Hengrui Back at the Table with $15.2B Co-Co Deal with BMS

Nikki Wu | Author

Another | Editor

Hengrui Pharma has reached another high-value deal, this time with Bristol-Myers Squibb (BMS).

Unlike the previous one-sided output, this time both parties put their respective assets on the negotiating table. BMS obtained the exclusive rights globally (excluding mainland China, Hong Kong, and Macao) for Hengrui Pharma's self-developed projects (4 oncology and hematology projects) and co-development projects based on Hengrui’s platform (5 innovative projects). Hengrui Pharma also directly gained the exclusive rights in mainland China, Hong Kong, and Macao for BMS's self-developed projects (4 immunology projects).

The benefits of package deals are obvious, as they spread out the risk of individual project failures for MNCs.For Hengrui, the potential total transaction value of $15.2 billion has generated significant market attention, while the guaranteed receipts of up to $950 million (including upfront and anniversary payments) have bolstered Hengrui's cash flow.On the day of the announcement, the stock price surged in the afternoon and closed up 4.84%.

But that said, the deal involving 13 pipelines is no small test.Hengrui Pharma will "manage" the early clinical development of all projects to accelerate proof-of-concept.Multiple projects advancing simultaneously, spanning across oncology, hematology, and immunology—only Hengrui Pharma can handle such a portfolio.

Hengrui Pharma currently has 163 self-developed pipelines. In the global TOP25 pipeline scale pharmaceutical companies list published by Citeline, it ranks second globally, just behind Pfizer. Internal resources of multinational corporations (MNCs) are often tilted towards later-stage mature pipelines, and the progress speed of early-stage projects tends to be constrained.Although Hengrui Pharma is also a major player in China, it has managed to establish an innovation output mechanism with efficiency no less than that of a biotech company while expanding its pipeline extensively, perfectly compensating for this shortfall of MNCs.

Beyond the sheer size, what deserves more attention is,This collaboration marks Hengrui's first attempt at the Co-Co (Co-development, Co-commercialization) model.Hengrui Pharma has the option to co-develop specific projects and the opportunity to collaborate with BMS on specific commercialization activities globally.

The strength of China's innovative pharmaceutical companies lies in R&D efficiency, while the advantage of multinational corporations (MNCs) is reflected in overseas registration and commercialization capabilities. The complementarity between the two sides has always been clear. However, Chinese pharmaceutical companies hope to break through by deeper participation, while MNCs aim to secure pipelines through more flexible arrangements and avoid certain risks. Continuous adjustments in collaboration methods have led to the emergence of new trends.Co-Co Model

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From Being Chosen to Taking the Initiative to Choose

In the first quarter of 2026, Hengrui Pharma received a licensing income of 787 million yuan from GSK. This income stemmed from a cooperation agreement reached between the two parties in July 2025.

At that time, Hengrui Pharma granted GSK the global exclusive rights to its self-developed innovative respiratory drug HRS-9821 overseas, while also granting the latter global exclusive options for another 11 projects. According to the agreement, Hengrui will lead the research and development until the completion of Phase I clinical trials involving overseas subjects.Now that the licensing revenue has been received, it indicates that the collaborative projects are proceeding as planned, including the smooth progress of the Phase I clinical trial.

If we look at the collaborations between GSK, BMS, and Hengrui Pharma together, the underlying logic is actually similar.MNCs collaborate with Chinese pharmaceutical companies to assess the drugability of a drug with lower financial risk and a shorter time frame, thereby deciding whether to invest in global Phase III clinical trials.

However, the differences in the models are also evident. In GSK's deal, GSK has the right to exercise a global exclusive development and commercialization option, excluding Greater China, at the end of Phase I clinical trials for each project, and retains the right to substitute specific projects.This is a typical buyer-dominated model.Hengrui's positioning is to undertake early-stage R&D tasks,In the later stages, there is more passive waiting for returns.

In the deal with BMS, the option to co-develop specific projects was handed over to Hengrui. This means that if the project data performs well, BMS cannot exclude Hengrui.As long as Hengrui exercises the option, BMS must accept it as a global partner and share global rights.Hengrui Pharma has exchanged the early R&D risks of 13 molecules for the experience of participating in top global R&D and commercialization.

In 2025, Hengrui Pharma mentioned in its annual report the opening of a new clinical research and collaboration center in Boston, USA. It is evident that Hengrui has never forgotten about expanding overseas. The shift from direct licensing to Co-Co essentially represents a transitional compromise explored by Chinese pharmaceutical companies, constrained by their limited independent operational capabilities abroad. It may not be the optimal solution, but it is a pragmatic step for the current situation.

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Fast and Plenty

On April 16, Hengrui Pharma's NewCo, Kailera Therapeutics, was listed on NASDAQ.

Kailera is a NewCo specifically established to introduce Hengrui Pharma's asset, with shareholders including well-known institutions such as Bain Capital and Atlas Ventures. Founded in May 2024, and having been in existence for less than two years, Kailera has already listed on NASDAQ, directly validating the global competitiveness of Hengrui’s GLP-1 product.

The Kailera deal has earned Hengrui Pharma a "vote of confidence for long-term cooperation" from overseas capital and multinational pharmaceutical companies.

Over the past year, Hengrui Pharma has appeared in the global BD market at an almost "bulk deal" pace: MSD acquired global rights (excluding Greater China) to the Lp(a) project HRS-5346; Merck KGaA partnered with Hengrui around SHR7280 for the Chinese market; GSK placed a bet on HRS-9821 and options for up to 11 subsequent projects; newly established Braveheart Bio also brought HRS-1893 under its wing.

It is not difficult to see that Hengrui Pharma has significantly accelerated its pace in overseas licensing, and the process is becoming increasingly smooth.Thereby pushing forward the completion of this hefty deal with BMS.

Of course, it's not just Hengrui Pharma.Many Chinese pharmaceutical companies have completed the transition from quantitative to qualitative change on this path,Some have reached deep strategic partnerships with MNCs., such as Innovent and Eli Lilly — On February 8, the two parties announced their seventh collaboration to jointly develop and commercialize at least three oncology treatment drugs in China.Some have embarked on the path of platform collaboration.On January 30, CSPC announced a strategic R&D collaboration with AstraZeneca to develop innovative long-acting peptide drugs using its proprietary sustained-release drug delivery technology platform and AI-based peptide drug discovery platform.

Broader data also supports this trend. According to the "2026Q1 Pharmaceutical Transaction Trends Report" released by PharmaCube, in the first quarter of 2026, there were 98 BD transactions for innovative drugs in China, with a total value of $61.4 billion, surpassing the overseas transaction total of $26.6 billion during the same period, and even exceeding the total transactions for the entire year of 2024.

According to Bernstein, the continuation rate of China's innovative drug deals, which is the proportion not terminated after signing, significantly increased from 81% in 2020 to 98% in 2024, basically catching up with the level of 99% in mature markets such as Europe, the US, Japan, and South Korea.This means that the participation of Chinese pharmaceutical companies is increasing, and their delivery capabilities are becoming more recognized.

As Chinese pharmaceutical companies gain more leverage in deals, multinational corporations (MNCs) avoid the risks of early-stage R&D but are also forced to give up more benefits and decision-making power.

Another headache for MNCs is the large number of innovative drug assets in China, with projects often clustering around the same target or mechanism. This increases the screening costs for MNCs. The ability to accurately identify projects that truly possess differentiation and global potential from a sea of homogenized assets is increasingly testing the insight and pipeline screening capabilities of MNCs.

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