biopharmaceutical firm AriBio.
Under the agreement, Fosun Pharma will pay an option fee of USD60 million and, when the option is exercised, up to USD180 million in upfront and regulatory milestone payments.
Gavin Guo, managing partner of Herbert Smith Freehills Kewei in Shanghai, and Melanie Bouton, a Sydney-based executive counsel at Herbert Smith Freehills Kramer, led the cross-office team.
“We advised Fosun Pharma on the legal aspects relevant to the transaction, including the structuring and drafting of the agreement including having regard to general regulatory and compliance requirements across jurisdictions for development and potential commercialisation,” Guo told Asia Business Law Journal.
Herbert Smith Freehills Kewei also advised on the option and exclusive licence agreement, and provided support on New York law aspects.
Guo said the transaction required close co-ordination across legal and commercial workstreams. “The transaction was notable for its strategic significance in the biopharmaceutical sector and the opportunity for the parties to combine their respective strengths,” he said.
“From a legal perspective, the focus was to ensure that the agreement provided a clear and workable framework for the continued development and exercise of the option for an exclusive licence, including the allocation of rights, responsibilities and operational obligations.”
The agreement will see AriBio continue developing AR1001, a drug for the treatment of early Alzheimer’s disease, for a global phase 3 clinical trial. Fosun Pharma holds the right to obtain an exclusive licence that covers further development, registration, manufacturing and commercialisation of the drug.
The deal further expands Fosun Pharma’s existing AR1001 rights from China, Hong Kong, Macau and 10 Asean countries to include additional key markets such as the US, Europe and Japan.
