Huahai Surges After $340M Partnership with Spain’s Almirall

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Huahai Pharmaceutical’s stock rose following the announcement that a partnership with a Spanish dermatology company could generate royalty income of up to $340 million. The company’s shares in Shanghai ended the day up 2.3%, reaching CNY16.18, after an earlier increase of as much as 3.4%.

Shanghai-based Huahai’s subsidiary, focused on biopharmaceuticals, announced a global licensing and research agreement with the Spanish firm to develop a new monoclonal antibody aimed at skin conditions and other potential therapeutic areas. This announcement came late on March 27.

According to the deal, the Spanish company will pay Huahai as much as $340 million in licensing fees associated with drug development, approvals, and sales, which include an initial payment and milestone payments based on clinical trials, approval of new drugs, and commercialization stages.

Huahai will retain rights to the drug within China, while the Spanish firm will hold rights outside of China. Once the drug is launched commercially, both companies will earn royalties based on their respective sales, according to the terms of the agreement.

Chinese pharmaceutical companies are increasingly engaging in cross-border licensing deals as their research and development capabilities improve. In the first quarter, outbound licensing agreements for innovative Chinese medicines reached over $60 billion, nearly half of last year’s total, according to a recent industry forum.

The Spanish company, headquartered in Barcelona, is a well-established global manufacturer of dermatological products, with distribution in more than 100 countries, Huahai noted.

While Huahai has traditionally been known for producing generic medicines, its biotech division, Huaota, is expanding its pipeline to include biologics and innovative treatments in areas such as cancer, autoimmune disorders, and eye diseases. Huaota is among the few Chinese pharmaceutical firms equipped with comprehensive research capabilities, spanning early-stage development through pilot-scale manufacturing.