China's biotech sector is on a tear. The Hang Seng Biotech Index has climbed over 60% since January—handily beating China tech's AI-fueled rally—thanks to a wave of billion-dollar licensing deals and red-hot IPOs. Pfizer said last month it will pay up to $1.25 billion to license an experimental cancer drug from 3SBio (TRSBF, Financial) and invest another $100 million in the firm's stock. Just weeks later, Bristol-Myers Squibb inked a deal worth up to $11.5 billion for a cancer therapy originally licensed by Germany's BioNTech from China's Biotheus. Those two deals alone have ignited a frenzy. 3SBio shares have soared 283% year-to-date. RemeGen, another licensing contender, is up 270% as of June.
Investors aren't just chasing deals—they're also buying into the IPO pipeline. Duality Biotherapeutics, which focuses on cancer immunotherapies, more than doubled on its first day of trading in April and has since gained 189%. Jiangsu Hengrui, China's biggest drugmaker by market value, surged 25% on debut in May. Even more striking? The pace of dealmaking. M&A involving Chinese biotech firms hit $36.9 billion in Q1—more than half of global totals. “Chinese biotech is having its own DeepSeek moment,” said Dong Chen, chief Asia strategist at Pictet Wealth Management, referencing the AI boom that fueled Chinese tech earlier this year.
Still, not everyone's chasing the highs. Some healthcare-focused funds are rotating out, preferring stable compounders with steady dividends. Others see the recent mega-deals as one-offs, and aren't ready to assign premium multiples just yet. But even with macro headwinds, analysts like those at Jefferies remain optimistic. Many Chinese biotech firms already operate as partners to U.S. drugmakers, not exporters—meaning tariffs may have limited impact. And with top scientific talent returning home amid geopolitical tensions, R&D momentum could accelerate. In short: China's biotech surge might still be in the early innings.
