RemeGen scores out-licensing triple play with AbbVie deal

The agreement marks the drug maker’s third such transaction since last year, setting records for both its largest upfront payment and highest total deal value

Key Takeaways:

• PD-1/VEGF bispecific antibodies like RemeGen’s RC148 have become a hot commodity among multinational drug companies, with strong potential in cancer immunotherapy
• By partnering with AbbVie in its latest out-licensing deal, RemeGen significantly strengthens its entry into the global marketplace

By Molly Wen

After scoring a record $130 billion in out-licensing deals last year, China’s bustling biotech sector has kicked off the New Year with another strong start. In the latest such blockbuster deal, RemeGen Co. Ltd. (688331.SH; 9995.HK) last week announced its signing of an exclusive licensing agreement with U.S. giant AbbVie (ABBV.US) for RC148, its PD-1/VEGF-targeting bispecific antibody drug. The deal was notable for its eye-popping figures, including a $650 million upfront payment and total value of up to $5.6 billion.

The announcement provided a shot in the arm to RemeGen’s stock, which opened 15% higher and closed up by its daily limit the next day in Shanghai on heavy trading. It Hong Kong-listed shares performed similarly, rising nearly 15% intraday before closing up 7.9%. Those gains added to a rally that has lifted RemeGen’s shares by about 25% since the start of the year.

The collaboration marks RemeGen’s third such deal since 2025, setting new records for both its largest upfront payment and highest total deal value. Under the agreement, AbbVie will obtain exclusive rights to develop, manufacture, and commercialize RC148 outside Greater China. RemeGen will receive $650 million up front, and will be eligible for up to $4.95 billion in development, regulatory and commercial milestone payments, as well as tiered double-digit royalties on net sales outside Greater China.

RC148 is a novel PD-1/VEGF-targeting bispecific antibody drug designed to simultaneously block the PD-1 immune checkpoint pathway and VEGF-driven angiogenesis signaling. By inhibiting PD-1, the drug restores the cytotoxic function of immune T cells, while suppression of VEGF helps control abnormal tumor vascularization, thereby inhibiting tumor growth and metastasis. PD-1/VEGF bispecific antibody drugs have become hot property among multinational pharmaceutical companies, and are widely viewed as a potential next-generation upgrade to PD-1 inhibitors in cancer immunotherapy. Last May, 3SBio (1530.HK) also entered into a similar collaboration with Pfizer (PFE.US) for a drug targeting the same pathway, with a total deal value of $6 billion.

RemeGen is currently conducting clinical studies in China evaluating RC148 as both a monotherapy and in combination with other treatments for patients with various advanced malignant solid tumors. Phase I/II clinical data released last month showed RC148 monotherapy achieved an objective response rate (ORR) of 61.9% in patients with PD-L1–positive advanced non-small cell lung cancer.

In combination with Sanofi-Aventis’ Docetaxel, the ORR in previously treated patients reached as high as 66.7%, showing a trend toward superior results compared with Akeso’s (9926.HK) similar Ivonescimab, with an ORR of 40%. AbbVie has also indicated that RC148 could potentially be used in combination with its own investigational drug Temab-A, a c-MET-targeting antibody drug conjugate (ADC) for the treatment of solid tumors such as non-small-cell lung and colorectal cancers.

Highly leveraged

RemeGen remains unprofitable despite its series of high-profile out-licensing deals, many of which will only start producing recurring revenue later. That means its financial position will remain a key focal point for investors for the time being.

In the first three quarters of last year, the company recorded operating revenue of about 1.72 billion yuan ($247 million), up 42.27% year-on-year, including a record 620 million yuan in the third quarter alone. The strong increase was driven primarily by growing sales for its autoimmune drug Telitacicept, whose gains could accelerate if it gets pending approvals for new indications such as Sjögren’s syndrome and IgA nephropathy.

At the same time, the company has effectively controlled its R&D spending, tackling a major issue that often keeps drug developers in the red even after their products get approved. Its R&D spending totaled 890 million yuan in the first three quarters of last year, down 22.8% year- on-year. RemeGen continued to bleed red ink despite those improvements. It lost 551 million yuan in the first nine months of last year, though that marked a significant improvement from its 1.07 billion yuan loss a year earlier.

From a balance sheet perspective, the company looks relatively healthy, though slightly debt heavy, for now. It held 1.07 billion yuan in cash at the end of September, up from the end of 2024, mainly thanks to funds raised from a share placement in Hong Kong last May. But its debt-to-asset ratio remains elevated at 61.18%, including short-term borrowings of 1.07 billion yuan and 390 million yuan in non-current liabilities due within one year, indicating ongoing short-term repayment pressure.

The AbbVie collaboration will not only provide RemeGen with a substantial upfront payment, significantly strengthening its cash position, but also enhances the global prospects for RC148 by providing the far deeper resources of a multinational pharmaceutical leader. Compared with RemeGen’s June 2025 transaction with Vor Bio (VOR.US), which failed to excite investors, the AbbVie deal stands out for its upfront payment size, partner quality, and long-term upside potential.

Despite its recent stock gains, RemeGen’s valuation still looks relatively depressed with a price-to-sales (P/S) ratio of 21. That’s well below the 35 times for rival Akeso, suggesting room for further valuation upside. A continued flow of milestone payments from its recent out-licensing deals could meaningfully improve RemeGen’s prospects as those tie-ups move ahead, providing additional valuation upside and warranting continued investor attention.

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