HONG KONG: China’s biotechnology sector has staged a remarkable comeback in 2025, emerging as one of the top-performing asset classes in Asia. The Hang Seng Biotech Index has advanced more than 60% since January, a surge that outpaces the 17% gain in China’s technology stocks — a rally previously driven by enthusiasm over DeepSeek’s artificial intelligence breakthrough.
The sharp rebound in biotech equities has been fuelled by a wave of billion-dollar licensing agreements with foreign pharmaceutical giants, reinforcing China’s position as a growing hub for global drug innovation.
Investor confidence has been buoyed by major deals, including Pfizer Inc’s agreement to pay US$1.25 billion to license an experimental cancer drug from China’s 3SBio Inc, alongside a US$100 million equity investment in the company. This was followed by Bristol-Myers Squibb Co’s announcement to pay up to US$11.5 billion to license a cancer therapy originally developed by China’s Biotheus Inc and sublicensed by Germany’s BioNTech SE.
Notably, 3SBio’s stock has soared 283%, outperforming the Bloomberg global biotech benchmark, while RemeGen Co has risen over 270% amid interest from multinational pharmaceutical firms for potential licensing deals.
“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 LLC. “The science is real, the economics are compelling, and the pipeline is starting to deliver.”
The sector’s resurgence is further supported by a substantial uptick in mergers and acquisitions. In the first quarter of 2025, deal value involving Chinese biotech firms reached US$36.9 billion, double the figure recorded a year earlier. That volume represented over half of the US$67.5 billion in global deal activity in the industry during the same period.
According to Dong Chen, chief Asia strategist at Pictet Wealth Management, “Chinese biotech companies are having their own DeepSeek moment.” He added that the sector likely has further upside potential.
While trade tensions between the US and China have posed headwinds for many mainland companies, the biotech sector appears to be benefiting from a reverse brain drain, with top talent returning to China and enhancing domestic research capabilities. Nicholas Chui, Chinese equity fund manager at Franklin Templeton, notes this dynamic is strengthening local innovation pipelines.
Jefferies remains optimistic, stating that the escalation in US tariffs is unlikely to hinder the progress of China’s biotech firms, whose international relevance continues to grow through strategic deal-making and compelling drug pipelines.
-Bloomberg
