Hengrui Pharma Surges After $12B GSK Licensing Agreement

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Shares of Hengrui Pharmaceuticals experienced a notable surge following the Chinese company’s announcement of a licensing agreement with global pharmaceutical giant GSK. This deal grants GSK worldwide rights to a portfolio of early-stage drug candidates, potentially generating up to USD 12 billion in revenue. Among these candidates is a promising treatment for chronic obstructive pulmonary disease (COPD).

Based in Jiangsu Province, Hengrui’s stock closed with a 10% increase at CNY62.04 (USD 8.70) on the Shanghai Stock Exchange. Meanwhile, its shares listed in Hong Kong soared by 24.5%, ending the day at HKD 84.75 (USD 10.80). The company had listed on the Hong Kong market just this past May.

Under the agreement, Hengrui will transfer exclusive rights outside of China for the HRS-9821 project, along with 11 other preclinical drug candidates spanning areas such as oncology, respiratory illnesses, autoimmune disorders, and inflammation. The Chinese company announced this today.

HRS-9821 is an investigational PDE3/4 inhibitor currently progressing through clinical trials for COPD—a prevalent lung disease that impairs airflow and makes breathing difficult. The medication aims to serve as an additive maintenance treatment for a wide range of COPD patients.

The partnership involves an initial payment of USD 500 million, a significant sum compared to Hengrui’s previous licensing deals, as part of its strategy to diversify revenue sources. Hengrui stated that this collaboration will support the global development of HRS-9821 and other innovative therapies in its pipeline, especially in oncology.

For the remaining 11 drug candidates, Hengrui will oversee research and development through Phase I clinical trials, including those involving international participants. If all projects successfully reach development, registration, and commercialization milestones, the total deal value could climb to approximately USD 12 billion. The company will also earn tiered royalties on future sales outside of China.