UPDATE 2-Bristol Myers to pay $800 million to Chinese drugmaker to develop cancer drug

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By Michael Erman

Dec 11 (Reuters) - Bristol Myers Squibb said on Monday it will pay $800 million up front and up to $8.4 billion to Sichuan Biokin Pharmaceutical to develop and commercialize one of the Chinese drugmaker's cancer treatments outside China.

Bristol Myers said it will pay Sichuan unit SystImmune up to $500 million in contingent near-term payments to co-develop an antibody-drug conjugate (ADC) that it said has shown promise against a range of solid tumors, including non-small cell lung cancer and breast cancer. The treatment is currently in early stage clinical trials.

SystImmune will be eligible for additional payments of up to $7.1 billion contingent upon the achievement of certain development, regulatory and sales performance milestones.

Under the terms of the agreement, SystImmune will be solely responsible for development and commercialization of the drug in mainland China, while Bristol Myers will have those responsibilities for areas outside the country.

Unlike conventional chemotherapy, which can kill healthy cells, ADCs are like guided missiles designed to target only cancer cells, potentially reducing damage to normal cells.

Interest in ADC-makers has surged over the past year. Pfizer is in the process of buying ADC pioneer Seagen in a $43 billion deal announced in March.

In October, Merck said it would pay Japanese drugmaker Daiichi Sankyo $5.5 billion to jointly develop three ADCs, and AbbVie struck a $10.1 billion deal to buy Immunigen last month.

SystImmune is a U.S.-based unit of Sichuan Biokin. U.S. venture capital firm OrbiMed has also invested in SystImmune.

(Reporting by Michael Erman in New Jersey, Additional reporting by Christy Santhosh in Bengaluru; Editing by Shinjini Ganguli and Bill Berkrot)