<div id="readability-page-1" class="page">Investors in mainland China raised their stakes in Hong Kong-listed drug makers through the cross-border trading link over the past week, as a wave of out-licensing deals between the country’s pharmaceutical firms and global partners rolls on. The Hang Seng Southbound Connect Hong Kong Innovative Drug Index, which tracks around 40 of the largest Hong Kong-listed Chinese drug manufacturers, biotech researchers and AI-driven drug developers by market capitalisation, rose about 9 per cent between February 2 and Tuesday morning. The southbound Stock Connect mechanism, introduced in 2014, allows qualified investors on the mainland to buy eligible shares listed in Hong Kong. CSPC Pharmaceutical Group led the pack on Tuesday morning with a 6.7 per cent gain, followed by Sichuan Kelun-Biotech, with a 5.9 per cent rise. WuXi Biologics, Innovent Biologics and Keymed Biosciences advanced 5.8 per cent, 5.6 per cent and 4.9 per cent, respectively. Keymed Biosciences’ cancer drug CM336 was granted fast track designation by the US Food and Drug Administration in late January, allowing the firm to speed up the new medicine’s approval process. Innovent’s gain came after the Suzhou-based developer of oncology and autoimmune therapies on Sunday announced a deal worth up to US$8.85 billion with US firm Eli Lilly to collaborate on new medicines. A Hong Kong stock exchange filing showed that Innovent stood to receive a US$350 million upfront payment, plus development, regulatory and commercial milestone payments totalling about US$8.5 billion. Unlike a one-off licensing deal, where a company is paid for granting rights to its drug, Innovent will shepherd the drugs developed under the deal through phase two clinical trials in China. Meanwhile, Eli Lilly secures an exclusive licence to develop and commercialise the medicines in markets outside China, with Innovent receiving tiered royalties. “This strategic collaboration moves beyond traditional licensing to create a seamless, end-to-end innovation ecosystem that combines Innovent’s agile discovery and early-stage development engine with Lilly’s extensive global scale and creates a highly efficient model for cross-border synergy,” said Michael Yu Dechao, chairman of Innovent, in a statement.  “The company that originally develops the drug has a much clearer understanding of the technology,” said Celia Deng, Asia president at consultancy SAI MedPartners. “If the seller stays involved in the drug development, the chances of clinical trial success are much higher.” Chinese novel drug makers are having more say in how their new medicines are developed with global partners. In a deal on February 5, a unit of Shanghai Fosun Pharmaceutical granted Japan’s Eisai co-exclusive rights to develop and manufacture serplulimab – a monoclonal antibody used for the treatment of cancers – in Japan. Henlius, a subsidiary of Fosun Pharma, will receive up to US$1.55 billion in upfront and milestone payments. Global pharmaceutical giants are scrambling to replace revenue as patents on blockbuster drugs that generate at least US$1 billion in annual revenue start to expire before 2030. At the moment, around 30 per cent of candidate drugs worldwide originate in China, said Marc Horn, president of Merck China, at the Asian Financial Forum on January 27.</div>

<p>Mainland Chinese investors have increased their investments in Hong Kong-listed drug stocks, with the Hang Seng Southbound Connect Hong Kong Innovative Drug Index rising about 9% recently. CSPC Pharmaceutical Group and Sichuan Kelun-Biotech saw significant gains. Innovent Biologics announced a major collaboration with Eli Lilly worth up to $8.85 billion, enhancing its drug development process. This trend reflects a shift in how Chinese drug makers engage with global partners, as they gain more control over the development of their medicines amid a competitive pharmaceutical landscape.</p>

南华早报

KELUN PHARMA

SKB BIO-B

CSPC PHARMA

Eli Lilly

INNOVENT BIO

E Fund Hang Seng SCHK Innovative Drug ETF

Huatai-PB Hang Seng Innovative Drugs Industry ETF(QDII)

ICBCCS SSE STAR Biology and Medicine ETF

iShares US Pharma

Yinhua CSI Innovative Drugs Industry ETF

Penghua CSI HK Connect Health Care Composite ETF

Penghua SSE STAR Biology and Medicine ETF

ChinaAMC CSI Biotechnology Theme ETF

Huaan Hang Seng Biotech ETF

China Southern Hang Seng Biotech ETF(QDII)

GF CSI HK Innovative Drugs Industry ETF(QDII)

Guotai CSI Hugangshen Innovative Drugs Industry ETF

Hwabao WP Hang Seng SCHK Innovative Drug Select ETF

Tibet Dongcai CSI Hugangshen Innovative Drugs Industry ETF

E Fund CSI Biotechnology Theme ETF

China Universal CNI HK Connect Innovative Drugs Industry ETF

Ping An CSI Medicine and Medical Device Innovation ETF

Bosera Hang Seng Health Care ETF(QDII)

ICBCCS CNI HK Connect Innovative Drugs ETF

Guotai SSE STAR Brand Name Drug ETF

ChinaAMC Hang Seng Biotechnology Technology ETF(QDII)

Tianhong CNI BIOMEDICINE ETF

China Merchants CSI Biotechnology Theme ETF

E Fund CSI 300 Health Care ETF

Founder Fubon CSI Medicine and Medical Device Innovation ETF

Fullgoal Hang Seng SCHK Innovative Drug & Healthcare ETF

Guotai CSI Bio-medicine ETF

Yinhua CNI HK Connect Innovative Drugs ETF

ChinaAMC SSE STAR Biology and Medicine ETF

ChinaAMC SSE Health Care ETF Initiating Fund

Hwabao WP CSI Pharmaceuticals ETF

Bosera Hang Seng SCHK Innovative Drug Select ETF

Mainland China’s investors pour into Hong Kong-listed drug stocks