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South China Morning Post
04-08-2025
- Business
- South China Morning Post
Innovent, BeOne are poised for profits in 2025, in milestone for Chinese biotech start-ups
Innovent likely to post a first-half net profit of US$36.4 illion, and BeOne's first-half net rofit is expected to come in at US$42 million A pair of Hong Kong-listed mainland Chinese biotechnology firms are poised to turn a profit this year as their revenue from novel drugs finally outstrips costs related to research and development and marketing, according to analysts. 'Chinese biotechs have matured significantly and are creating value for Chinese patients and government payers,' said Tony Ren, head of Asia healthcare research at Macquarie Capital, in a report on July 16. '[Some will] likely turn profitable soon and no longer rely on investors for funding.' Suzhou-based Innovent Biologics, the first Chinese company to be approved to sell a drug for weight loss and diabetes, is expected to swing to a first-half net profit of 260 million yuan (US$36.4 million) from a year-earlier loss of 392.6 million yuan, according to an estimate from Zhang Jialin, Nomura's head of China healthcare research. According to a consensus estimate from Bloomberg, the company was expected to post a net profit of 472 million yuan for 2025, its first full-year profit since going public. Innovent, founded in 2011, was one of the first batch of firms to go public in 2018 under a Hong Kong listing regime that allowed drug and medical device developers with no profit or revenue to sell shares. Innovent Biologics is expected to post a first-half net profit of 260 million yuan compared with a loss of 392.6 million yuan a year earlier. Photo: Handout In the second half, Zhang estimated that Innovent would book 1 billion yuan in sales from mazdutide, a glucagon-like peptide-1 (GLP-1) weight loss drug launched in July. That would amount to a sixth of the company's total expected revenue for this year, making it a key contributor to the improved bottom line. Novo Nordisk's semaglutide, the first GLP-1 drug launched in China last year for weight loss, generated revenue of 770 million yuan in the first quarter. A researcher using a micropipette pipette in a lab. Photo: Shutterstock BeOne, a developer of oncology drugs that was established in 2010, was expected by analysts to post a net profit of US$42 million for the first half and a full-year profit of US$109.5 million. The company will announce its first-half results on August 6. Newsletter Every Saturday SCMP Global Impact By submitting, you consent to receiving marketing emails from SCMP. If you don't want these, tick here {{message}} Thanks for signing up for our newsletter! Please check your email to confirm your subscription. Follow us on Facebook to get our latest news. The company's profit growth was driven primarily by sales of its blood cancer drug zanubrutinib in the US and Europe, Zhang said. Innovent and BeOne, along with other Chinese biotech firms like Akeso, have booked billions of yuan in upfront revenue over the past few years from licensing drug candidates to multinational partners for overseas development. But despite an increase in deals in recent years, milestone payments in the drug development process were hard to predict because collaborations were often cut short due to shifting competitive considerations and regulatory hurdles, Macquarie's Ren said. For example, the US Food and Drug Administration (FDA) in March 2022 rejected an application from Eli Lilly to sell Innovent's lead oncology drug, sintilimab, to treat the most common type of lung cancer in the US, even though it was approved in China a year earlier. While the FDA recommended that an additional multi-regional clinical study be conducted, the drug has still not been approved in the US. In mid-2019, Celgene returned to BeOne the exclusive right to develop and commercialise the Chinese firm's immunotherapy drug candidate, tislelizumab, ahead of Celgene's impending acquisition by Bristol-Myers Squibb. The American drug firm already had an approved treatment in the same category. Celgene terminated the deal by paying BeOne US$150 million. In 2021, BeOne re-licensed the rights for the same drug to Switzerland's Novartis, which in 2023 returned them, citing a changing market landscape. BeOne subsequently took over the drug's development and won approvals to launch it in the European Union and the US. 'Most licensing deals, including ones from China, are small [in actual payments] and hardly affect the licensers' financial performance over the medium to long term,' Ren said.
South China Morning Post
04-08-2025
- Business
- South China Morning Post
Innovent, BeOne are poised for profits in 2025, in milestone for Chinese biotech start-ups
A pair of Hong Kong-listed mainland Chinese biotechnology firms are poised to turn a profit this year as their revenue from novel drugs finally outstrips costs related to research and development and marketing, according to analysts. Advertisement 'Chinese biotechs have matured significantly and are creating value for Chinese patients and government payers,' said Tony Ren, head of Asia healthcare research at Macquarie Capital, in a report on July 16. '[Some will] likely turn profitable soon and no longer rely on investors for funding.' Suzhou-based Innovent Biologics , the first Chinese company to be approved to sell a drug for weight loss and diabetes, is expected to swing to a first-half net profit of 260 million yuan (US$36.4 million) from a year-earlier loss of 392.6 million yuan, according to an estimate from Zhang Jialin, Nomura's head of China healthcare research. According to a consensus estimate from Bloomberg, the company was expected to post a net profit of 472 million yuan for 2025, its first full-year profit since going public. Innovent, founded in 2011, was one of the first batch of firms to go public in 2018 under a Hong Kong listing regime that allowed drug and medical device developers with no profit or revenue to sell shares. Innovent Biologics is expected to post a first-half net profit of 260 million yuan compared with a loss of 392.6 million yuan a year earlier. Photo: Handout In the second half, Zhang estimated that Innovent would book 1 billion yuan in sales from mazdutide, a glucagon-like peptide-1 (GLP-1) weight loss drug launched in July. Advertisement That would amount to a sixth of the company's total expected revenue for this year, making it a key contributor to the improved bottom line. Novo Nordisk's semaglutide, the first GLP-1 drug launched in China last year for weight loss, generated revenue of 770 million yuan in the first quarter.
The Sun
16-06-2025
- Business
- The Sun
U.S. drugmakers boost licensing deals with Chinese biotechs
U.S. drugmakers are licensing molecules from China for potential new medicines at an accelerating pace, according to new data, betting they can turn upfront payments of as little as $80 million into multibillion-dollar treatments. Through June, U.S. drugmakers have signed 14 deals potentially worth $18.3 billion to license drugs from China-based companies. That compares with just two such deals in the year-earlier period, according to data from GlobalData provided exclusively to Reuters. That increased pace is expected to continue as U.S. drugmakers look to rebuild pipelines of future products to replace $200 billion worth of medicines that will lose patent protection by the end of the decade, analysts, investors, a banker and a drug company executive told Reuters. "They are finding very high-quality assets coming out of China and at prices that are much more affordable relative to perhaps the equivalent type of product that they might find in the United States," said Mizuho analyst Graig Suvannavejh. The total cost of licensing agreements, including low upfront payments and subsequent larger payouts, averaged $84.8 billion in the U.S., compared with $31.3 billion in China over the past five years, according to GlobalData. A licensing agreement grants a company the rights to develop, manufacture, and commercialize another company's pharmaceutical products or technologies in exchange for future target-based, or "milestone", payments while mitigating development risks. China's share of global drug development is now nearly 30%, while the U.S. share of the world's research and development has slipped 1% to about 48%, according to pharmaceutical data provider Citeline's report in March. Chinese companies have licensed experimental drugs to U.S. drugmakers that could be used for obesity, heart disease and cancer, reflecting abundant Chinese government investment in pharmaceutical and biotech research and development. While small molecules, like oral drugs, have been the most commonly licensed, there has been a notable shift toward novel treatments such as targeted cancer therapies and first-in-class medicines, Jefferies analysts said in a note in May. "Chinese biotechs are moving up the value chain by the day. They are... challenging their Western peers," said Macquarie Capital analyst Tony Ren. The growth is happening even as the U.S. and China have wrangled over tariffs and U.S. President Donald Trump pushes a made in America agenda. That has cut into traditional mergers and acquisitions, which are down 20%, with only 50 such transactions so far this year, according to data from database. Roughly a third of the assets that large pharmaceutical companies licensed in 2024 were from China, said Brian Gleason, head of biotech investment banking at Raymond James, who estimated such licensing deals would increase to between 40% and 50%. "I think it's only accelerating," Gleason said. The Trump administration is currently doing a national security investigation as it weighs if it will impose tariffs on the pharmaceutical sector. But one healthcare analyst said licensing deals should continue because the yet to be marketed products are not impacted by tariffs. "The law that gives the president the right to impose tariffs applies to goods. It explicitly excludes intellectual property," said Tim Opler, managing director in Stifel's global healthcare group. In May, Pfizer spent $1.25 billion upfront for the right to license an experimental cancer drug from China's 3SBio . That is the largest such deal this year and could be worth up to $6 billion in payments to 3SBio if the drug is successful. Regeneron Pharmaceuticals in June paid $80 million upfront in a potential $2 billion deal for an experimental obesity drug from China's Hansoh Pharmaceuticals. 'WAKEUP CALL' By licensing a drug in development, U.S. and European drugmakers get very quick access to a molecule which would take them longer and cost more to discover or design themselves, analysts say. U.S.-based drug developer Nuvation Bio bought AnHeart Therapeutics in 2024, gaining access to the China-based company's experimental cancer drug taletrectinib, which received U.S. approval last week. "We consider our presence in China not only a great avenue for R&D, but we also view it as an inside track on obtaining further assets to grow our company further and find new and better therapies to offer patients," Nuvation CEO David Hung told Reuters. What makes China attractive, said EY analyst Arda Ural, "a fraction of the cost and then multiples of time." Analysts have pointed to large drugmakers strategically securing rights to drugs at lower cost and running efficient early-stage trials in China to obtain important data, paving the way for global trials and potential earlier market entry. "It's a little bit of a wakeup call to our industry," said Chen Yu, Managing Partner at U.S.-based healthcare investment firm TCGX.
The Sun
16-06-2025
- Business
- The Sun
US pharma bets big on China to snap up potential blockbuster drugs
U.S. drugmakers are licensing molecules from China for potential new medicines at an accelerating pace, according to new data, betting they can turn upfront payments of as little as $80 million into multibillion-dollar treatments. Through June, U.S. drugmakers have signed 14 deals potentially worth $18.3 billion to license drugs from China-based companies. That compares with just two such deals in the year-earlier period, according to data from GlobalData provided exclusively to Reuters. That increased pace is expected to continue as U.S. drugmakers look to rebuild pipelines of future products to replace $200 billion worth of medicines that will lose patent protection by the end of the decade, analysts, investors, a banker and a drug company executive told Reuters. "They are finding very high-quality assets coming out of China and at prices that are much more affordable relative to perhaps the equivalent type of product that they might find in the United States," said Mizuho analyst Graig Suvannavejh. The total cost of licensing agreements, including low upfront payments and subsequent larger payouts, averaged $84.8 billion in the U.S., compared with $31.3 billion in China over the past five years, according to GlobalData. A licensing agreement grants a company the rights to develop, manufacture, and commercialize another company's pharmaceutical products or technologies in exchange for future target-based, or "milestone", payments while mitigating development risks. China's share of global drug development is now nearly 30%, while the U.S. share of the world's research and development has slipped 1% to about 48%, according to pharmaceutical data provider Citeline's report in March. Chinese companies have licensed experimental drugs to U.S. drugmakers that could be used for obesity, heart disease and cancer, reflecting abundant Chinese government investment in pharmaceutical and biotech research and development. While small molecules, like oral drugs, have been the most commonly licensed, there has been a notable shift toward novel treatments such as targeted cancer therapies and first-in-class medicines, Jefferies analysts said in a note in May. "Chinese biotechs are moving up the value chain by the day. They are... challenging their Western peers," said Macquarie Capital analyst Tony Ren. The growth is happening even as the U.S. and China have wrangled over tariffs and U.S. President Donald Trump pushes a made in America agenda. That has cut into traditional mergers and acquisitions, which are down 20%, with only 50 such transactions so far this year, according to data from database. Roughly a third of the assets that large pharmaceutical companies licensed in 2024 were from China, said Brian Gleason, head of biotech investment banking at Raymond James, who estimated such licensing deals would increase to between 40% and 50%. "I think it's only accelerating," Gleason said. The Trump administration is currently doing a national security investigation as it weighs if it will impose tariffs on the pharmaceutical sector. But one healthcare analyst said licensing deals should continue because the yet to be marketed products are not impacted by tariffs. "The law that gives the president the right to impose tariffs applies to goods. It explicitly excludes intellectual property," said Tim Opler, managing director in Stifel's global healthcare group. In May, Pfizer spent $1.25 billion upfront for the right to license an experimental cancer drug from China's 3SBio . That is the largest such deal this year and could be worth up to $6 billion in payments to 3SBio if the drug is successful. Regeneron Pharmaceuticals in June paid $80 million upfront in a potential $2 billion deal for an experimental obesity drug from China's Hansoh Pharmaceuticals. 'WAKEUP CALL' By licensing a drug in development, U.S. and European drugmakers get very quick access to a molecule which would take them longer and cost more to discover or design themselves, analysts say. U.S.-based drug developer Nuvation Bio bought AnHeart Therapeutics in 2024, gaining access to the China-based company's experimental cancer drug taletrectinib, which received U.S. approval last week. "We consider our presence in China not only a great avenue for R&D, but we also view it as an inside track on obtaining further assets to grow our company further and find new and better therapies to offer patients," Nuvation CEO David Hung told Reuters. What makes China attractive, said EY analyst Arda Ural, "a fraction of the cost and then multiples of time." Analysts have pointed to large drugmakers strategically securing rights to drugs at lower cost and running efficient early-stage trials in China to obtain important data, paving the way for global trials and potential earlier market entry. "It's a little bit of a wakeup call to our industry," said Chen Yu, Managing Partner at U.S.-based healthcare investment firm TCGX.
