Pfizer has entered a $1.25 billion partnership with Chinese biopharmaceutical firm 3SBio Inc. to expand its oncology portfolio amid rising global trade tensions. The agreement centres on SSGJ-707, an experimental cancer therapy in clinical trials in China for non-small cell lung cancer, metastatic colorectal cancer, and gynaecological tumours.
The deal gives Pfizer global rights to develop, manufacture, and commercialise SSGJ-707, excluding China—though it retains an option to commercialise the therapy there too. In addition to the upfront payment, the agreement includes potential milestone payments of up to $4.8 billion. Pfizer will also invest $100 million in 3SBio through an equity stake, once the transaction closes in Q3 2025.
SSGJ-707 has received Investigational New Drug (IND) clearance from the U.S. Food and Drug Administration, enabling broader clinical development outside China. Pfizer plans to produce the drug substance in North Carolina and complete manufacturing in Kansas, reinforcing its strategy to strengthen U.S.-based production. News of the deal pushed 3SBio’s shares up 35% in Hong Kong, bringing its market value near $6 billion.
This high-profile agreement comes as biotech alliances are increasingly impacted by protectionist trade policies. Recent U.S. tariffs on Chinese pharmaceutical ingredients and equipment are reshaping global collaborations and supply chains. Other biotech giants are feeling the strain: Johnson & Johnson’s CAR-T partnership with China’s Legend Biotech has faced rising costs, while AstraZeneca’s $1.2 billion acquisition of Gracell Biotechnologies may encounter delays if cross-border material flows are restricted.
Such tensions have led to a sharp decline in biotech M&A activity—deal volume fell 38% in Q1 2025—as investors become wary of transnational risks. Many are now redirecting capital to Chinese startups with de-risked Phase II assets, while Western firms are accelerating regionalisation and reshoring key manufacturing functions.
Pfizer’s decision to anchor SSGJ-707 production in the U.S. reflects this growing trend.
Across the industry, companies are investing heavily in domestic infrastructure to limit their exposure to tariffs and trade disruptions. The shift extends beyond U.S.–China relations; Washington has hinted at possible tariffs on EU pharmaceutical imports, prompting warnings from European regulators about the risks to global supply chains and medicine access.
In response, deal structures are evolving. Companies are increasingly using contingent value rights (CVRs) to tie deal value to post-tariff performance milestones, while also favouring therapies with simpler manufacturing processes to reduce logistical complexity.
As international rules shift, adaptability in deal-making and supply chain planning is becoming just as crucial as scientific excellence.
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