AstraZeneca signs AI research deal with China's CSPC for chronic diseases

(Reuters) -AstraZeneca has signed an AI-led research agreement with China's CSPC Pharmaceutical Group worth up to $5.3 billion, which would help the Anglo-Swedish drugmaker develop therapies for chronic conditions, it said on Friday.

The deal marks the latest effort by AstraZeneca to revive its business in China, its second-biggest market, where it has faced several challenges including the arrest of its China president last year and potential fines related to imports.

Under Friday's agreement, the two companies will collaborate to discover and develop pre-clinical candidates, including a small molecule oral therapy for immunological diseases, with CSPC conducting AI-driven research in Shijiazhuang City.

"This strategic research collaboration underscores our commitment to innovation to tackle chronic diseases which impact over two billion people globally," AstraZeneca executive Sharon Barr said in a statement.

Friday's agreement follows AstraZeneca's announcement in March that it will invest $2.5 billion in a R&D hub in Beijing, and it also marks further investment in AI following collaborations with Immunai, Qure.ai and Tempus AI.

AstraZeneca will pay CSPC an upfront fee of $110 million. The Hong Kong-listed firm is also eligible to receive up to $1.62 billion for reaching development milestones and $3.6 billion linked to sales-related milestones, the groups said in separate statements.

They signed a licensing deal last October in which AstraZeneca agreed to pay up to $1.92 billion to CSPC to develop a candidate which would boost its cardiovascular pipeline.

AstraZeneca and CSPC both have wide-ranging pipeline portfolios, including cancer treatments and those targeting cardiovascular diseases.

However, about 80% of CSPC's total revenue comes from its finished drug segment, according Morningstar analysts. The Chinese group said last month it was in negotiations with third parties on new licensing and collaboration.

Friday's agreement also gives AstraZeneca the rights to exercise options for exclusive licenses for candidates identified as part of the collaboration.

(Reporting by Pushkala Aripaka in Bengaluru and Andrew Silver in Shanghai; Editing by Tasim Zahid and Tomasz Janowski)