DPP-1 inhibitor

Fosun Pharma Bets on DPP-1 Inhibition for Global Respiratory Market with $645M Out-Licensing Deal

SDW Editor

— 3 min read

On August 11, Fosun Pharma took another step in its strategy to globalize its innovation pipeline, out-licensing its oral small-molecule DPP-1 inhibitor XH-S004 to San Francisco-based Expedition Therapeutics for territories outside mainland China, Hong Kong, and Macau. The deal could be worth up to $645 million in upfront, milestone, and sales-based payments, underscoring growing interest in neutrophil-targeted approaches for chronic respiratory disease.

Mechanism and Clinical Positioning
XH-S004 targets dipeptidyl peptidase-1 (DPP-1), a serine protease activator involved in neutrophil-driven inflammation. By inhibiting DPP-1, the drug aims to blunt the protease cascade that fuels tissue damage in diseases like bronchiectasis and COPD.

Lead Indications:

  • Non-cystic fibrosis bronchiectasis (NCFB) — Phase II in China.
  • COPD — Phase Ib in China.

Competitive Status
No oral small-molecule DPP-1 inhibitor has reached the market to date. The most advanced program globally, Insmed’s brensocatib, reported positive Phase III ASPEN trial results in May 2024 and is under FDA Priority Review, with a PDUFA target action date of August 12, 2025. If approved, brensocatib would be the first-in-class DPP-1 inhibitor, setting a regulatory and commercial precedent that could benefit fast-followers like XH-S004.

Strategic Rationale
Fosun retains China rights, leveraging its domestic clinical and commercial infrastructure, while Expedition — a US biotech founded in 2024 with backing from Venrock, BVF Partners, and Qiming Venture Partners — will drive development and commercialization elsewhere.

For Fosun, the transaction:

  • Validates Mechanism — Brensocatib’s Phase III success and imminent FDA decision have de-risked DPP-1 as a therapeutic target.
  • Shares Risk — Global respiratory trials are capital-intensive; partnering transfers much of that cost and regulatory execution to Expedition.
  • Secures Future Upside — Milestones and royalties tie Fosun’s earnings to eventual market performance without diluting focus on domestic commercialization.

Market Context
Bronchiectasis and COPD together affect hundreds of millions globally, with limited targeted treatment options. DPP-1 inhibition represents a mechanism-based approach to neutrophilic airway inflammation, potentially relevant to multiple chronic inflammatory lung diseases.

China’s respiratory disease burden is particularly high—COPD alone affects over 100 million people. The absence of approved DPP-1 inhibitors for bronchiectasis leaves a significant unmet need, making Fosun’s bet on this mechanism strategically timed. With the brensocatib FDA decision imminent, Fosun is positioning itself to ride the potential wave of class validation, echoing the market acceleration seen in China’s PD-1/PD-L1 space after the first global approvals.

Analysts estimate the addressable market for neutrophil-mediated respiratory disease therapies could exceed $1B, assuming clinical benefits extend beyond bronchiectasis. Oral dosing offers an advantage over biologics in terms of patient adherence and healthcare system adoption.

If brensocatib is approved this week, the entire class could see a “validation boost”—accelerating investor interest, trial recruitment, and regulatory engagement for pipeline candidates like XH-S004.

Pipeline Implications for China
This deal marks one of the more substantial ex-China licensing agreements in China’s respiratory drug pipeline this year. It also reflects:

  • Growing BD activity in post-COVID respiratory innovation.
  • China’s shift from licensing-in to exporting first-in-class candidates.
  • Increased global willingness to partner earlier in development when related molecules have proven clinical benefit.

SinoDrugWatch Take
Fosun’s XH-S004 program now sits in a sweet spot: a validated mechanism, differentiated oral formulation, and a partner with resources to push into ex-China trials. With brensocatib’s FDA decision imminent, the competitive clock is ticking. If Expedition can execute quickly, XH-S004 could be among the first wave of approved DPP-1 inhibitors globally—capitalizing on the momentum of class validation while still differentiating on profile and positioning.

For China’s biotech sector, this deal signals that the export window for novel small molecules is wide open—especially when paired with fresh global clinical readouts that reduce perceived target risk.

Sources:

1.      Fosun Pharma. (2025, August 11). Fosun Pharma Announces Out-Licensing Agreement of Oral DPP-1 Inhibitor XH-S004 to Expedition Therapeutics. [Press release]. Retrieved from Fosun Pharma official website: https://www.fosunpharma.com/en/news/

2.      Insmed Incorporated. (2024, May 29). Topline Results from Phase III ASPEN Trial Demonstrate Brensocatib Significantly Reduces Pulmonary Exacerbations in Bronchiectasis. [Press release]. Retrieved from https://www.insmed.com/news-events/press-releases/

3.      U.S. Food and Drug Administration (FDA). (2025). FDA grants Priority Review to Insmed’s Brensocatib for Non-Cystic Fibrosis Bronchiectasis. Retrieved from https://www.fda.gov/drugs/

4.      SinoDrugWatch. (2025, August). Fosun Pharma’s Strategic Global Licensing of XH-S004: Context and Market Implications. Retrieved from https://www.sinodrugwatch.com/

5.      F6S. (n.d.). Expedition Therapeutics Inc. Retrieved from https://www.f6s.com/company/expedition-therapeutics-inc

6.      BizProfile. (n.d.). Expedition Therapeutics Inc. Corporate Registry Details. Retrieved from https://www.bizprofile.net/ca/san-francisco/expedition-therapeutics-inc

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