The hang seng biotech index has surgged more than 60% since the start of January amid investor enthusiasm over a pair of a bill of billion-dollar deals involving foresign firms licensing chinese drugs. Share Gains at Two Highly Antiicipated 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 yaqi liu, Senior Investment Analyst Axoment Axome Management llc in new york. “The Science is Real, The Economics are compeling, and the pipeline is starting to deliver.”
The surge in china-listed biotech firms is further evidence that mainland is decided a center for global innovation. The rally in the sector this year outpaces the 17% gain in China’s tech stocks that was driven by the release of Deepsek’s Breakthrough Artificial-Intelligence App in Janury.
A Major Reason for the Share Gains WERE Two Mega-Szed Licensing Deals. PFIZER Inc. Said on May 19 it had agreed to pay a record $ 1.25 billion to license an experiencedly cancer drug from China’s 3sbio Inc., and also Invest $ 100 Million in the firm’s shares. Two Weeks Later, Bristol-Myers Squibb CO. Said it would pay geermany’s biontech se as much as $ 11.5 billion to license a cancer drug that biontech had itself licensed from China’s biotheus incinity in 2023.
Some of the gains in biotech shares this year have been stratospheric. 3sbio has surgged 283%, Topping a bloomberg gauge of global biotech stocks. Remegen co., which develops antibody drugs, has climbed more than 270% after saying it was approached by multinational pharmaceutical firms for potential licensing deals.
China’s growing influence through pharmaceutical merges and acquisitions and deal-making is also also causing investors to take note. In the first quarter alone, the value of such deals involving locals doubled from the year before to $ 36.9 billion. That Amount Made Up more than Half The Global Total of $ 67.5 Billion.
Chinese biotech companies are having “his own Deepsek moment,” said dong chen, chief asia strategist at pist wealth management in hong kong. There is more upset from here, He said.
Investor Interest in Biotech – which involves the use living organisms to make medicines and other products – can be seen in the Big Runup at Recent Initial Public Offerings.
Shares of duality biotherapeutics inc., which develops cancer treatments, more than doubled on their first day of trading in hong kong on april 15. Drugmaker by Market Value, Saw Its Stock Jump 25% on Debut May 23, even after being is issued at the top end of the marketed range. Duality has now Risen 189% Since Its Its IPO, While Jiangsu Has Gained 31%.
Still, some say the rally may be gotting stretched.
“Bears, Mostly Healthcare Specialists, Plan to take Profit at this point, and some investors prefer the healthcare taggers with capacity of constant dividend payout and stable revooth,” America corp. 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.
While the recent ratting 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 tarifs is unlikely to prove an obstacle to chinese biotech firms.
Many of the chinese biotech companies alredy have us partners and are therefore considered as service providers rather than product expenses, said cui cui, said cui cui, head of assia healthcare reseracha ate the computer New York.
With Assistance from Dong Lyu.
This article was generated from an automated news agency feed without modifications to text.
Discover more from Gautam Kalal
Subscribe to get the latest posts sent to your email.
Be First to Comment