Chinese Biotech Firms Turn Profitable as Cross-Border Drug Deals Hit Record
SCMP · 1 SOURCESabout 1 hour ago1 MIN
Summary
Record-breaking cross-border deals helped make some formerly loss-making Chinese biotech companies profitable in the first half of the year, but multinational drugmakers are now signaling plans to tighten deal budgets .
Key Points
- China cross-border deals for innovative drugs reached a record US$110 billion in the first half of 2024, with 81 agreements finalized .
- Hong Kong and Shanghai-listed RemeGen swung to a net profit of approximately 4.66 billion yuan (US$693.2 million) in the first half .
- Healthcare and biotech firms raised HK$14.1 billion via 11 first-half listings on the Hong Kong Stock Exchange .
- Six biotech companies went public on mainland China's A-share market, raising a combined 2.12 billion yuan .
- Analysts noted that out-licensing deals have overtaken IPOs and pre-IPO fundraising as the main funding option for cash-starved Chinese biotech firms .
Why It Matters
While Chinese biotech assets remain highly cost-effective compared to global peers, questions linger over whether the sector's reliance on overseas licensing income can be sustained if multinational pharmaceutical companies become more selective with their acquisition budgets .
While Chinese biotech assets remain highly cost-effective compared to global peers, questions linger over whether the sector's reliance on overseas licensing income can be sustained if multinational pharmaceutical companies become more selective with their acquisition budgets .