Sino Biopharma’s M&A move pays off with big licensing deal

The Chinese drugmaker stands to gain more than $7 billion from a partnership with Germany’s Boehringer if its therapies can deliver clinical and commercial results

Key Takeaways:

• Most of the early-stage cancer drugs covered by the out-licensing deal were initiated by a Chinese biotech that Sino Biopharma acquired last year
• Novel drugs have become a major revenue driver for the firm, which logged more than $140 million in out-licensing income in the first half

By Molly Wen

Chinese drug developers routinely sell rights to their discoveries to multinational pharmaceutical giants. It is less common for a Chinese firm to buy a maker of innovative drugs and then package the acquired programs into an out-licensing deal.

The latest partnership announced by Sino Biopharmaceutical Ltd. (1177.HK) offers one such example. The company announced on Nov. 4 it had struck a deal with Germany’s Boehringer Ingelheim covering preclinical oncology programs for antibody-drug conjugates (ADCs) and T-cell engagers (TcEs).

Five of the six drug programs cited in the agreement were developed by a Chinese biotech that Sino Biopharma acquired last year.

The deal gives Sino Biopharma $358 million in upfront and near-term payments and offers scope for up to $7 billion in option-related and milestone income. If any products reach the market, the company will also receive tiered royalties at rates of up to double digits.

Shares in Sino Biopharma had already benefited from overall gains in the pharmaceutical sector before the announcement, closing 5.42% higher on Nov. 4. The stock jumped another 9.22% the next day to close at HK$5.63, lifting the company’s market value to about HK$105.1 billion ($13.4 billion).

This licensing deal marks the second oncology collaboration between the Chinese and German partners. Two years ago, Sino Biopharma agreed to help develop and commercialize several Boehringer Ingelheim cancer drugs in mainland China, acting as the licensee in that arrangement. This time around it is the licensor, leading development of the six programs through global Phase One clinical trials. If agreed clinical milestones are reached, Boehringer Ingelheim can exercise its option to acquire international rights to four of the programs, excluding mainland China, Hong Kong and Macao, and worldwide rights to the other two pipelines.

With potential payments reaching $7.36 billion, the partnership ranks among the biggest overseas licensing deals for innovative drugs developed in China.

Five of the drug programs in question were developed by Chinese biotech LaNova Medicines, which became a wholly owned subsidiary of Sino Biopharma in a deal announced in July 2025. Sino Biopharma, then a minority stakeholder, said it would buy the remaining 95.09% of LaNova for up to $951 million. After deducting around $450 million in cash and bank deposits held by LaNova, the net amount payable was about $501 million. If the investment yields clinical results and commercial success, Sino Biopharma stands to make a sizeable gain, based on the gap between the acquisition cost and the potential licensing proceeds.

LaNova had already signed out-licensing agreements with big global names before control passed to Sino Biopharma. In 2023 it licensed global rights to LM-305, an ADC targeting the protein GPRC5D, to AstraZeneca in a deal potentially worth $600 million. A year later Merck bought global rights to LaNova’s LM-299, a PD-1/VEGF bispecific antibody, with an upfront payment of $588 million. Completion of the technology transfer in 2025 triggered a further $300 million milestone payment.

But although the Boehringer deal could exceed $7 billion, the upfront and near-term sum of $358 million represents only about 5% of the headline figure. The low ratio may reflect the drug candidates’ early stage of development, as all six programs are preclinical. Neither party disclosed details of specific targets or oncology indications for the drugs covered by the partnership.

Under the agreement, Sino Biopharma will handle the drug candidates through to the end of Phase One trials. If agreed milestones are reached, Boehringer Ingelheim can use the early clinical data to decide whether to exercise its development option.

Deals gather pace

Sino Biopharma has made progress in out-licensing innovative drugs this year. A deal was announced in March with France’s Sanofi for rovadicitinib, a myelofibrosis treatment already approved in China, with an upfront payment of $135 million. In July overseas rights to the drug candidate TQC3721 for chronic obstructive pulmonary disease were licensed to AstraZeneca for a $200 million upfront sum.

Novel drugs have become a major growth driver for Sino Biopharma, which reported a 10.6% rise in revenue to 19.44 billion yuan ($2.91 billion) for the first half. Revenue from innovative drugs reached 7.81 billion yuan in the period, while out-licensing revenue totaled 980 million yuan. Together, the two accounted for about 45% of total revenue. However, profit grew at a much slower pace, rising just 1.4% to 3.43 billion yuan.

After the spate of out-licensing deals, the timing of revenue recognition will be an earnings factor going forward. Sino Biopharma Executive Director and Chairwoman Theresa Tse told a conference call that most of the initial Boehringer payment would be booked in 2027, with a small portion potentially deferred until the first quarter of 2028.

Sino Biopharma currently trades at a price-to-earnings ratio of about 37, slightly above the 33 for Hengrui Pharma (1276.HK). In assessing long-term earnings prospects, investors will want to see whether sales of existing innovative drugs can deliver sustained profit growth and whether the newly licensed programs advance smoothly into later clinical stages.

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