Fosun’s $670 million deal with Sitala keeps pointing towards West’s appetite for Chinese innovation

Fosun Pharma has licensed ex-China rights of its phase 2 immune-modulated disease drug, FXS6837, to UK-based Sitala Bio in a deal worth up to $670 million.

Why it matters: The partnership gives Sitala access to a promising inflammatory disease drug and reflects growing Western interest in Chinese pharmaceutical innovation. It also helps Fosun diversify revenue amid declining performance from older drugs.

Backstory: Sitala Bio, founded in 2021 with backing from Forbion and OrbiMed, focuses on treatments for neurodegenerative and inflammatory diseases. Fosun has been increasingly active in out-licensing its innovative drug pipeline, recently announcing a similar $645M deal with Expedition Therapeutics.

Big picture: As Chinese biopharma companies face domestic pricing pressures (Fosun’s H1 revenue fell 4.7% to $2.7B, partly due to China's volume-based procurement policies), they're turning to global partnerships to monetize R&D assets. Western biotechs, meanwhile, gain late-stage candidates to accelerate their pipelines.

Zoom in: The deal includes $25M upfront, $165M in development and commercial milestones, and $480M in sales milestones. Fosun also receives $5M in Sitala equity. No details were shared about the drug indication, but Fosun mentioned that comparable drugs generated $3.8B globally in 2024.