On the evening of December 14, VIVA BIOTECH (01873) announced that Swedish Orphan Biovitrum AB ("Sobi") had entered into an acquisition agreement with Arthrosi, a company incubated through VIVA BIOTECH's investment. The deal, valued at up to $1.5 billion, includes $950 million in upfront payments (subject to customary adjustments) and up to $550 million in regulatory and commercial milestone payments, with completion expected in the first half of 2026. VIVA BIOTECH disclosed it could receive up to approximately $40 million in investment returns, contingent on milestone achievements.
This news initially boosted VIVA BIOTECH's stock, which surged 13.92% to HK$2.21 in early trading on December 15. However, the rally lasted only about 10 minutes before the gains evaporated, with the stock even dipping into negative territory intraday, reflecting a 14.95% swing.
The volatility follows a two-month downtrend. After hitting a yearly high of HK$3.27 on October 8, VIVA BIOTECH's shares entered a prolonged correction, bottoming at HK$1.80 on November 24—a 44.95% drop from its peak. Earlier rallies in August and October showed divergent momentum: the August surge, marked by a 15.63% single-day gain and six consecutive trading days of upward movement, was supported by robust trading volume. In contrast, October's "six-day winning streak" lacked volume backing, signaling weak market participation and foreshadowing the subsequent sell-off.
As of December 12, only 24.69% of holders remained profitable, with the average cost stuck at HK$2.30 and a heavy concentration of "bagholders" near HK$2.50. The December 15 rebound to HK$2.21 triggered profit-taking, exacerbating the intraday reversal amid thin demand.
Beyond market sentiment, VIVA BIOTECH's "Equity-for-Service" (EFS) model is entering a harvest phase. The company leverages its drug development expertise to secure stakes in promising biotech startups, with 93 incubated firms to date. Eighteen have exited partially or fully, generating RMB76.5 million in proceeds, while eight others raised $294 million in new funding. H1 2025 saw RMB52.6 million in fair-value investment gains, with the Sobi-Arthrosi deal potentially adding $40 million.
Financially, VIVA BIOTECH reported H1 2025 revenue of RMB832 million (down 15.27% YoY) but a 4.28% rise in net profit to RMB122 million, with gross margin expanding 6.3 percentage points to 40.8%. AI-driven drug discovery now accounts for 12% of new orders.
Trading at a PS ratio of 2.05x—far below the industry's 8.66x and 12% under its three-month average—VIVA BIOTECH appears undervalued amid fundamental improvements, warranting investor attention at current levels.
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