The pharmaceutical sector is experiencing a surge in business development activity following the Lunar New Year holiday. On February 24, the first trading day after the break, Frontier Biotechnologies opened with a limit-up gain. The previous evening, the company announced it had signed an exclusive licensing agreement with GlaxoSmithKline (GSK), granting the multinational pharmaceutical giant global rights to two of its early-stage small interfering RNA (siRNA) pipeline assets. On the same day, Harbour BioMed also disclosed a licensing and equity cooperation agreement with Solstice Oncology for its asset HBM4003.
These two licensing deals are just part of a larger wave of Business Development activity involving Chinese innovative drugs this year. The surge, which began last year, shows no signs of slowing down, with many experts predicting the trend will continue. Notably, while multinational corporations continue to be active acquirers, collaboration between domestic pharmaceutical companies is also quietly increasing. Industry insiders observe that, unlike partnerships with multinationals or domestic firms focused on global rights, deals between local companies are more focused on resource complementarity and risk-sharing to quickly capture the domestic market.
The momentum for BD deals remains strong. Last year, BD became a key term in the pharmaceutical industry. According to data, the total value of out-licensing deals for Chinese innovative drugs reached $135.66 billion, involving 157 transactions. Furthermore, even before the first quarter of this year has concluded, the total value of such out-licensing has already reached $33.28 billion, with upfront payments already surpassing the highest quarterly level seen last year.
During the recent Spring Festival period, Harbour BioMed and Frontier Biotechnologies successively announced their BD news. Harbour BioMed stated it entered into an exclusive licensing and equity cooperation agreement with Solstice Oncology, granting the latter exclusive rights to develop and commercialize its clinical-stage asset HBM4003 outside Greater China. Under the agreement, Harbour BioMed is eligible for an upfront payment exceeding $105 million. Additionally, the company could receive up to approximately $1.1 billion in potential development, regulatory, and commercial milestone payments, plus tiered royalties on net sales of HBM4003 outside Greater China.
Frontier Biotechnologies announced it reached an exclusive licensing agreement with GSK, granting the global giant exclusive rights to develop, manufacture, and commercialize two siRNA pipeline products. One candidate is at the investigational new drug application stage, while the other is a preclinical candidate. Frontier will receive a $40 million upfront payment and a near-term milestone payment of $13 million. The company is also eligible for up to an additional $950 million in success-based development, regulatory, and commercial milestone payments across the two programs, plus tiered royalties on global net sales.
Driven by this news, Frontier Biotechnologies' stock price surged 9.29% on February 24, closing at 24.7 yuan per share. As an innovative drug company, Frontier is not yet profitable. A company representative stated that the licensing collaboration with GSK will provide upfront and milestone payments, helping to improve cash flow, optimize the financial structure, and provide solid funding support for core pipeline R&D and technology platform upgrades, aiding efficient resource allocation and strategic focus.
In the view of experts, the core driver of this BD boom is the significant improvement in domestic innovative drug R&D capabilities, particularly in areas like bispecific antibodies, antibody-drug conjugates, and siRNA, which hold global partnership value. Furthermore, multinational corporations face patent cliffs and declining internal R&D efficiency, creating an urgent need to license innovative Chinese assets to fill pipeline gaps, while also valuing China's clinical resources and market potential. This convergence of internal and external factors has made BD a mainstream strategy for companies to supplement pipelines, expand markets, and mitigate risk.
Several experts interviewed believe the current boom will continue. An economist predicted that the "BD fever" will persist in the coming years, especially in areas like small molecule drugs, biologics, and gene therapies.
The Frontier Biotechnologies transaction has further heated up the already highly watched siRNA field. A representative from Frontier stated that the deal is a major achievement reflecting the company's core siRNA R&D capabilities and its global development strategy. The company's siRNA pipeline focuses on chronic diseases, covering areas such as IgA nephropathy, dyslipidemia, gout, and oncology, with some candidates having first-in-class or best-in-class potential. The two partnered products are early-stage assets from this pipeline.
In recent years, siRNA drugs, with their core advantages of precise targeting, long-lasting effects, and shorter R&D cycles, are widely seen as the third major drug modality after small molecules and antibodies, with the potential to become mainstream therapeutics. While no domestically developed siRNA drug has yet been approved in China, innovative drugmakers are actively布局 the field, with multiple assets in clinical stages.
Several transactions have already occurred in the siRNA space this year. For example, a well-known siRNA company, Saint Bio, announced in early February a global R&D collaboration and licensing agreement with Genentech to jointly develop an RNAi therapeutic based on Saint Bio's proprietary platform. A Frontier representative commented that the rapid development of cutting-edge technologies like siRNA is driving deeper industry collaboration. The precise mechanism of siRNA drugs shows strong clinical potential across various disease areas, making it a key global R&D focus. Domestic companies' ongoing technological accumulation and pipeline development are creating unique competitive advantages, positioning the siRNA field as a crucial junction for resource complementarity and collaborative development between domestic and international players, leading to more BD opportunities.
The popularity of the siRNA赛道 is primarily driven by technological breakthroughs, particularly its disruptive potential in chronic disease management like weight loss and lipid reduction, combined with heavy investment from global giants and a warm response from capital markets, making it a "main battlefield" for BD deals.
Historically, BD was often synonymous with "going global," but the narrative for Chinese pharmaceutical BD has now evolved beyond simple out-licensing. This year, alongside deals with multinationals, BD collaboration between domestic pharmaceutical companies has noticeably warmed.
Just within the A-share market, several local deals have been finalized this year. For instance, in January, ZSPH announced its subsidiary granted Qilu Pharmaceutical rights to manufacture and commercialize RAY1225 injection in China. Haisco Pharmaceutical Group partnered with Wanbangde Pharmaceutical on an amyotrophic lateral sclerosis indication, initially focusing on the R&D and commercialization of Wanbangde's WP205 product, which has orphan drug designation, with future collaboration planned on small molecule cyclic peptide agonists targeting the melanocortin receptor.
Notably, JiChuan Pharmaceutical announced two separate collaborations with domestic peers. On February 3, its wholly-owned subsidiary signed an exclusive commercialization agreement with Puqi Pharma for the nasal spray PG-011 in China. The following day, JiChuan announced an exclusive commercialization rights agreement with Akeso for its self-developed and approved innovator antibody injection.
Industry experts suggest that local BD deals focus more on resource complementarity and risk-sharing. The core logic is to unite companies with R&D strengths and those with commercialization strengths to jointly tackle challenges in the domestic market.
The warming trend in BD collaboration between domestic companies reflects an industry-wide trend towards resource integration. Compared to partnerships with multinational corporations, collaborations between local firms place greater emphasis on resource sharing and technological complementarity rather than mere capital investment. The underlying rationale is to achieve technological breakthroughs and market expansion through cooperation, reduce redundant R&D investment, and accelerate the product launch process. This approach not only enhances the competitiveness of individual companies but also promotes the healthy development of the entire industry.