China's biotech moment ignites a 60% stock rally that beats AI
China's biotechnology stocks have shaken off a four-year slump to be among the hottest performers in Asia this year and funds are tipping further gains.
The Hang Seng Biotech Index has surged more than 60 per cent since the start of January amid investor enthusiasm over a pair of billion-dollar deals involving foreign firms licensing Chinese drugs. Share gains at two highly anticipated listings of local producers have further burnished the sector's appeal.
'China biotech is no longer just an emerging story – unlike 10 years ago – it is now a disruptive force reshaping global drug innovation,' said Yiqi Liu, senior investment analyst at Exome Asset Management in New York. 'The science is real, the economics are compelling, and the pipeline is starting to deliver.'
The surge in China-listed biotech firms is further evidence that the mainland is becoming a centre for global innovation. The rally in the sector this year outpaces the 17 per cent gain in China's tech stocks that was driven by the release of DeepSeek's breakthrough artificial-intelligence app in January.
A major reason for the share gains were two mega-sized licensing deals. Pfizer said on May 19 that it had agreed to pay a record US$1.25 billion to license an experimental cancer drug from China's 3SBio, and also invest US$100 million in the firm's shares. Two weeks later, Bristol-Myers Squibb said it would pay Germany's BioNTech as much as US$11.5 billion to license a cancer drug that BioNTech had itself licensed from China's Biotheus in 2023.
Some of the gains in biotech shares this year have been stratospheric. 3SBio has surged 283 per cent, topping a Bloomberg gauge of global biotech stocks. RemeGen, which develops antibody drugs, has climbed more than 270 per cent after saying it was approached by multinational pharmaceutical firms for potential licensing deals.
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China's growing influence through pharmaceutical mergers and acquisitions and deal-making is also causing investors to take note. In the first quarter alone, the value of such deals involving local players doubled from the year before to US$36.9 billion. That amount made up more than half the global total of US$67.5 billion.
Chinese biotech companies are having 'their own DeepSeek moment', said Dong Chen, chief Asia strategist at Pictet Wealth Management in Hong Kong. There is more upside from here, he said.
Investor interest in biotech – which involves the use of living organisms to make medicines and other products – can be seen in the big runup at recent initial public offerings.
Shares of Duality Biotherapeutics, which develops cancer treatments, more than doubled on their first day of trading in Hong Kong on Apr 15. Jiangsu Hengrui Pharmaceuticals, the nation's largest drugmaker by market value, saw its stock jump 25 per cent on its May 23 debut, even after being issued at the top end of the marketed range. Duality has now risen 189 per cent since its IPO, while Jiangsu has gained 31 per cent.
Still, some say the rally may be getting stretched.
'Bears, mostly healthcare specialists, plan to take profit at this point, and some investors prefer the healthcare laggers with capability of constant dividend payout and stable revenue growth,' Bank of America analysts including Ethan Cui in Hong Kong wrote in a research note this month.
Some investors also said they viewed the rush of recent licensing deals as a one-off, and they were refusing to grant valuation multiples to the companies, the analysts wrote.
Talent returns
While the recent ratcheting up of trade tensions between the US and China has been a negative for many mainland firms, it's also resulted in talent flowing back to China and creating more research-and-development capability, according to Nicholas Chui, a Chinese equity fund manager at Franklin Templeton in Hong Kong.
Jefferies is also bullish, saying the increase in US tariffs is unlikely to prove an obstacle to Chinese biotech firms.
Many of the Chinese biotech companies already have US partners and are therefore considered as service providers rather than product exporters, said Cui Cui, head of Asia healthcare research at the company in New York. BLOOMBERG
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Straits Times
2 hours ago
- Straits Times
Serene village in China's Xi'an offers new approach to Alzheimer's care
Instead of confining sufferers behind locked doors or restricting them to rigid routines, the village offers an environment that meets them where they are. ST PHOTO: GAVIN FOO SINGAPORE/XI'AN – Nestled amid the verdant forest parks and mountain springs of the Zhouzhi Louguan eco-cultural tourism resort zone in Xi'an, China, is a one-of-its-kind village for seniors. Here, mornings are unhurried. In the centre of the village, a man-made lake mirrors the daylight, with the sound of water gently lapping against stone. A short stroll along the lakeside brings seniors to a bright, spacious dining hall, where breakfast is served. There is quiet chatter – even laughter – as friends greet one another, some for the third or fourth time that morning. Afterwards, a few residents go for a light workout in a tree-lined gazebo, while others head to a calligraphy or music class. If the place looks like a typical quaint Chinese village, that is because it was designed to mimic one as much as possible. Clues like a post office that does not send or receive actual mail, a convenience store that uses fake currency, and bus routes that loop endlessly around the tiny compound give away the nature of the village. Spanning over 43,000 sq m, or about the size of six football fields , the compound is an Alzheimer's disease village – a first for China. It is run by real-estate-turned-healthcare company Perennial Holdings. A mock post office and florist at the Perennial Alzheimer's Care Village Xi'an. ST PHOTO: GAVIN FOO Earlier in June, the Singapore-based company took journalists to tour the compound along with its healthcare facilities in other Chinese cities. The innovative care model in the Perennial Alzheimer's Care Village Xi'an is designed for those living with a disease that progressively robs them of their memory, thinking and reasoning. The illness is the most common disease that causes dementia, an umbrella term for symptoms ranging from confusion to changes in behaviour, to problems with language. Instead of confining sufferers behind locked doors or restricting them to rigid routines, as in traditional eldercare facilities, the village offers an environment that meets them where they are – one built on safety, dignity and choice. Residents can move about freely and interact with one other. Staff such as doctors, nurses and physiotherapists also aim to be part of the residents' lives, engaging with them like friends or family members on top of being medical professionals. The care model was first popularised by the Hogeweyk dementia village in the Netherlands in 2009. More than a decade later, similar villages offering inclusive and small-scale communities for dementia patients have been set up in countries like France, Canada, Norway and Switzerland. When setting up the Xi'an project, the Perennial team visited some of these villages to learn from their experiences. Today, the Xi'an village comprises a dementia care home with about 450 beds, a nursing care hospital, a rehabilitation hospital and an international eldercare research institute. Since it opened progressively from March 2024, the village has hosted over 50 residents, with 26 still residing there currently. Staff aim to be part of the residents' lives, engaging with them like friends or family members on top of being medical professionals. ST PHOTO: GAVIN FOO Dr Song Xiangying, dean of the village, said the majority of the patients, who have medium to severe symptoms, have become less agitated, happier and calmer since they were admitted to the facility. She cited the example of a man who, during his first few days after admission, would insist on going home after his meals. Instead of trying to convince him to stay, she waited with the man at one of the 'bus stops' in the compound. 'We chatted about how long it would take for him to go home and even walked to another bus stop when we had waited too long,' said Dr Song, adding that going along with the man's version of reality helped to calm him. After a few days, he stopped wanting to go home. One of the 'bus stops' in the compound. ST PHOTO: GAVIN FOO Dr Song also said no resident has wandered out of the compound. Such behaviour, known as elopement, is common because patients may be disorientated or have a desire to fulfil former obligations or unmet needs. While the patient and understanding staff play a key role in its success, the facility is also equipped with high-tech security measures to prevent residents from wandering off. 'We use facial and video recognition to monitor the residents' whereabouts, so they do not need to put on wearable devices like bracelets,' said Dr Song. All staff, including security guards and cleaners, know residents by name and keep a watchful eye on them, she added. Residents can move about freely and interact with one another. ST PHOTO: GAVIN FOO Among the residents is Madam Wang Lai Fei, 76. While she had displayed early signs of Alzheimer's disease since 2023, her condition deteriorated in January after her husband died. Her daughter-in-law Lu Jing said the elderly woman had wandered out on her own and got lost twice. Ms Lu then decided to admit Madam Wang to the facility as she was stressed from caregiving. 'Now, her condition is stable and she has even gained weight. She is very comfortable here, with a group of friends she can chit-chat with every day ,' said Ms Lu. (From left) Dr Song Xiangying, dean of the village, with Madam Wang Lai Fei and Madam Wang's daughter-in-law Lu Jing. ST PHOTO: GAVIN FOO Assistant Professor Saima Hilal, from NUS' Saw Swee Hock School of Public Health, said that since dementia is a progressive condition with no known cure, the success of dementia villages should be measured not only by clinical outcomes like slowing of decline, but also, more importantly, by indicators of well-being and quality of life. Some useful benchmarks include engagement in daily activities; reduced reliance on antipsychotic medication, physical restraints or hospital admissions; and cost-effectiveness over time, especially when factoring in fewer emergency admissions or complications. Singapore tried to pilot its own dementia care village in 2020 in Buangkok Green, but the project attracted only one bid – a joint one by Perennial Holdings subsidiary Pre 11 and nursing and personal care operator Orpea. Ultimately, the project was shelved because the Government found the bid of $15 million to be too low. Perennial chief executive Pua Seck Guan said that if Singapore were to revive the project, the company would be 'happy to explore' opportunities, but he also cited high land costs as a challenge. The Perennial Alzheimer's Care Village Xi'an spans over 43,000 sq m, about the size of six football fields. ST PHOTO: GAVIN FOO Prof Hilal noted that besides land costs, operational costs for such care models would also be higher due to the need for trained staff and low resident-to-staff ratios. Another challenge is the limited public-private investment, as the business model is not yet fully proven in South-east Asia. Therefore, instead of replicating large-scale dementia villages, hybrid models could be more feasible in Singapore, she said. These include embedding dementia-friendly design features in HDB estates and active ageing centres, setting up smaller cluster-living homes using under-utilised community spaces, and training neighbourhood volunteers and caregivers to support dementia-inclusive communities. 'These steps are more scalable and culturally appropriate for Singapore's high-density environment, and can deliver many of the same benefits as full-fledged dementia villages,' said Prof Hilal. Join ST's WhatsApp Channel and get the latest news and must-reads.
Business Times
2 hours ago
- Business Times
Perennial explores Reit listings in China with ‘aggressive' expansion in medical, eldercare sectors
[SINGAPORE] Property player Perennial Holdings is exploring real estate investment trust (Reit) listings in China – one for commercial properties and another for healthcare assets, the company's chief executive, Pua Seck Guan, told The Business Times. The Reits, which could be listed in Shanghai or Shenzhen, would ride on booming demand from yield-hungry investors on the mainland. 'The Chinese love this class of assets. If you go and do a check today, the Chinese Reit yield is below 5 per cent; in Singapore, it's more than 7 per cent,' said Pua in an interview at the company's one-north office. With deposit rates under 1 per cent, Chinese investors are hunting for dividends. 'So if you give them 4 to 5 per cent (in yield), they will be very happy,' the CEO said, adding that there is demand from both retail and institutional investors. Founded in 2009, Perennial has five healthcare-centric mega developments in China – in Chengdu, Kunming, Xi'an, Chongqing and Tianjin – and a commercial-focused one in Hangzhou, among other assets. It also operates China's first fully foreign-owned hospital in Tianjin, has another coming up in Guangzhou, and is invested in major eldercare company Renshoutang. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Reits were introduced in China in 2021, and demand has been 'stratospheric', according to a Bloomberg report in February. There were 28 Reits listed in China last year – nearly trebling from the number in 2023 – which raised a record 64 billion yuan (S$11.4 billion). Perennial may also consider listing its healthcare business in Hong Kong or mainland China, said Pua. The company, which traded on the Singapore Exchange from 2014 to 2020, has no plans to pursue listings here. Pua cited liquidity and valuations as concerns, along with the fact that the majority of Perennial's business is now in China. The company began its foray into China healthcare a decade ago with the opening of a medical hub in Chengdu. It now owns and operates more than 25,000 beds in medical and eldercare facilities in Singapore and China. In Singapore, Perennial, together with Far East Organization, is redeveloping Golden Mile Complex. There will be medical suites, offices, retail spaces and a residential tower. The company is also heading a consortium that is redeveloping the former AXA Tower in Shenton Way. A patient at the Perennial Rehabilitation Hospital in Tianjin. PHOTO: ST First-mover advantage Perennial's listing plans come on the back of big ambitions to expand in China's medical and eldercare sectors. In late 2024, it announced the 500-bed Perennial General Hospital Tianjin, the first such facility to be fully foreign-owned in China, with a one billion yuan investment. Months later, it inked a deal to build a second fully foreign-owned hospital in Guangzhou, also with a one billion yuan investment. Perennial is now concluding talks to open another fully foreign-owned hospital in Shanghai, said Pua. Tianjin, Guangzhou and Shanghai are among the nine trial cities where China has allowed fully foreign-owned hospitals to operate, in a pilot announced in September 2024. The other trial cities are Beijing, Nanjing, Suzhou, Fuzhou, Shenzhen and Hainan. Pua hopes to do projects in more than half of these nine cities. 'We think the Chinese medical (sector) is just at a very nascent stage… The market is huge, so we want to seize this opportunity. I think we have a first-mover advantage.' He sees the Chinese authorities being supportive of private operators such as Perennial that can service the medical needs of the upper middle class segment. The company also wants to ride on China's emerging medical tourism industry. It hopes to attract patients from Russia, Central Asia and South-east Asia – including Vietnam, Laos and Cambodia, said Pua. He views Guangzhou as an ideal location for medical tourism, due to its good air connectivity, infrastructure and weather. Perennial's rehabilitation facilities could also be a pull factor, with their combination of Western and traditional Chinese medicine (TCM), he added. That said, he acknowledged that the more challenging part is attracting patients who are willing to undertake surgery, and emphasised the need to build trust and reputation. Dr Daniel Liu, president of Perennial's general hospital in Tianjin, says the company wants to grow medical tourism in China. PHOTO: ST Perennial's Tianjin general hospital aims to have 30 per cent of its revenue come from international patients within its first year, said its president, Dr Daniel Liu. 'Medical tourism can't yet be called an industry in China; there are some signs, but not yet. What we hope to do now is to make this cake bigger,' he said during a tour of the hospital. Dr Liu believes that the hospital could even attract patients from the UK, where waiting times for surgeries are long. Some of China's specialised medical services – such as cardiology, orthopaedics and urology – are competitive with international peers, he said. 'Very aggressive' Perennial is 'actually very aggressive' with its expansion plans, said Tan Bee Lan, the company's healthcare chief executive, on the sidelines of a visit to a Renshoutang facility in Shanghai. Asked about the timing of the moves – amid global uncertainty and weak consumer spending in China – Tan said that she does not see a 'material effect', given the counter-cyclical nature of healthcare. There is also an opportunity to secure assets at attractive valuations. 'You should take projects when no one wants to do them – that is when you get the land, the property, at a very reasonable price… This is what Perennial is doing. We're going around very aggressively, looking at suitable properties to take over,' she said. Tan Bee Lan, Perennial's healthcare chief executive, is sanguine about macroeconomic headwinds. PHOTO: ST Perennial also plans to apply what it has learnt in Tianjin to an upcoming Singapore project: the city-state's first private assisted-living development, for which the company won a tender in June 2023. Said Pua: 'To be honest, it's very, very difficult to make money in Singapore because of the high real estate costs, the high labour costs… But I think being headquartered in Singapore, we thought (it would be) good to do something and (showcase) a model.' 'So this project will contain the ingredients that we have in Tianjin,' he added, citing how the development in Parry Avenue will also integrate eldercare with TCM rehabilitation and a geriatric care centre. With the Tianjin hospital opening more doors, Pua believes that the company is two to three years 'ahead of anybody' in its expansion plans. 'I'm excited,' he said. Perennial's key shareholders include agribusiness Wilmar International – where Pua is also chief operating officer – and Wilmar co-founder Kuok Khoon Hong.
Business Times
2 hours ago
- Business Times
A ‘village' where Alzheimer's patients move about freely: Perennial's new care model in China
[XI'AN] Near the scenic Qinling mountains of Xi'an is a life-sized replica of a typical Chinese town. It features residential blocks, a post office, grocery store, florist and playground. Bus stops line the road running through the town. Geese honk near a fountain, looking for food. Elderly people go about their morning exercise routines. This facility is China's first Alzheimer's disease care village, built by Singapore-based healthcare and real estate company Perennial Holdings and opened progressively from March 2024. The 43,000-square-metre development is premised on a novel idea: that Alzheimer's patients should be able to move freely – whether shopping for their own groceries or posting their mail – rather than being restrained within a nursing home. A post office (left) and florist within the Perennial Alzheimer's Care Village Xi'an; the facility looks like a typical Chinese town. PHOTO: ST 'We are building a healing community where people can live independently,' said Dr Song Xiangying, dean of the Perennial Alzheimer's Care Village Xi'an. 'The daily living abilities of those aged 60 to 70 are still quite strong, so there is a need for such an open-living community. They are very mobile – you can't lock them up in one place unless you use psychiatric drugs, which will do the greatest harm,' she said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The facility is 'still ramping up', said Tan Bee Lan, Perennial's healthcare chief executive. To date, it has hosted more than 50 residents, with 26 current residents. The development includes an eldercare complex, and nursing and rehabilitation hospitals, as well as a research institute for geriatric health management. Residents can choose between a single or double room, or suites for families with high-need patients. The average monthly fee ranges from 8,500 yuan (S$1,517) to 13,000 yuan, depending on the level of care and room type. Lu Jing (right) with her mother-in-law, who resides in the care village; the facility is 'cost-effective', she notes. PHOTO: ST While such a facility is not necessarily cheap, it is 'cost-effective', said Lu Jing, whose 76-year-old mother-in-law is a resident. Private helpers are expensive and unable to work over the holidays, she noted. 'She is happy here,' Lu said of her mother-in-law. 'At home, there wouldn't be as many people to accompany and talk to her.' Non-drug approach Patients here are encouraged to take ownership of their daily routines – strolling the grounds, meeting for coffee, or learning to play the Bunne guitar, a three-chord instrument designed for seniors. 'Just like normal people, they can fulfil all their needs with the outside world and have close contact with nature,' said Dr Song. 'If we confine them to a building, they may lose their sense of space and feel little relief from anxiety and illness.' Dr Song (left), with residents of the care village, notes that they can fulfil all their needs with the outside world and have close contact with nature. PHOTO: ST Running such a facility is no easy feat, as some Alzheimer's patients can display behavioural issues, including aggressive outbursts. The care village uses facial recognition technology to keep its residents safe as they move about, while also incorporating non-drug intervention to deal with behavioural issues. One room within its clubhouse is dedicated to play therapy, where seniors can amuse themselves with figurines in a small sandpit. Dr Song cites this as a means for patients to express their feelings. In some cases, their outbursts could simply be related to discomfort with the temperature or hunger – these can be managed, she noted. Traditional Chinese medicine treatments are also provided to help patients with common symptoms of Alzheimer's, such as insomnia. A resident of the care village undergoing multi-sensory therapy; other treatments provided include traditional Chinese medicine. PHOTO: ST Market need 'beyond doubt' Perennial had in fact initially planned to build such a facility in Singapore, said its chief executive Pua Seck Guan. In 2020, it bid to develop a dementia village comprising 10 bungalows in Gibraltar Crescent in Sembawang. 'But it was a shame; we were the only bidder… and it ended up that (the authorities) did not award us because they cited that we did not meet the reserve price. We didn't know there was such a reserve price,' he said. Pua was nevertheless convinced of the need for an Alzheimer's care village. He cited how even wealthy patients who can hire two nurses would still lack the stimulation needed to manage the condition if they remain stuck at home. As part of his research, Pua visited care villages in Europe, such as De Hogeweyk in the Netherlands, which serves patients with severe dementia. He was impressed by the autonomy that residents there enjoyed. 'Since we tried to do it in Singapore – (and) couldn't do it – I spent a fraction of the money and did it in China in a bigger way,' he said, adding that he could lease the real estate rather than have to own it, making the project more affordable. Residents getting onto an electric buggy for a joyride in the village compound; residents are able to move freely within the facility. PHOTO: ST That said, such a project still comes with manpower challenges. Taking care of dementia patients requires specialised skills and requires not just nurses, but also nutritionists and social workers, said Dr Song. 'So labour costs may be higher – not because of the individual staff cost, but because of the manpower requirements of the work we want to do,' she said. Asked about the breakeven timeline for the Xi'an facility, Pua estimated that it may take three to four years. 'This project is not easily money-making, mainly because it's new,' he said. Dr Song echoed this sentiment, noting: 'As first movers, we have our difficulties… It takes time to cultivate the market.' But there is undeniably a need for more Alzheimer's care options in China, especially with its ageing population. 'This is beyond doubt,' she said.
