For an established pharmaceutical company already operating at massive commercial scale, the true challenge has never been expanding revenue—it's identifying the next source of growth. SBP Group (01177) is now entering precisely such a pivotal phase. Over the past several years, the company has aggressively increased R&D spending to broaden its innovative drug pipeline, cementing a distinct innovation-driven identity. By the first half of 2026, with approvals secured for novel therapies like rovatixinib, pelegamab, and naldemedine, alongside expanded indications for core products such as anlotinib, kumoxilib, and zonaitinib, the company's innovative business is entering a period of concentrated value realization. Simultaneously, two out-licensing deals with Sanofi and AstraZeneca, collectively valued at up to $3.43 billion, have transformed "internationalization" from a strategic aspiration into tangible revenue contributions for the first time.
On August 19, SBP Group released its interim results for 2026, revealing an exceptionally strong performance. Revenue hit a record high of RMB 19.44 billion, up 10.6% year-over-year, while adjusted core net profit attributable to shareholders grew 92.3% to RMB 3.34 billion. After a decade spent building its "innovation" credentials, this legacy pharma giant, now steered by the young leadership duo of Tse Yin-yung and Tse Shing-yung, has delivered a mid-year report driven by two strategic pillars: deep AI integration and a comprehensive global push.
Evolving Toward an AI-Native Model: From R&D Efficiency to Full-Chain Transformation
If "innovation" defined SBP Group's past decade, then "All-in on AI" serves as the strategic cornerstone the Tse siblings have set for the next ten years. According to reports, during the interim earnings call, the company disclosed for the first time its substantial AI investments: approximately RMB 600 million has been funneled into AI infrastructure and platform development over the past three years, placing it among the top domestic pharma spenders in this arena. As CEO Tse Shing-yung noted, AI at SBP Group is not an isolated business unit or project but rather an "enabling layer" layered atop R&D, manufacturing, and commercialization. This "AI-native" philosophy is converting the group's vast pipeline scale and specialized data into tangible productivity gains.
On the R&D front, the company's AI-assisted drug development platform now spans six major modalities—small molecules, ADCs, siRNA, OAPD, molecular glues, and TME—covering therapeutic areas including oncology, cardiovascular/metabolic diseases, respiratory/autoimmune disorders, and surgery/analgesia. It is deeply embedded in the early development of 25 pre-IND and clinical-stage programs. The efficiency gains are transformative: in small-molecule discovery, the number of compounds required for PCC identification has plummeted from hundreds to just 50-100; for the oral protein degrader (OAPD) platform, development timelines have been compressed from two years to as little as eight months.
AI's commercial impact extends beyond the lab. The COPD therapy TQC3721 (a PDE3/4 inhibitor), recently out-licensed to AstraZeneca for a total deal value of $1.9 billion, leveraged AI extensively during clinical development. Using proprietary patient-screening models, one clinical site matched 30 trial subjects within the first week—equivalent to what previously took two months to enroll. Additionally, AI-powered RBQM and SDR/SDV agents enabled centralized, intelligent monitoring, reducing manual oversight workload by 35% and cutting associated costs by roughly 30%. Through these AI applications, the Phase III timeline for TQC3721's suspension formulation was shortened by 10-15%, while the dry powder inhaler's Phase I development generated data several months ahead of schedule, accelerating the out-licensing process. The company indicated that AI-driven efficiencies could compress Phase III timelines from the traditional 2-3 years down to 1.8-2.5 years, significantly accelerating the path to market for blockbuster drugs. Tse Yin-yung emphasized that the company's extensive data accumulation forms a core moat, enabling more precise proprietary models. Looking ahead, SBP Group plans to explore frontier areas like central nervous system (CNS) disorders, using AI to tackle the "undruggable" targets that traditional pharma cannot reach.
AI's impact on manufacturing and operations is equally pronounced. In the production of strategic products like Andewei, AI tools applied to cell culture monitoring and purification risk assessment have boosted antibody yields by 20% and cut biologics manufacturing costs by 20%, directly enhancing product gross margins. At the management level, the company has decomposed workflows and delegated rule-based, high-volume, verifiable tasks to AI, freeing human talent to focus on judgment, collaboration, and accountability. This digitally driven "cost reduction and efficiency enhancement" is now translating into concrete profit expansion.
Brand Refresh and a Two-Way BD Engine: SBP Group Launches Its Globalization Era
In June 2026, the Chia Tai Tianqing Global R&D Headquarters in Minhang, Shanghai, officially opened its doors, marking a transformative leap from domestic focus to global reach. The company has designated 2026 as the "inaugural year of comprehensive internationalization," symbolized by the formal adoption of the unified global brand, SBP Group. The acronym SBP—representing Science, Breakthroughs, and Patients—embodies the company's evolution from a leading Chinese innovative pharma player into a participant in the global innovation ecosystem. Underpinning this vision are approximately $3.5 billion in headline out-licensing deals completed in the first half, alongside an increasingly mature "two-way BD" cycle.
During H1, SBP Group secured endorsements from top-tier global pharma through source innovation. In March, it out-licensed global rights to rovatixinib, a first-in-class JAK/ROCK dual-target inhibitor, to Sanofi in a deal totaling $1.53 billion—a record for China's transplant therapy field. This was followed by the $1.9 billion agreement with AstraZeneca for TQC3721's overseas rights, setting a three-year high for single-product respiratory deals originating from China. To date, the group has completed four major out-licensing transactions with an aggregate value exceeding $7 billion, including upfront payments surpassing $1 billion. These milestones validate that SBP Group's R&D capabilities and manufacturing quality meet the stringent standards of global multinational corporations (MNCs), with BD out-licensing becoming a "normalized output."
While the "going global" narrative gains momentum, the "bringing in" strategy is also bearing fruit. A standout highlight was the deep strategic collaboration with GSK. In May and July, the company secured exclusive commercialization rights in mainland China for GSK's hepatitis B functional cure candidate, bepirovirsen, as well as two major respiratory products, Trelegy Ellipta and Incruse Ellipta. Bepirovirsen has the potential to become the world's first approved functional cure for hepatitis B, having demonstrated impressive functional cure rates in the B-Well Phase III program. Trelegy and Incruse, which generated combined global sales exceeding £3.5 billion in 2025, will have their revenues fully consolidated into SBP Group's top line, providing an immediate boost to financial performance.
This "high globalization + high localization" dual-track approach constitutes SBP Group's distinctive internationalization pathway. At the product level, the company is building a global innovation asset base through a combination of in-house R&D, BD, and M&A—such as the acquisitions of Laishin and Hejiya that added bispecific antibody, ADC, and small nucleic acid platforms. Operationally, the company leverages its Shanghai R&D center as the global headquarters, carefully selecting partners based on regional localization capabilities, crafting an internationalization narrative centered on "efficiency first." With multinational giants like Sanofi, AstraZeneca, Merck, Boehringer Ingelheim, and GSK all casting their votes with substantial capital, the certainty of SBP Group's second growth curve is exceptionally high.
Key Takeaways
Under the twin banners of AI and internationalization, SBP Group's pipeline depth across its four core therapeutic areas—oncology, liver disease/cardiovascular-metabolic, respiratory/autoimmune, and surgery/analgesia—is rapidly converting into a steady stream of commercial outcomes. The company has already secured market approvals for 20 Class 1 or Class 2 innovative drugs, with plans to nearly double that number to around 50 by 2030.
Reviewing the 2026 interim report, SBP Group exhibits a "rare vitality." Following a smooth management transition, the company has not only defended its existing market share but also seized a first-mover advantage in innovative drug out-licensing and technological differentiation through its comprehensive "All-in AI" strategy and elevated international ambitions. While the market continues to measure pharma companies using traditional financial metrics, SBP Group has already converted AI into real value-chain output and established a virtuous cycle of value-sharing with the world's top pharmaceutical firms. With out-licensing revenues becoming a recurring contributor and multiple FIC/BIC products accelerating toward launch, the internationalization story of SBP Group is just beginning. This legacy pharma company, deeply committed to innovation and fully embracing AI, may well be one of the more compelling names to watch in Hong Kong's healthcare sector today.
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