Fosun Pharma announced on August 11, 2025, that its subsidiary Fosun Pharma Industrial has entered into a significant licensing agreement with Expedition Therapeutics Inc. for XH-S004, an orally administered dipeptidyl peptidase 1 (DPP-1) inhibitor. The deal grants Expedition global development, manufacturing, and commercialization rights for the novel respiratory drug outside of Chinese Mainland, Hong Kong SAR, and Macau SAR, with potential total payments reaching $645 million.
Financial Structure and Terms
Under the licensing agreement, Expedition will pay Fosun Pharma up to $120 million in upfront payments and development milestone payments. Additionally, the deal includes up to $525 million in sales milestone payments based on annual net sales of XH-S004 in the licensed territories. Fosun Pharma retains all rights to develop, manufacture, and commercialize XH-S004 in Chinese Mainland, Hong Kong SAR, and Macau SAR.
Novel Mechanism of Action
XH-S004 represents a first-in-class therapeutic approach as a small molecule orally administered DPP-1 inhibitor. The drug reduces inflammatory responses and blocks infection cycles and airway structural damage by inhibiting DPP-1 and the neutrophil serine proteases activated by it. Currently, no small molecule orally administered inhibitors with the same mechanism of action have been approved for marketing worldwide.
Clinical Development Progress
The drug is currently advancing through multiple clinical trials in China. XH-S004 is in Phase II clinical trials for the treatment of non-cystic fibrosis bronchiectasis and Phase 1b clinical trials for chronic obstructive pulmonary disease (COPD). This clinical progress demonstrates the compound's potential across multiple respiratory indications characterized by neutrophilic inflammation.
Leadership Perspectives
"We are very pleased to have reached this collaboration with Expedition. XH-S004 is an innovative drug independently developed by Fosun Pharma for the treatment of respiratory system diseases, and its unique mechanism and clinical value have been highly recognized by our partners," stated Chen Yuqing, Chairman of Fosun Pharma. He emphasized that the collaboration would provide strong support for global development and commercialization, expanding accessibility to enable global patients to benefit from this innovative therapy.
Yi Larson, Chairman and CEO of Expedition, expressed enthusiasm about the partnership, noting, "XH-S004 is an exciting compound that targets neutrophilic inflammation, an important underlying driver of a number of chronic respiratory diseases. We look forward to partnering with Fosun Pharma in the development of XH-S004 for COPD and other neutrophilic inflammatory diseases to address the significant unmet medical need."
Strategic Implications
This licensing deal represents a significant milestone for Fosun Pharma's internationalization strategy, part of their broader "4IN" approach encompassing Innovation, Internationalization, Intelligentization, and Integration. The agreement validates the clinical potential of XH-S004 and positions both companies to address substantial unmet medical needs in chronic respiratory diseases globally.
Expedition Therapeutics, incorporated in Delaware in March 2024, specializes in developing innovative therapies for autoimmune diseases. The company's core management team brings extensive experience from multinational pharmaceutical and biotechnology companies, with backing from well-known U.S. investment institutions with significant industry investment experience.
