Behind the $1.86 Billion Deal: Why Junshi Biosciences Chose to License JS005 Before Approval

To understand this deal, one must first see clearly Junshi Biosciences’ financial hand.

The 2025 annual report shows that Junshi Biosciences achieved a total annual operating revenue of RMB 2.498 billion, a year-on-year increase of 28.23%. Domestic sales of its core product, toripalimab (Tuoyi), reached RMB 2.068 billion, representing a year-on-year growth of 37.72%. Drug sales revenue amounted to RMB 2.301 billion, a significant year-on-year increase of 40.32%. These figures are impressive, and the growth rate remains considerable among domestically produced PD-1 inhibitors.

However, behind the impressive figures lies another set of data: a net loss attributable to shareholders of RMB 875 million. Although this represents a 31.68% reduction in losses compared to the RMB 1.281 billion loss in 2024, the company is still far from achieving profitability. Research and development expenses amounted to RMB 1.342 billion, a year-on-year increase of 5.24%, with R&D investment accounting for a significant 53.72% of total revenue. Selling expenses totaled RMB 1.053 billion, representing 42.00% of revenue. Total period expenses reached RMB 2.955 billion, resulting in a period expense ratio of 118.27%—meaning that for every RMB 100 earned, the company spends RMB 118.

Most Noteworthy Is Cash Flow: Net Cash Flow from Operating Activities Was -520 Million Yuan. Although This Represents a Significant Improvement Compared to the -1.434 Billion Yuan in 2024, the “Self-Sustaining” Capacity Has Yet to Turn Positive.

This is the financial truth of Junshi Biosciences:Commercialization is accelerating, but losses persist; revenue is growing, but cash continues to flow out.The biopharmaceutical industry’s characteristics of “long R&D cycles, high investment, and high risk” determine that the company remains in a critical phase of R&D investment.

Under such financial constraints, every pipeline in development is not “free hope,” but a veritable “gold-swallowing beast” demanding real money.

The clinical data for cosibelimab are robust. In the Phase III registrational trial for moderate-to-severe plaque psoriasis, the PASI 90 response rate in the 150 mg dose group reached 91% at Week 16, and the PASI 100 response rate reached 65% at Week 52. The New Drug Application (NDA) was accepted by the National Medical Products Administration (NMPA) in December 2025. Within the global IL-17A therapeutic landscape, these data place it in the first tier.

But good data does not equate to a good business.IL-17AThe competitive landscape of the sector has reached a fever pitch. Currently, there are already in China6ItemIL-17ASingle-Target Drugs Approved for Market Launch—Novartis, Eli Lilly2Imported brands: Akeso Biopharma, Jiangsu Hengrui Medicine, ZhiXiang JinTai, 3SBio4domestically produced ones—plus those already submitted by Junshi Biosciences, Quanxin Biopharma, and othersNDAFor latecomers under review, the crowdedness of the track is self-evident.

At6When competitors have already secured their market positions, latecomers compete not on “whether they have it,” but on “how fast they are” and “whether their products sell.”

Yet the prerequisite for “strong sales” is having an in-house commercialization team for autoimmune diseases capable of fighting tough battles. Building a sales force covering tertiary hospitals across China, as well as dermatology and rheumatology and immunology departments, from recruitment and training to channel development, would take three to five years and hundreds of millions of yuan in investment before it could take shape. For a company with an annual loss of RMB 875 million and still-negative cash flow, the calculation is clear—Not cost-effective.

By licensing JS005 to Jiangsu Wanbang Biopharmaceuticals, Junshi Biosciences receives: an upfront payment of RMB 215 million, which is non-creditable and non-refundable; development and sales milestone payments totaling up to RMB 1.125 billion; and tiered sales royalties amounting to a double-digit percentage of net sales in the Greater China region.

The price paid was: relinquishing Junshi Biosciences’ proprietary commercialization rights for JS005 in the Greater China region.

This is not “selling green shoots”; rather, it involves exchanging the harvest rights of a single crop for the seeds and fertilizers needed to continue cultivating the entire field.

The financial value of this transaction extends far beyond the book figures.

First,2.15The down payment of hundreds of millions directly improved cash flow.In 2025, net cash outflow from operating activities amounted to RMB 520 million, with immediate cash inflows of RMB 215 million covering 41% of the year’s cash shortfall. For a biotech company still in its cash-burning phase, every cent of cash is vital lifeline.

Second, it saves the substantial costs associated with building and maintaining an in-house sales team for autoimmune diseases.Junshi Biosciences’ sales expenses reached RMB 1.053 billion in 2025. If it were to build its own commercialization team for IL-17A, the upfront investments alone—including salaries for the sales force, academic promotion, and market access—would conservatively add hundreds of millions of yuan in annual expenses. Transferring these costs to Jiangsu Wanbang Biopharmaceuticals would effectively save the company a substantial, ongoing financial burden.

Third, R&D expenses are focused.In 2025, R&D investment amounted to RMB 1.342 billion, accounting for 53.72% of revenue. By transferring the subsequent development and registration responsibilities for JS005 to Jiangsu Wanbang Biopharmaceuticals, Junshi Biosciences can concentrate its limited R&D resources on areas with greater strategic value.

So the question arises—where will the saved money be spent? The answer lies in Junshi Biosciences' future pipeline.

The company is fully advancing its “IO + ADC 2.0” strategy. Core products include: JS207 (a PD-1/VEGF bispecific antibody), for which IO + ADC combination regimens are being investigated in lung cancer, colorectal cancer, breast cancer, and renal cell carcinoma, with all clinical studies having entered Phase II; the FDA has approved the IND for a Phase 2/3 clinical trial comparing JS207 with nivolumab in the neoadjuvant treatment of non-small cell lung cancer overseas. JS212 (an EGFR/HER3 bispecific antibody–drug conjugate) received IND approval in China in March 2025 and FDA approval for its US IND in December 2025, and is currently undergoing Phase 1/2 clinical trials in China. Early-stage pipeline candidates such as JS213 (a PD-1/IL-2 fusion protein) are also being actively advanced.

In its inaugural coverage report, Kaiyuan Securities pointed out that Junshi Biosciences has “comprehensively laid out second-generation immuno-oncology (IO) agents and bispecific antibody-drug conjugates (ADCs),” expressing long-term optimism about its potential to “become a core player in the field of tumor immunotherapy by leveraging its forward-looking deployment of second-generation IO, synergistic advantages of combination therapies, and global commercialization of key flagship products.” A research report from Guohai Securities also suggested that “Junshi’s solutions may hold significant promise in the IO+ADC 2.0 era.”

Comparison:IL-17AThe track already has6products on the market, belonging to the "red ocean"; andPD-1/VEGFDual antibodies,EGFR/HER3Dual AntibodyADCThe next generationIO+ADCTherapies are still in the early clinical stage globally, representing a “blue ocean” market.

Withdrawing limited ammunition from the Red Sea to strike at the Blue Ocean—this is Junshi Biosciences’ true strategy. Toripalimab is today’s “cash cow,” but a single cow cannot sustain an entire pasture. JS207 and JS212 are Junshi Biosciences’ bets on tomorrow.

Back to the initial question: What is Junshi Biosciences’ strategy behind “selling” IL-17A for 215 million? The answer is not “selling unripe crops,” but rather"Changing Tracks"By exchanging the commercialization rights to a "Red Ocean" pipeline asset for improved cash flow, cost savings, and a more focused R&D strategy, the company can then leverage these resources to bet on the "Blue Ocean" future of IO + ADC 2.0. For investors, the true highlight of this transaction lies not in the $215 million upfront payment itself, but in:Whether Junshi Biosciences canPD-1Afterward, useJS207andJS212Tell the next growth story.If possible, today’s “sell” is the foreshadowing of tomorrow’s “buy.”

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