On Monday, Chinese biopharma stocks experienced significant gains in Hong Kong, driven by a Reuters report indicating that the U.S. Treasury Department is drafting regulations that would permit American pharmaceutical companies to continue licensing most drugs from Chinese firms. Innovent Biologics saw a 6% increase, Akeso surged by 8%, and CSPC Pharmaceutical Group gained over 6%.
The Hang Seng Biotech Index rose more than 5%, reflecting broader investor optimism. The proposed rules would exclude licensing for drugs related to pathogens or biotechnology with potential military applications, marking a divergence from stricter regulations imposed on other sectors like artificial intelligence and semiconductors.
According to GlobalData, nearly half of U.S. drug licensing deals in 2025 were with Chinese companies, highlighting the importance of this market. Notably, Pfizer's partnership with Innovent, valued at up to $10.5 billion for oncology research, underscores the potential for collaboration.
Despite ongoing geopolitical concerns, the Chinese biopharma sector has seen a record 81 licensing deals worth a total of $110 billion in the first half of 2026, as reported by Nomura. The bank suggests that investors are becoming increasingly resilient to geopolitical risks, driven by the strong value proposition of Chinese firms in drug development.
China's commitment to globalization in its pharmaceutical sector, as outlined in its 15th five-year plan, further supports the expectation of continued growth in China-U.S. licensing agreements