Bristol-Myers Squibb has entered into a collaboration and licensing agreement with Jiangsu Hengrui Pharmaceuticals, with a total potential value of up to $15.2 billion. This deal enables the U.S. drugmaker to access a portfolio of early-stage assets, leveraging China's efficiency in early-stage development. The agreement covers 13 early-stage programs in oncology, hematology, and immunology. Bristol-Myers Squibb will pay Hengrui up to $950 million by 2028, including a $600 million upfront payment. The transaction is expected to close in the third quarter. The potential total scale of this deal indicates Bristol-Myers Squibb is making a significant bet on China-originated innovative drugs. Currently, multinational pharmaceutical companies are increasingly turning to China to source experimental therapies at relatively lower costs and with faster clinical validation pathways. Under the deal structure, Bristol-Myers Squibb will obtain exclusive global rights, excluding mainland China, Hong Kong, and Macau, for four of Hengrui's programs. In return, Hengrui will secure exclusive rights within China for four of Bristol-Myers Squibb's therapies. Bristol-Myers Squibb will retain rights for the rest of the world, while the two companies will jointly develop five additional programs. Hengrui will be fully responsible for the early clinical development and proof-of-concept work for all programs, which could grant Bristol-Myers Squibb access to a broader pipeline while relying on Hengrui's early-stage development capabilities. If options for jointly discovered therapies are exercised and development, regulatory, and commercial milestones are achieved, the total value could reach approximately $15.2 billion. For investors, the immediate market reaction points to the significant importance of this partnership for Hengrui's market positioning. Following Hengrui's Hong Kong listing last May, which raised nearly $1.5 billion, its Hong Kong shares surged by as much as 16% on Tuesday, while its A-shares hit the 10% daily limit-up before paring some gains. This transaction also aligns with the broader trend of global drugmakers turning to Chinese pipelines. Examples include GlaxoSmithKline's agreement last year to pay Hengrui a $500 million upfront for a potential chronic lung disease treatment and options to license other drugs, as well as Eli Lilly's collaboration with Innovent Biologics in February. According to government data, the total value of out-licensing deals by Chinese pharmaceutical companies reached over $130 billion by 2025, indicating that Bristol-Myers Squibb is joining a wider shift where global players are collaborating with Chinese firms at earlier stages of the drug discovery process.
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