Henlius Shares Advance Amid Reports of Cancer Drug Licensing Discussions with Major Pharma

Market Responds to Henlius Licensing Talks for Experimental Cancer Drug

Shanghai Henlius Biotech (2696.HK), a unit of Fosun Pharma, saw its shares advance in Hong Kong trading following reports of ongoing discussions with pharmaceutical giants Johnson & Johnson (JNJ) and Roche Holding (ROG.SW). The talks center on licensing rights for Henlius's experimental cancer drug, HLX43, an innovative programmed death-ligand 1 (PD-L1) targeting antibody-drug conjugate (ADC). This development signals continued interest from Western pharmaceutical firms in novel therapies developed by Chinese biotechs.

Details of the Potential Transaction

The reported discussions involve a substantial licensing agreement for HLX43, with a potential value of "hundreds of millions upfront" and further "milestone payments" contingent on the drug's performance. HLX43 is currently in mid-stage clinical trials across multiple regions, including China, the U.S., Australia, and Japan, targeting various solid tumors such as non-small cell lung cancer (NSCLC). The drug has shown promising results in phase 1 trials, demonstrating a manageable safety profile and encouraging efficacy, particularly in NSCLC patients, regardless of PD-L1 expression or EGFR mutation status. The prospect of such a deal immediately spurred a positive reaction in Henlius's stock, which experienced an intraday rise of up to 4.2%.

Strategic Drivers Behind Cross-Border Partnerships

This potential licensing deal is emblematic of a broader strategic shift within the global pharmaceutical industry. Western drugmakers are increasingly looking to Chinese biotechs to replenish their pipelines amidst looming patent cliffs and escalating research and development costs. Chinese companies, once known primarily for generics, have evolved into innovation hubs, offering first-in-class and best-in-class candidates at more cost-effective rates. Analysts note that upfront payments for Chinese assets can be 60-70% lower, and total deal sizes 40-50% less, compared to Western counterparts.

This trend has seen China's share of global out-licensing deal value soar, accounting for approximately 32% in Q1 2025, up from about 21% in 2023–24. Morgan Stanley projects that drugs originating in China could generate an estimated $34 billion in revenue by 2030 and a remarkable $220 billion by 2040, with up to 35% of U.S. FDA approvals potentially stemming from China-origin assets by 2040.

Broader Market Context and Precedents

The reported talks involving Henlius follow a series of high-value deals in early 2025 that underscore the burgeoning significance of Chinese biopharma. Notable transactions include Pfizer's commitment of up to $6 billion for rights to 3SBio's cancer immunotherapy, AstraZeneca's over $5 billion R&D collaboration with CSPC Pharmaceutical, and GSK's broad alliance with Jiangsu Hengrui potentially worth up to $12 billion across a dozen oncology programs. These "platform-style" deals allow major pharmaceutical companies to access entire portfolios, diversify risk, and secure a continuous flow of assets.

Chen Qiyu, Executive Director and Co-CEO of Fosun International, parent company of Henlius, recently highlighted the momentum in China's innovative pharmaceutical sector:

"This growth marks only the beginning for our innovative drug portfolio. With more approvals anticipated, we expect the momentum to strengthen further. Our pipeline has garnered increasing market recognition, reflected in the performance of Henlius – its share price surged over 250% from the beginning of the year through August 2025."

Fosun Pharma's revenue from innovative drugs rose by 14.3% in the first half of 2025, with its oral DPP-1 inhibitor securing overseas licensing worth up to $645 million in August, further illustrating the sector's rebound.

Regulatory Environment and Future Outlook

While the commercial rationale for these partnerships is strong, the landscape is not without complexities. U.S. regulators are reportedly weighing tougher scrutiny on deals involving Chinese-developed medicines, which could introduce future regulatory challenges. Despite potential geopolitical headwinds, the strategic imperative for Western pharma to acquire innovative assets, coupled with China's advanced R&D capabilities and government support, suggests that cross-border biopharma deal-making will likely continue. The focus on oncology, particularly cutting-edge modalities like antibody-drug conjugates, is expected to drive further collaborations as both sides seek to address unmet medical needs and secure market leadership in critical therapeutic areas. Investors will closely watch further announcements regarding the Henlius deal and the broader regulatory environment surrounding U.S.-China biopharma collaborations.