Hengrui Pharma announced at midday on the 12th that it has entered into a global strategic collaboration and licensing agreement with Bristol-Myers Squibb (BMS). The partnership aims to jointly advance 13 early-stage programs spanning oncology, hematology, and immunology to accelerate innovative drug development. According to the agreement terms, BMS is obligated to pay Hengrui up to $950 million in specified payments. This includes a $600 million upfront payment, a $175 million first anniversary payment, and a $175 million second conditional anniversary payment in 2028. The total potential value of the agreement could reach approximately $15.2 billion if options for joint development projects are exercised and all development, registration, and commercialization milestones are achieved.
The stock of Hengrui Pharma in Hong Kong showed strong performance during the trading session on May 12, with its share price surging over 15% at one point, reflecting the market's positive reaction to the significant news. The company issued a major announcement at midday, revealing the global strategic collaboration and licensing agreement with global pharmaceutical giant Bristol-Myers Squibb (BMS) to jointly advance 13 early-stage innovative drug projects in oncology, hematology, and immunology. This collaboration not only helps accelerate the R&D process for innovative drugs but also represents a significant breakthrough in Hengrui Pharma's internationalization strategy, aiming to benefit patients worldwide.
According to the agreement terms, the total potential transaction value could reach about $15.2 billion, with the portion payable by BMS to Hengrui reaching up to $950 million. This substantial transaction amount not only demonstrates the international partner's recognition of Hengrui's R&D capabilities but will also provide Hengrui with significant capital inflow, further solidifying its leading position in the innovative drug field. For investors, this collaboration marks a substantive step in Hengrui Pharma's strategic transition from "generic-innovation combination" to "original drug globalization," which is expected to enhance its long-term valuation rationale and global competitiveness.
The trend of innovative drug globalization is accelerating, with leading pharmaceutical companies significantly speeding up their internationalization processes. Hengrui Pharma's strategic collaboration with Bristol-Myers Squibb (BMS), involving 13 early-stage projects with a total potential value of $15.2 billion, highlights the high recognition by multinational pharmaceutical companies of China's high-quality innovative assets. This major deal not only brings Hengrui substantial upfront and milestone payments but also accelerates the commercialization process of its global R&D pipeline through deep collaboration, aligning with the investment logic in industry research reports that favors pharmaceutical firms already partnered with multinational companies.
At the policy level, biomedicine has been included for the first time in the national list of "emerging pillar industries," greatly boosting industry confidence. The total value of out-licensing deals for Chinese innovative drugs exceeded $60 billion in the first quarter of 2026, with upfront payments reaching $3.4 billion, maintaining a positive development momentum. This indicates that China's innovative drug sector has shifted from mere follow-on imitation to an original R&D stage with global competitiveness, with both the frequency and value of business development (BD) transactions reaching record highs.
It is advisable to focus on companies with unique technology platforms that have established deep partnerships with multinational corporations (MNCs). Leading firms such as Hengrui Pharma, Kelun-Botech, and CSPC Pharmaceutical Group, leveraging their strong R&D capabilities and commercialization strength, occupy favorable positions in the wave of globalization. As more collaborations like the one between Hengrui and BMS materialize, the global valuation system for domestic innovative drug companies is expected to be reshaped, with internationalization benefits becoming a core driver of performance growth.
Hengrui Pharma's global strategic collaboration with Bristol-Myers Squibb, with a potential value of up to $15.2 billion, marks a historic breakthrough in the company's internationalization journey. The deal includes not only $950 million in specified upfront payments but also accelerates the company's innovative R&D efforts in oncology, hematology, and immunology through the joint advancement of 13 early-stage core pipeline assets. Under the favorable policy backdrop of the state explicitly positioning biomedicine as a primary emerging pillar industry, Hengrui Pharma, as an industry leader, has received strong endorsement from a multinational pharmaceutical giant for its "original drug globalization" strategy, significantly enhancing its competitiveness in the global market. Coupled with the industry's positive trend of record-high total BD transaction values for innovative drugs in Q1 2026 and improved profitability for several companies, Hengrui Pharma, with its profound R&D foundation and excellent commercialization capabilities, is poised to further boost its performance through substantial milestone payments and sales royalties. This major collaboration not only optimizes the company's capital structure but also validates the international leading position of its technology platform, significantly improving its long-term valuation rationale and offering investors highly certain growth opportunities and substantial return expectations.
Related ETFs: For pure exposure to innovative drugs, consider the Hong Kong Stock Connect Innovative Pharma ETF Huabao (520880), which invests 100% in innovative drug R&D companies. The top ten holdings account for over 70% of the portfolio, highlighting its focus on leaders, with underlying assets listed in Hong Kong offering high volatility and T+0 trading. The top ten constituent stocks are Akeso, Innovent Biologics, BeiGene, CSPC Pharmaceutical Group, Sino Biopharmaceutical, Hansoh Pharma, 3SBio, Kelun-Botech, RemeGen, and Duality Biologics.
To mitigate volatility, consider the only on-exchange Pharma ETF Huabao (562050), featuring an exclusive allocation of "70% innovative drugs + 30% traditional Chinese medicine." It is a scarce offering in the market, combining the high growth of innovative drugs with the high dividends of traditional Chinese medicine. The top ten constituent stocks are Hengrui Pharma, Zhejiang NHU, Yunnan Baiyao, Zhangzhou Pien Tze Huang, Kelun Pharma, Fosun Pharma, Huadong Medicine, Salubris, Changchun High & New Tech, and BeiGene.
Note: ETF funds do not charge sales service fees. When subscribing for or redeeming fund shares, subscription/redemption agent brokers may charge a commission of up to 0.5%, which includes related fees charged by stock exchanges and registration institutions. Please refer to each fund's legal documents for specific fee rates. Risk Disclosure: The index constituents mentioned are for illustrative purposes only. Descriptions of individual stocks do not constitute any form of investment advice and do not represent the holdings or trading动向 of any fund managed by the manager. The fund manager assesses the risk rating of Pharma ETF Huabao and its feeder fund as R3-Medium Risk, suitable for Balanced (C3) and above investors. The risk rating for Hong Kong Stock Connect Innovative Pharma ETF Huabao and its feeder fund is R4-Medium to High Risk, suitable for Aggressive (C4) and above investors. Any information appearing in this article (including but not limited to individual stocks,评论, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analysis, or predictions herein do not constitute investment advice of any kind to the reader, and no liability is accepted for any direct or indirect losses arising from the use of this content. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past fund performance is not indicative of future results. Fund investment involves risks.
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