By Sriparna Roy
(Reuters) -BeiGene and Swiss drugmaker Novartis (LON:0QLR) have terminated a 2021 deal to jointly develop the Hong Kong-listed company's cancer drug, the companies said on Tuesday, marking the second such discontinuation in just over two months.
BeiGene will regain full global rights to the drug, tislelizumab, or Tevimbra, with no royalty payments due to Novartis, which will continue to manufacture it.
Novartis had paid $650 million to gain those rights in 2021.
The drug belongs to a class of treatments known as anti-PD-1 monoclonal antibody, which helps the body's immune system detect and attack tumors.
Similar drugs such as Keytruda from Merck and Opdivo from Bristol-Myers Squibb (NYSE:BMY) have been approved since 2014, and Keytruda has become the dominant treatment for one of the largest lung cancer markets.
Novartis said the deal termination came after it reassessed its strategy in the PD-1 inhibitor category.
"Since we entered the agreement in January 2021, the PD-1 inhibitor landscape has changed considerably," it said.
In July, the companies had pulled the plug on a deal for BeiGene's experimental cancer drug, ociperlimab.
Beigene executives told Reuters they hoped to expand the use of Tevimbra across several countries. On Tuesday, the European Commission green-lighted the drug, which is already approved in China.
The decision to end the partnership is much more strategically important for BeiGene as a stepping stone to build a franchise in solid tumors than as a driver for sales by itself, said TD Cowen analyst Yaron Werber.
The U.S. Food and Drug Administration in 2021 delayed its review for the drug as a second-line treatment in patients with esophageal cancer due to COVID-19 curbs that prevented the regulator from conducting inspections in China.
The company remains optimistic about the review and hopeful of a conclusion by the end of this year, said Mark Lanasa, chief medical officer at BeiGene's solid tumors unit.