Hengrui Pharma grants global exclusive license for HER2 ADC Trastuzumab Rezetecan (SHR-A1811) to Glenmark in deal valued over $1.1B

On September 24, 2025, Hengrui Pharmaceuticals announced that it has entered into an exclusive licensing agreement with Glenmark Specialty S.A. ("GSSA"), a wholly-owned subsidiary of Glenmark Pharmaceuticals, a global, innovation-driven pharmaceutical company, for its self-developed HER2 ADC innovative drug, SHR-A1811.

Under the terms of the agreement, Hengrui Pharma has granted Glenmark an exclusive license for the development and commercialization of SHR-A1811 (Trastuzumab Rezetecan) in all regions globally, excluding Mainland China, Hong Kong SAR, Macau SAR, Taiwan region, the United States, Canada, Europe, Japan, Russia, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan.

Hengrui will receive an upfront payment of $18 million, potential milestone payments of up to $1.093 billion, and tiered royalties on net sales.

SHR-A1811: Chinese Launch Paves Way for Global Expansion

Notably, SHR-A1811 differs from the early-stage assets typically involved in such out-licensing deals from China.

Trastuzumab Rezetecan (SHR-A1811) is an antibody-drug conjugate (ADC) targeting HER2 independently developed by Hengrui Pharmaceuticals. It specifically binds to HER2 on the surface of tumor cells. The resulting conjugate is then internalized into the cell and transported to lysosomes, where proteolytic cleavage releases the cytotoxic payload, exerting its pharmacological effect within the tumor cell and inducing apoptosis. The released payload exhibits high membrane permeability, enabling a potent bystander killing effect that further enhances the antitumor efficacy.

This drug was already approved for marketing in China in May 2025, indicated for the treatment of adult patients with unresectable locally advanced or metastatic non-small cell lung cancer (NSCLC) harboring activating HER2 (ERBB2) mutations who have received at least one prior systemic therapy. It is also the first domestically developed antibody-drug conjugate (ADC) in China approved for NSCLC patients with HER2 mutations.

In addition, multiple clinical studies on Trastuzumab Rezetecan are being actively advanced.

In August 2025, the combination therapy of Trastuzumab Rezetecan with Adebrelimab and chemotherapy for the indication of gastric cancer or gastroesophageal junction adenocarcinoma received orphan drug designation from the U.S. Food and Drug Administration (FDA).

In September 2025, the new drug application (NDA) for Trastuzumab Rezetecan for a breast cancer-related new indication was accepted by China's National Medical Products Administration (NMPA) and included in the priority review procedure.

As of now, a total of 9 indications of Trastuzumab Rezetecan have been included in the breakthrough therapy designation list by the Center for Drug Evaluation (CDE) of China's NMPA, covering disease areas such as non-small cell lung cancer (NSCLC), breast cancer, gastric cancer or gastroesophageal junction adenocarcinoma, colorectal cancer, biliary tract cancer, and gynecological malignancies.

In other words, Hengrui Pharmaceuticals initiated the overseas licensing immediately when it launched the commercialization of the drug in China, achieving a seamless connection between the new drug's domestic launch and its overseas expansion.

Key Takeaways from Hengrui's Announcement

According to the announcement, Hengrui Pharmaceuticals has retained the rights in China, the United States, Canada, Europe, the United Kingdom, Japan, Russia, as well as the Caucasus region and some Central Asian countries. In contrast, Glenmark Specialty has obtained the rights in countries across Africa, Oceania, Southeast Asia, the Middle East, and Latin America. Among these regions, the clinical development in Australia will remain under the leadership of Hengrui Pharmaceuticals.

This licensing model very intuitively reflects Hengrui Pharmaceuticals' own considerations regarding regional priorities.

The core self-operated regions for Hengrui are undoubtedly China, Europe, the United States, and Japan. These regions have strong payment capabilities and are expected to achieve higher peak sales; therefore, Hengrui Pharmaceuticals will retain its in-house teams or engage in in-depth participation through NewCo.

The regions pending evaluation include the Russian-speaking region and Central Asia, among others. Due to high political and payment uncertainties, licensing for these regions is temporarily on hold.

The new growth regions are emerging markets such as India, Latin America, the Middle East, and Africa. Although their payment capabilities are not as strong as those of core regions, these markets are expected to achieve rapid sales realization with the support of Glenmark Specialty's distribution channels, thanks to their fast sales volume growth potential.

Glenmark Pharmaceuticals is a research-driven global pharmaceutical company headquartered in Mumbai, India. It is listed on the National Stock Exchange of India (stock code: GLENMARK) and the Bombay Stock Exchange (stock code: 532296). Its business covers the fields of innovative drugs, generic drugs, and over-the-counter (OTC) products, with a focus on therapeutic areas including respiratory diseases, dermatology, and oncology. Glenmark Pharmaceuticals owns 11 world-class manufacturing facilities across four continents, with its business reaching over 80 countries. According to the Scrip 100 ranking, Glenmark Pharmaceuticals was among the top 100 biopharmaceutical companies in terms of pharmaceutical sales in 2023.

For Hengrui Pharmaceuticals, entrusting the "non-core markets" to Glenmark Specialty means gaining access to high-growth regions such as India, Latin America, the Middle East, and Africa in one go, without the need to build an overseas sales team from scratch. For Glenmark Specialty, acquiring this blockbuster HER2 ADC drug allows it to quickly fill the gap in its oncology innovative pipeline.

Hengrui Accelerates to Go Global

In early September, Hengrui Pharmaceuticals chose to advance the overseas expansion of HRS-1893 through the NewCo model. Notably, Hengrui Pharmaceuticals' outstanding financial performance and sustained R&D investment have served as the core driver for its internationalization. According to its financial report for the first half of 2025, Hengrui Pharmaceuticals achieved operating revenue of RMB 15.761 billion, representing a year-on-year growth of 15.88%; its net profit attributable to shareholders of the listed company reached RMB 4.450 billion, with a year-on-year increase of 29.67%.

Among the revenue components, sales and licensing income from innovative drugs amounted to RMB 9.561 billion, accounting for a high proportion of 60.66% of total operating revenue. During the reporting period, the company received an upfront payment of USD 200 million from Merck Sharp & Dohme and USD 75 million from IDEAYA for overseas licensing deals.

Although Hengrui Pharmaceuticals has made significant progress in licensing transactions, the proportion of overseas sales revenue from its self-developed innovative drugs remains relatively low. Data from its 2024 annual report shows that overseas sales accounted for only 2.56% of the company's total business revenue.

Global BD (Business Development) transactions for its innovative drug pipeline have already become an important source of revenue for Hengrui Pharmaceuticals. In the first half of 2025 alone, the company recognized approximately RMB 2 billion in upfront payments from BD transactions. Since the second half of 2025, Hengrui Pharmaceuticals has completed another 3 pipeline BD transactions. Among these, it received an upfront payment of USD 500 million from a pipeline package deal with GSK, and another USD 65 million in upfront payment from a separate pipeline transaction with Braveheart Bio. 

In other words, even without considering subsequent milestone payments and potential sales royalties, these upfront payments already in hand have made Hengrui Pharmaceuticals' cash flow a non-issue.

Moreover, the expected present value of this deal—exceeding USD 1.1 billion—has surpassed Hengrui Pharmaceuticals' expected projected net profit attributable to shareholders for 2025. Its relatively prudent yet strategic approach to global expansion has further created a cash flow channel that incurs no sales expenses and occupies no production capacity. This is more than sufficient to prompt the market to reevaluate the global pricing power of China-developed ADC drugs.