Spanish Pharma Giant Pursues Licensing Deals with Dozens of Chinese Companies

Spanish pharmaceutical company Almirall is actively negotiating with numerous Chinese firms to secure licensing rights for medicines in other markets. The company's CEO says they're focusing on dermatology treatments, but rising competition is driving up deal costs.

Spanish pharmaceutical company Almirall is actively pursuing licensing agreements with numerous Chinese companies as it seeks to expand its medicine portfolio, according to CEO Carlos Gallardo.

Speaking from Shanghai on Thursday, Gallardo revealed that his company is currently engaged in discussions with multiple Chinese firms to secure rights for various medical treatments that could be marketed in other regions.

“I’m sure my team is talking to dozens of companies at this point in time,” Gallardo stated during the interview.

The pharmaceutical executive explained that Almirall is concentrating its efforts on medical dermatology products within the Chinese market. The company’s particular areas of interest encompass treatments for rare diseases, non-melanoma skin cancer, atopic dermatitis, and psoriasis.

According to Gallardo, dermatology and immunodermatology treatments often have broader therapeutic applications, making them particularly attractive to pharmaceutical companies seeking versatile assets.

While the CEO described the framework for potential agreements with Chinese companies as “very standard,” he noted that increased competition among Western firms is driving up initial payment requirements.

“More and more Western companies are looking into collaborations in China,” Gallardo explained. “And therefore, the more companies looking for collaboration, then that increases demand, and that is inflationary to deal terms. So yes, we’ve seen an increase in the amount of the upfronts, in particular, in licensing deals.”

This trend is reflected in recent market data. In 2022, Almirall entered into an agreement with China’s Simcere Pharmaceutical Group, paying $15 million upfront to obtain development and commercialization rights for an experimental autoimmune disease treatment outside the Greater China region, which encompasses Hong Kong, Macau, and Taiwan.

Industry data from Pharmcube shows that average upfront payments for licensing experimental medicines from Greater China companies have surged to $77.7 million this year, representing a doubling from last year’s $38.8 million and approximately triple the 2021 levels.

These upfront payments typically represent just one component of licensing agreements, which also include milestone payments and ongoing royalties based on product performance.

When asked about projections for future licensing deals with Chinese companies over the next one to two years, Gallardo remained cautious about making specific predictions.

“With deal-making, it’s very difficult to predict whether you’re going to sign one deal in one year or you’re going to sign three,” he acknowledged.