Pfizer Makes a Bold $6 Billion Leap into Cancer Drug Development
In a significant stride towards enhancing its oncology portfolio, Pfizer Inc. announced a groundbreaking licensing deal with the Chinese biopharmaceutical company 3Sbio Inc. on May 20, 2025, which could cost the company up to $6 billion. This move signifies Pfizer’s ambition to enter the competitive market for PD-1/VEGF antibody treatments, which are designed to suppress the immune system’s ability to combat cancer cells.
Details of the Licensing Agreement
Pfizer’s deal involves an upfront payment of $1.25 billion to 3Sbio for the development, manufacture, and sale of the antibody known as SSGJ-707. Moreover, the deal includes potential milestone payments that could reach up to $4.8 billion, contingent on achieving certain development, regulatory, and sales objectives. In addition to these payments, Pfizer plans to make a $100 million equity investment in 3Sbio after the agreement closes, which is expected to occur in the third quarter of this year.
Comparative Insights: Pfizer vs. Merck
To appreciate the magnitude of Pfizer’s undertaking, it is essential to consider Merck & Co. Inc.’s recent licensing agreement with LaNova Medicines Ltd. in November 2024. Merck’s agreement for the PD-1/VEGF antibody LM-299 saw the company shelling out $588 million upfront, with potential milestone payments totaling $2.7 billion. Notably, Merck’s existing cancer treatment, Keytruda, brought in a staggering $7.8 billion in sales for the year 2024.
Market Reaction and Analyst Insights
Following the announcement, Pfizer’s stock saw a 2.4% uptick in morning trading, while Merck’s shares rose by 1.7%. However, analysts have expressed concerns regarding the high-risk nature of Pfizer’s investment in SSGJ-707. As Carter Gould, an analyst at Cantor Fitzgerald, noted, while the deal positions Pfizer in the PD-1/VEGF race, it comes at a considerable cost and with significant risk due to the company’s constraints on cash flow. In contrast, Merck currently maintains a leading edge in the oncology market.
Another analyst, Cory Kasimov from Evercore ISI, indicated that obtaining U.S. manufacturing capabilities is a strategic response to the current tariff environment. Notably, while Pfizer’s approach shows it could be in the third position among its competitors, it finds itself considerably behind Merck.
Future Prospects for SSGJ-707
Despite the associated risks, Pfizer remains optimistic about SSGJ-707’s promising efficacy and safety data. 3Sbio has plans to initiate the first Phase 3 study for SSGJ-707 in China within this year. Analysts are cautiously optimistic, as the drug is reportedly ahead in development compared to Merck’s LM-299, which is still in the early stages of patient enrollment in Phase 1 clinical trials.
Current Landscape in the PD-1/VEGF Race
As it stands, the PD-1/VEGF race is heating up with multiple contenders: Summit Therapeutics Inc. secured a licensing deal with Akeso Inc. in January 2023, placing Summit in the lead. Following closely is BioNTech SE, which recently acquired rights to the PD-L1 and VEGF-A targeting antibody BNT327/PM8002 through its acquisition of Biotheus.
Conclusion
Pfizer’s ambitious pursuit of SSGJ-707 amid stiff competition indicates its willingness to invest heavily in the fast-evolving oncology landscape. While the company undeniably faces numerous challenges, including the need for the drug to exceed market expectations to justify its high costs, this strategic move reflects Pfizer’s determination to regain a competitive foothold in the lucrative cancer treatment market. As developments unfold, stakeholders will be closely monitoring the landscape post-deal closure to assess the viability of Pfizer’s latest endeavor.
