Every heavy blow in the capital market can be fatal for a mid-tier innovative pharmaceutical company.
On the evening of December 21, Jacobio Pharmaceuticals (hereinafter referred to as "Jacobio") announced that it had entered into a global exclusive licensing agreement with AstraZeneca for its self-developed pan-KRAS inhibitor product. According to the agreement terms, Jacobio will receive an upfront payment of $100 million, with the total transaction value potentially reaching up to $1.915 billion, plus tiered royalty payments on net sales achieved in markets outside China.
This was interpreted by the media as "the largest cooperation deal for a clinical-stage small molecule anticancer drug in China." However, on the first trading day after the "positive news" was released, its stock price plummeted by 13.58%. In the following days, it continued its downward trend, falling another 8.55% and 4.89% on December 29 and 30, respectively. Compared to December 19, the closing price on December 30 had dropped by approximately 27%.
This caused significant "panic" within the industry. Jacobio did not provide an explanation to China Entrepreneur, but the capital market widely believes the trigger was the low upfront payment amount, which constitutes a small proportion of the total deal value.
"Frankly, the complexity of the secondary market far exceeds the company's understanding in scientific research," said Wang Yinxiang, Chairman and Co-CEO of Jacobio, in an interview. Jacobio's stock price was around HK$1.3 at the beginning of the year and rose to nearly HK$12 at its peak this year. In his view, some investors had accumulated substantial short-term profits and, coinciding with the year-end, chose to "cash out."
"We also had some expectation that many biotech companies would experience short-term profit-taking after announcing licensing collaborations," Wang said. Since the beginning of the year, the capital market's reaction to licensing deals has generally been cool, with innovative pharmaceutical companies including Rongchang Biologics, InnoCare Pharma, and Innovent Biologics all experiencing stock price declines after deals were finalized.
However, this incident might have a greater impact on Jacobio. Unlike other companies, when Wang Yinxiang founded Jacobio in 2015, "License-out" was explicitly the core business model from the outset. The entire organizational structure, product pipeline setup, and resource allocation logic were built around licensing transactions.
He was previously the President of Betta Pharmaceuticals, a leading innovative drug company at the time, but for a long period, he struggled to distinguish between the identities of scientist and entrepreneur. It was only after becoming increasingly clear that his interest lay in R&D that he chose to start another venture.
Therefore, when designing Jacobio, he was strongly idealistic: focus only on "First-in-class" products, not even including the already advanced "Best-in-class" approach prevalent in the industry at the time. Consequently, he almost exclusively selected targets considered "undruggable." To validate the "License-out" business model, he insisted that core products must rank among the top three globally to possess transaction value.
KRAS is a key focus area for Jacobio. Wang Yinxiang stated it is one of the targets covering the broadest patient population among all anti-tumor drug targets, with extremely high difficulty to overcome, thus attracting significant attention and holding immense market potential.
It is worth noting that AstraZeneca just terminated a KRAS inhibitor product licensed from YouSen JianHeng in November of this year, citing pipeline prioritization adjustments.
Just two months prior, Jacobio completed an equity transfer transaction, selling a portion of the equity in its cardiovascular pipeline assets to Oceanpine Capital for a total price of approximately RMB 200 million. Wang Yinxiang explicitly mentioned that the clinical cycle for cardio-cerebrovascular diseases is long, and the oncology field is more suitable for the company's current stage of development.
"As a startup company, we pay attention to the secondary market, but we cannot be led by its rhythm. We must focus on diligently advancing our R&D," Wang said. Given his past style and Jacobio's current state, the deal with AstraZeneca will likely further concentrate pipeline resources on KRAS.
Jacobio's interim report shows that as of June 30, 2025, the balance of cash, bank deposits, and capital-guaranteed structured deposits classified as financial assets was RMB 1.07 billion. Combined with the two transactions in the second half of the year, its cash reserves remain relatively ample.
However, in the current complex capital environment, every "heavy blow" can be fatal for a mid-tier innovative pharmaceutical company. When asked by China Entrepreneur whether it is necessary to adjust Jacobio's business model, pipeline setup, or transaction strategy, he did not provide a direct answer.
Wang Yinxiang is an extremely goal-oriented person, making his career trajectory unique within China's innovative pharmaceutical industry.
Born in 1965 into a rural family in Handan, Hebei, he worked long-term at the local Center for Disease Control after graduating from technical secondary school. Starting from this point, he set his life goal as obtaining a Ph.D.
He woke up at 6 a.m. daily to study English and specialized courses, dedicating all his time except for watching a movie on Sundays to studying. He first entered the Graduate School of the Chinese Academy of Preventive Medicine, later earned a Ph.D. in the United States, and conducted postdoctoral research in the Department of Molecular Biophysics and Biochemistry at Yale University.
This typically corresponded to a standard career path in multinational pharmaceutical companies. However, in 2003, he returned to China and co-founded Betta Pharmaceuticals. At that time, innovative drugs were just emerging globally, and Betta naturally enjoyed first-mover advantages, being a domestic "seed player" for a long period. With the approval and launch of its self-developed drug "Kaimeina" in 2011, China's first small molecule anti-cancer drug, Betta Pharmaceuticals established its industry status as the "King of Lung Cancer" and the "first stock of innovative drugs."
Then, shortly after Betta Pharmaceuticals listed on the ChiNext board in 2016, Wang Yinxiang resigned from his positions as Director and President the following year to fully devote himself to Jacobio, which had been established in 2015. The name "Jacob" in the company's English name means "to grasp" in Hebrew, and "bio" is the root for "biomedicine." This somewhat "plain" name perhaps reflected his most genuine idea at the time – to firmly grasp the once-in-a-lifetime opportunity in biomedicine.
He mentioned in a 2021 interview that before 2008, "Me Too" products faced no competition in China, but after 2010, it became very difficult due to severe homogeneous competition. Furthermore, with capital介入, the License-in model also entered the fray, intensifying competition.
The subsequent development of Betta Pharmaceuticals to some extent validated his judgment; the company's current market capitalization is less than RMB 20 billion, placing it outside the first tier of the innovative pharmaceutical industry.
But at that time, leaving a large company to fully投身biomedicine was uncommon. While everyone said China lacked talent and technology, Wang Yinxiang saw the "opposite."
Twenty-five percent of R&D personnel in US pharmaceutical companies are Chinese, and it's hard to find a life sciences lab in American universities without Chinese researchers. Among this group, countless people wanted to return to China to start businesses but dared not.
"We have the equipment, talent, experience, and platform; why can't we support them in returning to China to start businesses?" With support from several venture capital funds, he co-founded Jacobio with a few scientists. In its early days, the "platform + fund" company model resembled the Innovation Works in the internet field – scientists with ideas and entrepreneurial dreams could return to China and have the opportunity for comprehensive collaboration with Jacobio.
Wang Yinxiang immersed himself in this new work state – receiving people from around the world, selecting suitable projects to partner with for the final leg. He mentioned that after every speech overseas in pharmaceutical circles, many people would email or message him on WeChat.
Whether pursuing "First-in-class" or adhering to the "License-out" business model, the state presented by Jacobio was completely opposite to the predominantly "follow-the-leader" style of the innovative drug industry at the time, attracting admiration from many young scientists.
But he wasn't making decisions recklessly. In his view, the "Best" in "Best-in-class" is difficult to define, relying on extensive clinical data validation, and achieving market consensus is challenging.
Furthermore, China's R&D costs were already high, even接近those in Europe and the US. But China's share of the global innovative drug market was still less than 10%. If the vision doesn't include the global market, how can such high R&D costs be supported? He often used this example to illustrate the practical value of "License-out."
"Domestic pharmaceutical companies' sales costs are 40%-60%, plus production and administrative expenses. The best-selling innovative drug in the Chinese market currently achieves annual sales of RMB 2-3 billion, resulting in very low profits. In contrast, annual sales of an innovative drug in the international market commonly range from $3 billion to $10 billion. Through License-out, even with a 10% global share, revenue could be $400 million to $1.5 billion, and that's pure profit."
Wang Yinxiang maintained a state of rapid trial-and-error with small teams. Compared to large companies'立项teams often numbering in the hundreds, Jacobio started with only seven or eight core members. Whenever a good project idea emerged, it could bypass cumbersome application procedures and be quickly tested in cell and animal labs; if results were promising, it would be advanced.
Different from the industry's practice of judging a company's value by the number of clinical approvals, he was already accustomed to the logic of "return on investment" – pricing all resources, knowing how to manifest their value, and then allocating resources rationally.
Although targeting "First-in-class" product pipelines, Jacobio's moves in the capital market were relatively few. Before listing, it had two rounds of equity financing totaling around $100 million, and the IPO raised approximately HK$1.5 billion.
From an external perspective, moving from SHP2 to KRAS, both considered "undruggable" targets, Jacobio always seems to be doing things beyond the常规. But Wang Yinxiang was clear from the start that the easily druggable targets on the market were mostly done; the remaining targets would only get harder.
The first切入点, SHP2, came about because when he founded Jacobio, he had missed the optimal timing to enter the PD-1 field. His thinking then was to find a target downstream of PD-1 to ride the momentum.
Soon after, he came across a paper published in *Cancer Research* discussing the key role the SHP2 protein phosphatase could play downstream of PD-1. Wang Yinxiang was greatly surprised, feeling it was "like a gift from God" – he had spent ten years in the US researching protein phosphorylation, an area long considered undruggable with no successful drugs developed for decades, and now it could finally be linked to tumor immunotherapy.
This gave Jacobio a smooth start. In early 2018, the company's SHP2 inhibitor entered Phase I clinical trials in the US and China successively. "Only Novartis' product was ahead of us, with a progress gap of about half a year. Jacobio and Novartis were the only two companies globally developing the SHP2 target at that time," Wang said.
In 2020, Jacobio signed a patent license agreement with the multinational pharmaceutical company AbbVie, granting AbbVie the rights to the SHP2 inhibitor outside China. The total deal value exceeded $855 million. At that time, the innovative drug industry was at a capital peak, with the entire industry疯狂buying product pipelines from abroad. "Reverse" deals were uncommon, especially with a major international player like AbbVie.
This could have allowed Jacobio to rise abruptly, but unexpectedly, at the end of 2022, AbbVie returned the rights. AbbVie had originally planned to combine the SHP2 inhibitor with its own PD-1, but later terminated its PD-1 development.
Jacobio faced its first heavy blow from the capital market; on the first trading day after the announcement, its stock price fell by 17.31%. Although the deal was successful from an operational perspective, bringing Jacobio around $120 million in revenue.
This反而strengthened Wang Yinxiang's conviction in the "License-out" model. With the capital market situation unfavorable and Jacobio focusing on开源节流, resources became more concentrated. "'Sailing out on a borrowed ship' is a strategy established from the beginning. By 2024, Jacobio will have 10 products ranked globally in the top three undergoing global clinical trials, and more projects will have the potential to达成License-out deals by then," he said.
In his view, licensing out pipeline rights that the company itself cannot fully utilize is crucial for Jacobio at its startup stage. "Most deals are not one-time sales; as long as the rights aren't returned, future milestone payments are possible, and if the drug is commercialized, there will be sales royalties. This is a positive thing." He mentioned that in the deal with AbbVie, Jacobio also retained over 10% of the sales royalties on the global market share.
Although License-out negotiations are highly challenging, Wang Yinxiang deliberately retains rights for the Chinese market. During the product立项stage, when evaluating a candidate, overseas licensing and retaining Chinese rights are parallel conditions.
"First, if we don't build up production and sales systems, we will永远only be an R&D company, and new drug R&D cannot forever rely on external financing. Second, as a Chinese company, only by完善our market and sales systems can we potentially acquire overseas companies in the future. Third, the industry often exceeds expectations, feeling like things happen overnight. We need to be prepared, otherwise we can only miss opportunities," he said.
The termination of the AbbVie deal also, to some extent, increased the strategic importance of the KRAS inhibitor. Jacobio had previously adjusted its R&D strategy – shifting the SHP2 inhibitor from combination with PD-1 to combination with the KRAS inhibitor.
In Jacobio's response to *China Entrepreneur*, it mentioned that KRAS is one of the most common driver mutations in human tumors, covering about a quarter of solid tumor patients, but has long been considered "undruggable." In an earnings call earlier this year, Wang Yinxiang mentioned that KRAS is a pathway worth developing for 20 years.
Jacobio also noted that KRAS is a field requiring long-term investment and patient validation. Currently, the global landscape is still in an exploration and differentiation phase, with significant differences among companies in molecular design pathways, selectivity, safety windows, and combination strategies, and no absolute leader has emerged yet.
However, this is precisely the state where Wang Yinxiang feels most "comfortable." He once mentioned an abstract product philosophy – "The greatest truths are the simplest." "Behind the complex pathogenesis of each disease, there might be a key factor. If there is a 'simplest path' in new drug development, then this 'path' should not be explained too复杂ly."
Regardless, the collaboration with AstraZeneca will give Wang Yinxiang greater odds of success in the KRAS field. Wang Yinxiang also mentioned the US pharmaceutical company Revolution Medicines, often compared to Jacobio, which has a market capitalization exceeding $15 billion based largely on one product. With Jacobio's market cap around HK$5 billion, he first needs to find a way to bridge this "value gap."