By Fineline Cube 
Shanghai Pharmaceuticals Holding Co., Ltd. (SPH, HKG: 2607, SHA: 601607) announced the termination of its collaboration with Sinorda Biotechnology on the innovative gastric acid blocker X842 through friendly negotiations. The original agreement, signed in October 2021, involved a potential transaction value of RMB 690 million (excluding sales royalties). Sinorda will refund RMB 110 million plus development milestone fees at 3% annualized interest.
Termination Details & Financial Terms
| Agreement Element | Original Terms | Termination Terms |
|---|---|---|
| Execution Date | 08 Oct 2021 | 08 Dec 2025 (termination) |
| Deal Value | Up to RMB 690 million (excluding royalties) | Refund of RMB 110 million initial payment + milestone fees |
| Interest Rate | Not applicable | 3% annualized on refunded amounts |
| Product Rights | X842 rights in China | Rights revert to Sinorda; agreement ceases legal binding |
Product Profile: X842 P-CAB
Mechanism of Action:
- Next-generation potassium ion competitive acid blocker (P-CAB)
- Rapid onset of acid suppression
- Strong and durable therapeutic effect
- Few adverse reactions compared to proton pump inhibitors (PPIs)
Market Context:
- Addresses unmet need in gastroesophageal reflux disease (GERD) and peptic ulcer disease
- P-CAB class gaining market share vs. traditional PPIs in China
- No domestic P-CAB approvals prior to 2023; growing market valued at ¥3 billion (≈ US$420 million)
Strategic Rationale for Termination
- External Market Assessment: Shanghai Pharma cited comprehensive evaluation of market conditions and competitive landscape
- Business Development Alignment: Decision reflects overall strategic portfolio prioritization
- Pipeline Repositioning: Company may redirect resources to higher-priority assets or therapeutic areas
- Financial Recovery: RMB 110 million refund improves cash position; 3% interest partially compensates for development costs incurred
Legal & Operational Implications
- Agreement Status: Automatically terminates; no ongoing legal obligations for either party
- Technology Rights: X842 rights revert fully to Sinorda Bio, which may seek new partners
- Development Halt: Shanghai Pharma will cease all X842-related development and registration activities
- Market Impact: Removes potential P-CAB competitor from Shanghai Pharma’s near-term pipeline
Forward‑Looking Statements
This brief contains forward‑looking statements regarding the financial impact of the termination and Shanghai Pharma’s future pipeline strategy. Actual outcomes may differ due to market conditions, competitive dynamics, and strategic decisions.-Fineline Info & Tech