---
title: "While eating the freshly bought duck neck, I suddenly understood the 'secret' of Yingen Biotech"
type: "Topics"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/topics/35715046.md"
description: "After seeing the news that Duality Biologics plans to return to the A-share market, a question mark has been lingering in my mind: Why is a company, which just went public on the Hong Kong stock market half a year ago, in such a hurry to seek financing? Especially when Duality Biologics still has 3.7 billion yuan in cash on its books, and even managed to turn a profit in the first half of the year purely from operations. Thinking is the most time-consuming thing, and the autumn nights in Beijing are noticeably getting earlier. After a whole day of pondering without finding an answer, I decided to go downstairs for dinner. Amid the bustling night scene, I spotted a &#34;XX Duck&#34; restaurant about to close..."
datetime: "2025-10-29T03:37:05.000Z"
locales:
  - [en](https://longbridge.com/en/topics/35715046.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/35715046.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/35715046.md)
author: "[锦缎研究院](https://longbridge.com/zh-HK/profiles/2576456.md)"
---

> 支持的語言: [English](https://longbridge.com/en/topics/35715046.md) | [简体中文](https://longbridge.com/zh-CN/topics/35715046.md)


# While eating the freshly bought duck neck, I suddenly understood the 'secret' of Yingen Biotech

After seeing the news that InnoBio plans to return to the A-share market for listing, a question mark has been lingering in my mind: **For a "recently listed stock" that has only been listed on the Hong Kong stock market for half a year, why is InnoBio so eager to seek financing?** Especially considering that InnoBio still has 3.7 billion yuan in cash on its books, and even from an operational perspective, InnoBio was profitable in the first half of the year.

Thinking is the most time-consuming thing, and the days in autumn in Beijing are noticeably shorter. After a whole day of thinking without finding an answer, I decided to go downstairs for dinner. Amid the bustling night scene, I saw a "XX Duck" store that was about to close, with a sign that read "Global Store No. 8XX." It's amazing that a store selling duck necks could have so many branches. Thinking of this, I felt a surge of admiration and spent 28 yuan to buy half a pound of spicy duck necks. Fortunately, the owner even gave me a duck head for free.

While eating the freshly bought duck necks, I reopened InnoBio's prospectus. Under the spicy stimulation on my tongue, my thoughts became surprisingly smooth, and I quickly accelerated the scrolling of the mouse wheel. The logical loop gradually became clear.

# **01**

# **Core Metric: Operational Speed**

InnoBio was founded in July 2019, making it just six years old. Yet, this startup pharmaceutical company has set a record for continuous BD (business development) in its pipeline. How did it achieve this? **The key lies in the word "speed."**

Take the B7-H3 target as an example. InnoBio only began preclinical development in May 2021 and obtained the patent rights for the B7-H3 antibody from a subsidiary of WuXi Biologics in May 2022, bringing the target's development into a substantive stage. Surprisingly, before the preclinical research was even completed, InnoBio successfully licensed the B7-H3 target ADC drug DB-1311 to BioNTech.

Figure: DB-1311 Development Timeline, Source: Company Announcement

In other words, InnoBio's B7-H3 ADC drug DB-1311 was independently developed for only two years, and it was still in the lowest-cost preclinical stage. After entering the clinical stage, all overseas R&D expenses were borne by BioNTech, while InnoBio could receive subsequent milestone payments and sales royalties, and even had the option to share in the U.S. market.

If we ignore the construction cost of the DITAC (topoisomerase I inhibitor) platform and only consider the actual procurement perspective, InnoBio's upfront payment for the B7-H3 antibody was $12 million, with subsequent milestone payments totaling $96.2 million (which could also be used for bispecific antibody development). In return, InnoBio received an upfront payment of $170 million and milestone payments of $1.5 billion (including DB-1303). A simple calculation shows the profit InnoBio made from this.

For InnoBio, there is no need to consider the subsequent R&D situation. Even if the pipeline fails, it won't lose money because it has already recouped its costs and even made excess profits during the BD process.

**By conducting preclinical development first, then procuring targets, and quickly licensing them to external companies, this business model effectively shortens the lengthy monetization cycle of innovative drugs to the preclinical stage.** Based on this model, InnoBio has replicated it to more targets like B7-H4 and HER3 beyond B7-H3.

Figure: InnoBio's Target Procurement Overview, Source: Jinduan Research Institute

Thinking of this, I looked at the duck necks on the table. Isn't InnoBio's logic exactly the same? "XX Duck" sells duck necks, but its core competitiveness is actually the R&D of marinades and brine. It procures duck necks, processes them into marinated duck necks, and sells them in stores. "XX Duck" doesn't need to be responsible to franchisees, just like InnoBio doesn't need to be responsible for subsequent R&D.

This model, combined with a high-speed BD cycle, will undoubtedly significantly improve capital operational efficiency. It's safe to say that InnoBio is all about speed.

# **02**

# **Why Are External Pharmaceutical Companies Willing to Pay?**

After discussing InnoBio, let's look at the other side of the transactions.

As mentioned earlier, most BD deals between external pharmaceutical companies and InnoBio occur in the early clinical stages, and the BD deal for DB-1311 even happened during the preclinical research phase. Investors familiar with the innovative drug industry know that the earlier the pipeline, the higher the uncertainty, and InnoBio's licensed pipelines are no exception.

Figure: Overview of InnoBio's BD Transactions, Source: Jinduan Research Institute

Given the high uncertainty, why are so many external pharmaceutical companies still willing to procure InnoBio's pipelines? There are roughly two reasons behind this.

**First, external pharmaceutical companies aim to quickly expand their pipeline portfolios into new areas through BD deals.** For example, BioNTech, which has partnered with InnoBio multiple times, is a vaccine company with mRNA as its core technology. Its most famous product is the COVID-19 vaccine Comirnaty, developed in collaboration with Pfizer.

Having made a fortune from vaccines, BioNTech clearly wants to pivot into oncology. In addition to focusing on cancer vaccines, BioNTech has expanded through capital acquisitions: In November 2024, it acquired China's Primus for $800 million and signed BD deals with domestic pharmaceutical companies like OncoImmune, InnoBio, and Yilian Bio.

Another company that signed a BD deal with InnoBio, Avenzo, is a U.S. biotech in the Series B financing stage, also eager to expand its pipeline. In addition to the BD deal with InnoBio, it also signed a BD deal with Anrui Bio for the CDK2 drug ARTS-021.

**Second, InnoBio's upfront payments are not high, mostly in the tens of millions of dollars, which is not a heavy burden for external pharmaceutical companies.** After BD-ing InnoBio's pipelines, external companies have ample time to decide whether to further advance R&D.

Combining these two reasons, it's not hard for investors to see the logic behind external pharmaceutical companies' collaboration with InnoBio: It's a low-cost technical positioning. Without the need for upfront investment in basic platform resources, external companies can still lay out cutting-edge technologies or targets, significantly reducing R&D risks.

But from another perspective, this is a mixed blessing for InnoBio. Low-cost technical positioning enhances external companies' willingness to collaborate, but the amount of resources they ultimately invest is beyond InnoBio's control.

In the commercial battlefield where success is measured by results, InnoBio's ability to "sell" its pipelines is undoubtedly successful. But this success is relative, and investors should not overestimate its potential.

# **03**

# **The Plot Behind Returning to A-Shares**

InnoBio's success is actually a victory of differentiated business models. Its uniqueness lies in its ability to **shorten the traditionally long-cycle business model of innovative drugs.**

Based on the DITAC R&D platform, InnoBio has achieved continuous BD deals, licensing the most capital-intensive global late-stage clinical research to external companies while turning a profit in the process. It focuses on early-stage and domestic clinical research.

The "double ten rule" in traditional innovative drug R&D doesn't apply to InnoBio. By relying on high-frequency BD operations to rapidly expand its pipeline, investors can see InnoBio's outstanding performance and stock price. But on the flip side, licensing out global market rights also lowers InnoBio's ceiling.

**When evaluating InnoBio, investors need to be aware of the risks of path dependency.** After all, InnoBio's current achievements are largely based on its DITAC technology platform. While ADC technology is hot, it's not infinitely promising. Once known targets are exhausted, the space left for InnoBio will shrink, much like Bitcoin mining, where the difficulty increases significantly in later stages.

Based on this logic, InnoBio must explore more technology platforms beyond DITAC, which could require substantial funding. This is similar to how many duck neck brands rely on "spicy flavor" as a hit product, but diversification into "five-spice flavor," "pickled pepper flavor," etc., is key to long-term growth. At the same time, advancing domestic pipelines also requires significant capital, another major cost for InnoBio.

**Therefore, the underlying motive behind announcing its return to A-shares is:** To capitalize on the current high recognition of traditional ADC pipelines in the market, attract more investor attention, and secure higher financing.

For InnoBio's value to grow further, it needs validation from more technology platforms. For example, the EGFR/HER3 bispecific ADC drug DB-1418, licensed out in January this year, marks the breakthrough of the DIBAC platform (bispecific ADC technology). However, it's still too early to declare the DIBAC platform a success, as more pipelines and BD deals are needed for validation.

After this train of thought, I decided to try other flavors of "XX Duck" tomorrow.

This article is based on publicly available information and is for informational purposes only. It does not constitute any investment advice.

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## 評論 (1)

- **叶轻眉 · 2025-11-06T13:21:40.000Z**: AI wrote...
