BeiGene Ltd. (NASDAQ: BGNE) saw its shares pop early on Thursday after the firm announced that it had entered into a strategic collaboration with Celgene Corp. (NASDAQ: CELG). The goal is to commercialize Beigene’s investigational anti-programmed cell death protein 1 (PD-1) inhibitor, BGB-A317, for patients with solid tumor cancers in the United States, Europe, Japan and rest of world outside Asia.

Ultimately, BeiGene will retain exclusive rights for the development and commercialization of BGB-A317 for hematological malignancies globally and for solid tumors in Asia (with the exception of Japan). At the same time, BeiGene will acquire Celgene’s commercial operations in China and gain an exclusive license to commercialize Celgene’s approved therapies in China, including Abraxane, Revlimid and Vidaza.

This partnership should be fairly transformative for BeiGene, seeing as it can start making some actual money. Currently analysts are only calling for BeiGene to have $3.5 million in revenue in 2017, but after it picks up some commercial operations in China there should be much more on the way.

Celgene will maintain a strategic and R&D presence in China dedicated to long-term commercial activities, regulatory affairs and clinical development of new therapies in the country. Celgene also will continue supporting BeiGene with management of the Revlimid Risk Minimization Program.

Upon closing, BeiGene will receive upfront licensing fees totaling $263 million, and Celgene will acquire an equity stake in BeiGene by purchasing 32.7 million, or 5.9% of its float. BeiGene is also eligible to receive up to $980 million in development, regulatory and sales milestone payments and royalties on future sales of BGB-A317.

The transaction is expected to close in the third quarter of 2017, subject to regulatory approval.

Mark J. Alles, CEO of Celgene, commented:

The acquisition of BGB-A317 significantly accelerates and expands our opportunity to develop and deliver novel T-cell checkpoint inhibitor-based therapies in solid tumor cancers to patients worldwide and adds to our ongoing PD-L1 Fusion program in hematological malignancies. China is an important market for Celgene, and our collaboration with BeiGene positions us exceptionally well to optimize research, manufacturing, and the long-term commercial potential of our portfolio in China.

Shares of BeiGene closed Wednesday down nearly 4% at $52.27, with a consensus analyst price target of $47.00 and a 52-week trading range of $24.53 to $54.59. Following this announcement, the stock was up over 12% at $58.85 in early trading indications Thursday.

Celgene shares closed Wednesday up 2.3% at $133.20. The stock has a 52-week range of $96.93 to $135.18 and a consensus price target of $142.04.

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