Chinese biopharma stocks jump as U.S. weighs keeping door open to drug deals

• Major Chinese biopharma stocks jumped sharply, with Akeso and BeiGene up 8%, Innovent rising 6%, and the Hang Seng Biotech Index gaining over 5%
• China completed a record 81 out-licensing deals worth a combined $110 billion in the first half of 2026, with almost half of U.S. overseas drug licensing deals in 2025 involving Chinese firms
• The proposed U.S. rules would exclude investments in drugs related to pathogens or weaponizable biotechnology, but allow licensing of most other pharmaceutical products from Chinese companies

Summary

Chinese biopharma stocks surged Monday following reports that the U.S. Treasury Department may permit American pharmaceutical companies to continue licensing most drugs from Chinese firms. Innovent Biologics jumped 7%, Akeso rose 8%, and the Hang Seng Biotech Index climbed over 5%.

According to Reuters, draft rules would allow U.S. investment in promising Chinese drug developments, excluding those related to weaponizable biotechnology or pathogens. However, the rules remain subject to change. This approach would distinguish biopharma from sectors like artificial intelligence and semiconductors, where the U.S. has imposed stricter China restrictions.

Key Market Data:

• Nearly 50% of U.S. overseas drug licensing deals in 2025 were with Chinese companies (GlobalData)
• China completed 81 out-licensing deals worth $110 billion combined in H1 2026 (NMPA data via Nomura)
• Pfizer announced a partnership worth up to $10.5 billion with Innovent in May for 12 oncology programs

Market Implications:

The potential regulatory clarity removes a significant uncertainty for the sector. Nomura analysts noted investors appear "largely immune" to intermittent geopolitical concerns, citing Chinese companies' strong value proposition in novel drug development. China has prioritized pharmaceutical globalization under its 15th five-year plan, and analysts expect China-U.S. out-licensing deals to continue expanding.

This development suggests biopharma may remain a cooperative area between the two nations despite broader technology tensions, benefiting both Chinese biotech innovators and U.S. pharmaceutical companies seeking access to promising drug candidates.