Innovative drugs have received a significant boost!
According to an announcement by Rongchang Biologics, on January 12, the company signed an exclusive licensing agreement with AbbVie Group Holdings for RC148—a novel bispecific antibody drug targeting PD-1/VEGF. The total potential value of this deal is up to $5.6 billion (approximately 39 billion yuan), with an upfront payment of $650 million.
Driven by this news, innovative drugs became the market's main focus today. Rongchang Biologics' A-share surged by the 20% daily limit, while the Hong Kong-listed Innovative Drug ETF rose over 3%. The A-share innovative drug sector climbed more than 2.7%. Companies like Novogene, Puluosi, and Chinese Health saw notable gains. Brokerage statistics indicate that five BD deals in the innovative drug sector were finalized within a single week. Furthermore, January 12 witnessed three major developments in second-generation immuno-oncology therapies.
Rongchang Biologics Gains Momentum
On the evening of January 12, Rongchang Biologics announced that on January 12, 2026, the company signed an exclusive licensing agreement with AbbVie Group Holdings for RC148. RC148 is a novel bispecific antibody drug targeting PD-1/VEGF, developed by Rongchang Biologics.
Under the agreement, AbbVie will obtain exclusive rights to develop, manufacture, and commercialize RC148 outside the Greater China region. Upon regulatory approval of the agreement, Rongchang Biologics will receive an upfront payment of $650 million and is eligible for up to $4.95 billion in development, regulatory, and sales milestone payments, plus tiered double-digit royalties on net sales outside Greater China.
Since its listing on the Hong Kong Stock Exchange in 2020, Rongchang Biologics had previously announced three out-licensing deals. However, both the upfront payment and the potential total deal value of this BD transaction with AbbVie set a new record for the company.
Additionally, reports indicate that AbbVie is the largest by market capitalization among the pharmaceutical companies Rongchang has partnered with. According to the 2025 "Pharm Exec 50" ranking by Pharmaceutical Executive magazine, AbbVie's prescription drug sales for fiscal year 2024 reached approximately $54.484 billion, ranking second globally, trailing the leader Johnson & Johnson by only about 2%.
It is noteworthy that yesterday, three significant events occurred involving core assets of China's innovative drug sector—specifically in second-generation IO therapies. These were: 1) the major and better-than-expected BD deal for Rongchang Biologics; 2) Akeso Biopharma/Summit: BLA submission for AK112 in the U.S.; and 3) 3SBio/Pfizer: Announcement that PF-08634404/SSGJ-707 will initiate five global multi-center Phase III clinical trials in 2026. Analysts suggest the global competitiveness of the second-generation IO therapy field is promising.
Five BD Deals Landed in One Week
Brokerage statistics report that five BD deals in the innovative drug sector were finalized within one week. The collaborative projects span small molecule inhibitors, monoclonal antibodies, bispecific antibodies, ADCs, and RDCs, demonstrating China's leading global positioning across various technology platforms.
On January 9, Yilian Biologics out-licensed its B7H3 ADC to Roche, receiving a $570 million upfront and near-term milestone payment (domestic Phase 3). On January 9, Haisco Pharmaceutical partnered its PDE3/4 dual inhibitor with U.S.-based AirNexis Therapeutics for a $108 million upfront and over $1 billion total deal value (domestic Phase II). On January 12, Zhong Sheng Quan Tai out-licensed an RDC to Novartis (preclinical). On January 12, Rongchang Biologics partnered its PD-1/VEGF bispecific antibody with AbbVie for a $650 million upfront and $5.6 billion total deal (domestic Phase 2). On January 12, SciNeuro Pharmaceuticals out-licensed an Aβ antibody to Novartis for a $165 million upfront and $1.665 billion total deal (preclinical).
Huatai Securities believes that since the Hong Kong innovative drug sector hit a yearly high in September 2025, the Hong Kong Innovative Drug Index had corrected by 24% by the end of 2025. In contrast, the U.S. biotech index XBI rose 29% and the NBI index gained 18% over the same period. The XBI has rebounded over 100% from its low in late April 2025, with large multinational corporations generally rebounding 30% to 50% from their bottoms, and Eli Lilly's market capitalization surpassing $1 trillion for the first time. A significant divergence in the valuation of innovative drug assets has emerged between China and the U.S., with the gap widening notably after September 2025. While the current valuation of Hong Kong-listed innovative drug stocks is not at a historical bottom, it appears highly attractive compared to global peers.
