Chinese biotech shares are experiencing a powerful resurgence, buoyed by a wave of optimism around cutting-edge cancer treatments and strategic licensing deals with global pharmaceutical giants. According to reporting by the Financial Times, the Hang Seng Biotech Index has soared 61.8% year-to-date—triple the return of Hong Kong’s broader Hang Seng Index—making biotech one of the standout performers in China’s capital markets in 2024.
The rally signals a sharp reversal from a years-long downturn that plagued the sector following 2021, when market headwinds, tightening US-China relations, and internal reforms triggered a collapse in valuations and investor confidence. Compounding those woes was Beijing’s sweeping anti-corruption campaign in the medical sector, which further discouraged investment.
Now, a combination of robust innovation, favorable clinical results, and cost-effective R&D capabilities has helped restore investor appetite. “We had a nuclear winter for Chinese biotech financing, but green shoots are coming back fast,” said Shannon Cheung, co-founder of Likang Life Sciences, a Beijing-based biotech working on cancer vaccines.
At the heart of the resurgence is a class of immunotherapy drugs known as PD-1 inhibitors, which are increasingly showing promise in treating a wide range of cancers. Chinese companies are developing next-generation variants, including PD-1 VEGF combinations, that are producing strong clinical outcomes and attracting attention from major Western pharmaceutical firms seeking new therapies as their existing patents near expiry—a phenomenon known as the “patent cliff.”
One such example is 3SBio, a Shenyang-based company that inked a licensing deal with Pfizer in May for its PD-1 therapy, netting an upfront payment of $1.25 billion. Its stock has skyrocketed 318% this year. Similarly, Akeso, a biotech headquartered in Guangdong, has demonstrated that its PD-1 drugs can go toe-to-toe with Merck’s blockbuster immunotherapy, Keytruda. Its shares have jumped 92% year-to-date.
Investors are also taking note of Chinese advancements in the red-hot obesity drug space. Hansoh Pharma, based in Jiangsu, recently signed a $1.9 billion exclusive licensing agreement with Merck for its GLP-1 weight-loss drug, pushing its share price up 86% this year.
Analysts point out that Chinese firms are developing these drugs at a fraction of the cost of their Western peers, thanks to significantly lower labor, manufacturing, and trial costs. Jialin Zhang, head of China healthcare research at Nomura, told the Financial Times that several top-tier Chinese biotechs have already reached profitability in 2024—an uncommon milestone in a sector often characterized by extended pre-revenue development phases. “That’s a game-changer,” Zhang noted.
Still, geopolitical risks loom over the sector. The United States, which accounted for half of all global prescription drug revenues in 2022, remains the most important market for biopharma. Rising US-China tensions and the Trump administration’s threat of up to 200% tariffs on Chinese pharma products have cast a shadow over the future of cross-border deals.
Even so, industry insiders believe licensing activity will continue. Jefferies’ head of Asia healthcare research, Cui Cui, said that while US biotech firms are lobbying against Chinese tie-ups, regulatory focus remains on preserving the economic strength of domestic pharma giants. “As long as you do not hurt the economics of US pharma you will be fine,” she told the Financial Times.
Some Chinese firms are setting their sights even higher. “They want to be Pfizer. That’s their ambition,” said Emily Dong, head of equity at Conning Asia Pacific. “Whether they have the capability? We’ll have to wait and see.”
For now, China’s biotech sector appears to be on a renewed growth trajectory, powered by scientific progress, global collaboration, and investor enthusiasm that shows little sign of slowing.
