Pfizer Invests $6B in SSGJ-707 to Boost ADC Oncology Portfolio

Highlights

• Pfizer paid $1.25 billion upfront for ex-China rights to SSGJ-707, with total deal value potentially reaching $6 billion.
• Extensive due diligence included site visits and direct interviews in China to validate the quality of clinical data.
• SSGJ-707’s synergy with Pfizer’s vedotin-based ADCs makes it a strategic oncology asset.
• Milestone payments suggest a performance-based structure for the full $6 billion deal.
• Pfizer is approaching the obesity market cautiously due to pricing risks and inflated asset valuations.

In-Depth Due Diligence on Chinese-Origin Data

Pfizer’s $1.25 billion upfront acquisition of ex-China rights to the PD-1xVEGF bispecific SSGJ-707 from 3SBio marks a high-stakes move in oncology. CEO Albert Bourla recently shared detailed insights into the decision, revealing that Pfizer conducted extensive on-site due diligence in China. As Bourla explained, "We sent teams [to] China. They spent weeks. They went to the sites. They viewed the scans one after the other. They interviewed the physicians that [ran] the study."

Concerns about the reliability of Chinese clinical trial data have lingered since Summit Therapeutics and Akeso’s ivonescimab outperformed Merck & Co.’s Keytruda in a direct comparison. With the stakes high, Pfizer sought to validate the robustness of 3SBio’s data through intensive first-hand review and discussions with investigators. "We didn't do due diligence in a data room. We sent people on-site. We feel very comfortable. I met the CEO. They are credible guys," Bourla said during a Goldman Sachs event.

Deal Structure Tied to Future Success

While Pfizer has paid $1.25 billion upfront, the total value of the deal could rise to $6 billion depending on the commercial performance of SSGJ-707. Bourla clarified that, "Pfizer will only pay the full $6 billion ‘if the whole thing is very successful and sells a lot.’" This indicates that milestone-based payments are embedded in the agreement, aligning compensation with future market success.

Strategic Fit with Pfizer’s ADC Portfolio

SSGJ-707 is seen as a key strategic asset for Pfizer due to its potential to replace PD-1/L1 checkpoint inhibitors and synergize with the company’s growing arsenal of antibody-drug conjugates (ADCs). Many of these ADCs, gained through the Seagen acquisition, feature vedotin as their payload. According to Bourla, "Vedotin has been proven that, because it creates immunogenic cell death, it has synergistic effects with PD-1s."

The hope is that SSGJ-707 will complement Pfizer’s existing vedotin-based ADCs, such as Pacdev, which has shown strong synergy with Keytruda. Bourla emphasized the strategic priority of advancing Pfizer’s immunotherapy platform, stating, "For us to have the new, let's say, standard of immunotherapy as part of our portfolio is very strategically important given that we have all the ADCs."

Oncology Deal Criteria Remain Rigorous

Despite having gaps in other therapeutic areas, Pfizer remains highly selective in its oncology investments. Bourla stated, "The bar for Pfizer striking a deal in oncology is much higher than in other therapeutic areas because we have plenty of assets." This underscores why SSGJ-707, with its unique value proposition, stood out even in Pfizer’s well-stocked oncology pipeline.

Obesity Market: Strategic Caution Amid High Valuations

In contrast to its oncology ambitions, Pfizer is taking a cautious approach to obesity. After discontinuing a candidate in April due to potential drug-induced liver injury, the company is reassessing its approach to this highly competitive market. Bourla noted concerns about current pricing expectations, remarking, "We are not going to overpay. And, right now, there are a lot of crazy demands."

Pfizer is reportedly incorporating more conservative pricing assumptions into its obesity asset valuations, aware of the risks and high premiums currently dominating the space. "We see a lot of risk with pricing," Bourla said, indicating that for now, Pfizer is observing rather than participating aggressively in obesity dealmaking.