Hong Kong-listed Shanghai Fosun Pharmaceutical (Group) announced strategic cooperation, including establishment of a cooperative enterprise in China, with Nasdaq-listed Kite Pharma, through its wholly owned subsidiary to introduce T-cell therapy of Kite Pharma for lymphoma patients.

The cooperative enterprise will be registered in Shanghai, with Fosun Pharma and Kite Pharma owning 50 percent each.

Different from chemotherapy and radiotherapy, T-cell therapy is based on genetical engineering. Patients' body cells are taken out to be genetically engineered and then infused in patients to meet the goal of curing cancer.

Fosun Pharma intends to contribute $20 million while Kite Pharma will contribute with the right to exclusive use of its products and proprietary technology at the value of $20 million. Each of the two parties owns 50 percent equity interests in the cooperative enterprise.

Manufacturing, distribution and use of the products will be conducted in centralized manner which will help to secure safety for patients' benefits, said Arie Belldegrun, chairman, president and chief executive officer of Kite Pharma.

Fosun Pharma will pay another $40 million to the cooperative enterprise for the relevant patent and technology, and the cooperative enterprise will make a milestone payment of $35 million to Kite Pharma, based on research and development progress and market conditions and make a royalty payment for the sale of the T-cell therapy products, which are at the stage of clinical development and waiting for approval from regulatory authorities to be officially launched.

China is the second-largest pharmaceutical market in the world after the US, and there is a huge unmet demand in the treatment for cancer in China, said Chen Qiyu, chairman of Fosun Pharma. The enterprise eyes to bring cutting-edge treatments to patients in need, said Chen.

Chen Saijuna, director of National Research Center for Transitional Medicine (Shanghai) and a Hematology expert, said that T-cell therapy has been given great hope in making breakthroughs in blood cancer treatment.

Before T-cell therapy to be widely used among patients, researchers must find answers to several questions including effects, safety, reoccurrence possibility and timing of using the therapy, and leveraging resources from capital market is expected to help to accelerate the pace of searching, said Chen.