Two deals in two days: Jumpcan’s ￥180M licensing spree

In February, Jumpcan Pharmaceutical (600566.SH) announced two consecutive commercial licensing deals in close succession. First, it entered into an agreement with PrimeGene Therapeutics, which is currently pursuing a listing on the Hong Kong Stock Exchange, securing exclusive commercialization rights for the innovative allergic rhinitis drug Pumecitinib nasal spray at a maximum total consideration of up to RMB 100 million. Shortly after, its wholly-owned subsidiary obtained exclusive commercialization rights for Akeso's Ebronucimab injection in China's mainland with an authorization fee of RMB 80 million.

Within just two days, the total intended expenditure reached RMB 180 million. Such rapid and significant investments naturally raise the question: Why would Jumpcan Pharmaceutical, a leading traditional Chinese medicine company with cash reserves exceeding 10 billion, deploy such substantial capital in such a short timeframe?

Unlike indiscriminate expansion through mere acquisitions, Jumpcan Pharmaceutical's recent moves focus on commercial licensing agreements. This strategy allows Jumpcan Pharmaceutical to avoid the high risks and long cycles associated with capital-intensive research and development. By leveraging its ample cash resources, Jumpcan Pharmaceutical is proactively expanding its portfolio. These actions reflect a phased adjustment in its approach to product structure optimization and growth strategy selection.

At first glance, Jumpcan Pharmaceutical's recently disclosed collaborations both fall under the category of "capital-for-commercialization-rights" licensing deals. However, a closer look at product maturity, partner backgrounds, and payment structures reveals distinct strategic focuses between the two transactions.

According to the announcement, Jumpcan Pharmaceutical's wholly-owned subsidiary, Jumpcan Co., Ltd., along with Jiangsu Jiyuan Medicine, has entered into an exclusive commercialization agreement with Zhongshan Akeso and AD Pharmaceuticals. This agreement grants Jumpcan the exclusive commercialization rights for Ebronucimab Injection in China's mainland (excluding Hong Kong, Macao, and Taiwan). The transaction involves an authorization fee of RMB 80 million (including taxes) and milestone payments of up to RMB 10 million (including taxes).

Ebronucimab Injection, independently developed by Akeso, is a novel PCSK9 monoclonal antibody drug. It received market approval in September 2024 and has been included in the National Reimbursement Drug List for National Basic Medical Insurance, Maternity Insurance and Work Injury Insurance (2025). The drug is primarily indicated for the treatment of primary hypercholesterolemia and mixed dyslipidemia, including heterozygous familial hypercholesterolemia and hypercholesterolemia combined with atherosclerotic cardiovascular disease.

This licensing agreement enables Jumpcan Pharmaceutical to initiate commercialization efforts without bearing the risks associated with research and development. It represents a low-risk, rapidly deployable strategy centered on a mature product.

Unlike the "approved and mature" Ebronucimab deal, Jumpcan Pharmaceutical's collaboration with PrimeGene Therapeutics represents more of a "forward-looking strategic bet." According to the announcement, Jumpcan Co., Ltd. has secured the exclusive commercialization rights for Pumecitinib nasal spray in China's mainland, Hong Kong, Macao, and Taiwan. The maximum total consideration is RMB 100 million  (including taxes), structured as an upfront payment of RMB 40 million and milestone payments of up to RMB 60 million. These milestone payments are tied to the product's progress toward regulatory approval and market launch. Should the product ultimately fail to gain approval, the upfront payment is non-refundable.

Pumecitinib is a fully proprietary JAK1/2 inhibitor for the treatment of allergic rhinitis. It has completed Phase I/II clinical studies and is currently in Phase III clinical trials. Its developer, PrimeGene Therapeutics, is a biotechnology company focused on immune-inflammatory diseases and is currently pursuing an initial public offering on the Hong Kong Stock Exchange. PrimeGene Therapeutics has not yet commercialized any products. According to available IPO documentation, PrimeGene reported net losses of RMB 178 million in 2024 and RMB 125 million for the first nine months of 2025. This licensing agreement represents a significant measure for PrimeGene Therapeutics to replenish its cash flow and support ongoing research and development.

For Jumpcan Pharmaceutical, the licensing of Pumecitinib carries higher risk than the Ebronucimab deal but also offers potentially greater returns. According to the 2025 National Health Survey by National Health Commission of the People's Republic of China, the number of rhinitis patients in China exceeds 380 million, with an adult allergic rhinitis prevalence rate of 17.6%. As a differentiated innovative drug, Pumecitinib, if successfully launched, could rapidly capture market share while filling a gap in Jumpcan's product portfolio for the allergic rhinitis therapeutic area.

Jumpcan Pharmaceutical's recent series of commercial licensing transactions can be understood from two strategic perspectives: first, its ample cash reserves provide a financial foundation for external expansion, and second, Jumpcan Pharmaceutical is proactively advancing the adjustment of its product structure to increase its focus on innovative drugs and reduce its reliance on traditional core products.

From a financial standpoint, Jumpcan Pharmaceutical maintains a stable capital position. According to its third-quarter report for 2025, total assets reached RMB 16.534 billion, with accounts receivable of RMB 1.550 billion. During the reporting period, net cash flow from operating activities amounted to RMB 704 million, while cash received from selling goods and providing services totaled RMB 5.113 billion, indicating a relatively stable ability to recover funds.

In terms of performance, Jumpcan Pharmaceutical achieved operating revenue of RMB 3.932 billion during the reporting period, representing a year-on-year decrease of 32.27%. Net profit was RMB 1.022 billion, down 46.27% compared to the same period last year. Jumpcan Pharmaceutical explained that these declines were driven by reduced sales revenue of core products such as Pudilan Anti-inflammatory Oral Liquid and Xiao'er Chiqiao Qingre Keli, due to changes in end-market demand, leading to periodic fluctuations in overall performance.

From a product structure perspective, Jumpcan Pharmaceutical has long focused on the research, development, production, and sales of traditional Chinese medicine. Core products such as Pudilan Anti-inflammatory Oral Liquid and Xiao'er Chiqiao Qingre Keli accounted for approximately 60.12% of its revenue in 2024, holding significant market shares in specialized areas such as pediatrics, respiratory, and digestive diseases. However, against the backdrop of intensifying industry competition and the normalization of healthcare cost containment measures, the growth potential of these mature products faces certain constraints. Meanwhile, Jumpcan Pharmaceutical's innovative drug pipeline remains in the cultivation stage, and internal growth drivers require further enhancement.

In this context, relying solely on in-house research and development makes it challenging to rapidly strengthen the pipeline in the short term. According to the 2024 annual report, Jumpcan Pharmaceutical invested RMB 453 million in R&D, accounting for 5.65% of its operating revenue. Jumpcan Pharmaceutical employed 734 R&D personnel, representing 14.6% of its total workforce. While overall R&D investment remains stable, compared to leading biotech companies centered on innovative drugs, there remains a timing gap in R&D pace and pipeline output.

Furthermore, Jumpcan Pharmaceutical possesses a well-established commercialization system. Jumpcan Pharmaceutical primarily employs specialized academic promotion, supplemented by channel distribution, covering hospital (RX), retail (OTC), and direct-to-patient (DTP) channels. This has formed a relatively comprehensive market promotion network. This commercialization capability also serves as a critical foundation for the company to introduce external innovative assets through licensing agreements and accelerate product market entry.

Jumpcan Pharmaceutical is steadily advancing its external expansion strategy. Throughout 2024, the company secured four product introduction and cooperation agreements, covering a Class 1 innovative traditional Chinese medicine (TCM) in the respiratory field, a Class 1 innovative chemical drug in the pain management field, a Class 1 innovative TCM for pediatric otorhinolaryngology, and a collaborative effort with relevant partners to develop a Class 1 innovative chemical drug in the digestive field.

Entering 2025, Jumpcan has accelerated the pace of its commercial licensing activities. By introducing external innovative drugs, the company is supplementing its pipeline on the foundation of its existing product portfolio. Leveraging its established commercial channels for market promotion, Jumpcan aims to cultivate a second growth curve.

This strategy capitalizes on Jumpcan's strengths in cash reserves and distribution channels while reflecting a more measured approach to transformation typically adopted by traditional pharmaceutical companies venturing into innovative drug development. Through licensing agreements, Jumpcan secures mature or late-stage clinical products by paying predetermined fees and commercializes them using its own channels. This model balances asset-light operations with predictable returns.

These licensing transactions also reflect the broader trend of specialization within the pharmaceutical industry value chain. For R&D-focused companies, out-licensing can generate cash flow, allowing them to concentrate resources on core research activities. For commercial-stage companies, it enables rapid product scaling by utilizing their established channel advantages. Taking the examples of Ebronucimab and Pumecitinib: although Akeso's product has received approval, a company lacks extensive commercial channel resources; Pumecitinib, currently in Phase III trials, is developed by PrimeGene, a company not yet profitable, for whom the upfront payment provides crucial cash flow to support ongoing R&D and its pursuit of a Hong Kong IPO. This "R&D + Commercialization" collaboration model mitigates investment risks while enabling complementary strengths between partnering firms.

Despite enabling rapid pipeline supplementation, commercial licensing carries inherent concerns. The sales performance of licensed products, patent life uncertainties, and competitive market dynamics may impact the sustainability of earnings. Additionally, for late-stage clinical products like Pumecitinib which have not yet received market approval, the challenges of post-launch commercialization should not be overlooked.

Overall, Jumpcan Pharmaceutical's investment of RMB 180 million in these two licensing deals represents a strategic, phased response to optimize its product portfolio swiftly and adapt to market changes, facilitated by its strong cash position. This approach offers significant reference value for the industry: for biopharmaceutical innovators and entrepreneurs, focusing on core competencies and achieving pipeline expansion and cash flow balance through licensing partnerships represents an efficient development path. For investment institutions, corporate combinations that exhibit both R&D potential and commercial execution capabilities hold considerable observation value.

However, it is essential to recognize that commercial licensing ultimately remains a transitional strategy. For traditional pharmaceutical companies to achieve long-term sustainable development, they must complement external expansion with increased internal R&D investment. Cultivating a proprietary pipeline of core innovative drugs that are independently controllable is crucial to realizing a dual-drive model of "external expansion + endogenous growth."