Hengrui Pharma Announces Up to $12 Billion Licensing Deal with GSK Covering COPD Drug HRS-9821 and 11 Additional Pipeline Assets

Two months after its listing on the Hong Kong stock exchange,Hengrui PharmaOfficially announced a "package deal" BD (Business Development), with an upfront payment of $500 million.

On July 28, Hengrui Pharma (600276.SH; 1276.HK) announced that it had reached an agreement with GSK. Under the agreement, Hengrui will grant GSK the global exclusive rights to the HRS-9821 project and the exclusive option for global licenses of up to 11 projects in exchange for payment. According to the agreement, GSK will pay Hengrui an upfront payment of 500 million US dollars, and Hengrui is eligible to receive potential milestone payments based on successful development, registration, and sales, with a total amount of approximately 12 billion US dollars. This marks the first business development (BD) announcement by Hengrui Pharma after its listing on the Hong Kong stock exchange.

On July 28, Hengrui Pharma's A-shares and H-shares opened significantly higher. The A-shares surged over 8% at one point and were up more than 6% at the time of writing; the H-shares rose over 10% at one point and were up more than 8% at the time of writing.

The core subject of this agreement is HRS-9821, a potential best-in-class PDE3/4 inhibitor currently in clinical development for the treatment of chronic obstructive pulmonary disease (COPD). Hengrui Pharma stated that the drug has demonstrated potent PDE3 and PDE4 inhibitory effects in early clinical and preclinical studies, thereby enhancing bronchodilation and anti-inflammatory effects, and providing an opportunity for the development of a convenient dry powder inhaler (DPI) formulation.

COPD treatment drugs are also one of the current hot tracks, with significant BD transactions already taking place. For instance, on July 9, Merck announced it would acquire Verona Pharma, a biotech company in the respiratory field, for $10 billion to obtain the COPD drug Ohtuvayre.Founder SecuritiesPrevious research reports pointed out that the logic of domestic pipeline BD continues to strengthen, and看好COPD赛道BD机会. In addition to Hengrui Pharma, the PDE3/4 product of China's Zhengda Tianqing has entered phase three clinical trials.HaiscoEntered Phase II Clinical Trials.

As for the other 11 projects in this transaction, Hengrui Pharma did not disclose detailed pipeline content, only introducing that they involve innovative drugs in multiple therapeutic areas such as oncology, respiratory, autoimmune, and inflammation. These projects are currently in the preclinical research stage. Hengrui will lead the development of these projects, at the latest until the completion of Phase I clinical trials including data from overseas subjects.

BD Business Has Become an Important Contribution to Hengrui Pharma's Performance. Previously, when Hengrui listed on the Hong Kong stock exchange, it disclosed that the company had cumulatively reached 14 out-licensing cooperation agreements for innovative drugs, including 9 in the past three years. These involve core products such as Lp(a) inhibitors, DLL3 ADC, GLP-1 asset portfolios, and PARP1 inhibitors, licensed to multiple overseas pharmaceutical companies, including Merck, IDEAYA Biosciences, Kailera Therapeutics, and Merck Germany, with a total transaction value of approximately 14 billion US dollars.

Regarding the value of BD, Hengrui Pharma stated that the company adheres to a dual focus on independent research and open collaboration. On the basis of endogenous development, it strengthens international cooperation to achieve rapid transformation of R&D results. By leveraging leading international partners to cover overseas markets, the company accelerates its integration into the global drug innovation network, maximizing product value and enabling its innovative products to serve patients worldwide.

A major feature of this BD is that the transaction subject is not just a single R&D product, but rather multiple pipelines "packaged" together. This is not the first time Hengrui Pharma has licensed out a package deal. In May 2024, Hengrui Pharma announced that it had granted Hercules USA the exclusive rights to develop, manufacture, and commercialize three innovative GLP-1 drugs worldwide, excluding Greater China. Hengrui Pharma received an upfront payment and near-term milestone payments totaling $110 million, with a potential maximum total amount exceeding $6 billion.

Notably, BD's collaborator this time is GSK. In January 2024, GSK announced an acquisition agreement with Aiolos, gaining access to the latter’s sole pipeline product, code-named AIO-001, a monoclonal antibody. For this, GSK will pay $1 billion upfront and $400 million upon successful regulatory milestones. This monoclonal antibody product was previously licensed by Hengrui Pharma to Aiolos. At that time, industry insiders commented that Hengrui Pharma was being undercut on profits, while the latest BD deal involves a direct transaction between Hengrui Pharma and GSK.

GSK Chief Scientific Officer Tony Wood stated: "These collaborations will further expand our already robust R&D pipeline. This transaction reflects our strategic investment in projects with validated targets, which can significantly increase the success rate of R&D. At the same time, we also have the option to advance assets that hold the greatest potential impact for patients."