Citi issued a research report stating that Sino Biopharmaceutical (01177), through its subsidiary Chia Tai Tianqing, has entered into a strategic partnership with German pharmaceutical company STADA for biosimilars. Under the agreement, STADA has been granted an exclusive license to commercialize a pembrolizumab biosimilar (TQB3570, an anti-PD-1 monoclonal antibody) in the European Union, Switzerland, the United Kingdom, and the Commonwealth of Independent States, with the option to expand into the United States and Gulf Cooperation Council (GCC) markets. The bank considers this partnership a positive surprise and maintains its "Buy" rating on Sino Biopharmaceutical with a target price of HK$10.8.

According to the agreement, Chia Tai Tianqing will receive an upfront payment as well as development, regulatory, and sales milestone payments of up to EUR 53 million, along with double-digit profit sharing. Chia Tai Tianqing will remain responsible for development, manufacturing, and commercial supply. The partnership also includes options for up to three additional biosimilar molecules in the oncology and immunology fields.

The bank noted that this partnership validates the commercial quality of Sino Biopharmaceutical's biosimilar production platform. In the future, the company will be able to share in the profits of licensed drugs through manufacturing and supply, and benefit from the global biosimilar market expansion driven by 118 U.S. biologic drug patents expiring between 2025 and 2034, representing combined sales of over USD 230 billion. Sino Biopharmaceutical disclosed that its outbound licensing deals during the year totaled USD 355 million in upfront and near-term milestone payments, with potential total transaction value reaching USD 3.4 billion.