Biotech stocks jumped on Monday. Canbridge soared 40%; Ascletis jumped 17%; TYK Medicines gained 7%; HBM Holdings, Abbisko up more than 6%.

China’s biotechnology stocks have shaken off a four-year slump to be among the hottest performers in Asia this year and funds are tipping further gains.

The Hang Seng Biotech Index has surged more than 60% since the start of January amid investor enthusiasm over a pair of billion-dollar deals involving foreign firms licensing Chinese drugs. Share gains at two highly anticipated listings of local producers have further burnished the sector’s appeal.

“China biotech is no longer just an emerging story — unlike 10 years ago — it is now a disruptive force reshaping global drug innovation,” said Yiqi Liu, senior investment analyst at Exome Asset Management LLC in New York. “The science is real, the economics are compelling, and the pipeline is starting to deliver.”

The surge in China-listed biotech firms is further evidence that the mainland is becoming a center for global innovation. The rally in the sector this year outpaces the 17% gain in China’s tech stocks that was driven by the release of DeepSeek’s breakthrough artificial-intelligence app in January.

A major reason for the share gains were two mega-sized licensing deals. Pfizer Inc. said on May 19 it had agreed to pay a record $1.25 billion to license an experimental cancer drug from China’s 3SBio Inc., and also invest $100 million in the firm’s shares. Two weeks later, Bristol-Myers Squibb Co. said it would pay Germany’s BioNTech SE as much as $11.5 billion to license a cancer drug that BioNTech had itself licensed from China’s Biotheus Inc. in 2023.