Hengrui Medicine (600276.SH) this year's innovative drugsGoing overseas may break the record - today it announced that Ruikang Trastuzumab has been exported to an Indian multinational pharmaceutical company, with the total BD transaction amount exceeding US$1 billion. This is Hengrui Medicine 's fifth BD transaction this year, and the cumulative down payment for BD transactions reached this year has exceeded US$800 million.

Hengrui Medicine announced today that it has signed a licensing agreement with Glenmark Specialty SA, a subsidiary of India's Glenmark Pharmaceuticals (hereinafter referred to as GP), to license the development and commercialization rights of its independently developed antibody-drug conjugate (ADC) Ruikang Trastuzumab (SHR-A1811) project to the other party on a paid basis. The authorized area is the global market except Greater China, the United States, Canada, Europe, Japan, Russia and Central Asia.

Under the agreement, Hengrui will receive an upfront payment of US$18 million and will be eligible to receive registration and sales milestone payments of up to US$1.093 billion, as well as corresponding sales commissions.

Ruikang Trastuzumab is a representative product in Hengrui's ADC R&D pipeline in recent years. In May of this year, the product was approved for marketing in China for the treatment of patients with locally advanced or metastatic non-small cell lung cancer with HER2 mutations, becoming the first domestically developed ADC product for this indication.

Since then, the drug has rapidly advanced in multiple clinical studies for gastric cancer, breast cancer, and other indications, and has received orphan drug designation from the FDA and priority review from the National Medical Products Administration (NMPA). Nine indications have been included in the Breakthrough Therapy Designation list. This collaboration with GP is viewed by the industry as a significant step forward in Hengrui's global ADC strategy.

GP is a multinational pharmaceutical company operating in over 80 countries worldwide, encompassing innovative , generic, and over-the-counter (OTC) pharmaceuticals, with a focus on respiratory, dermatology, and oncology treatments. GP operates 11 world-class manufacturing facilities across four continents, serving over 80 countries. According to the Scrip100 ranking, GP is expected to rank among the top 100 biopharmaceutical companies in terms of pharmaceutical sales in 2023.

Hengrui said that the transaction will further expand its overseas market coverage and ensure the smooth progress of the project globally through the joint development and commercialization committee mechanism.

Since the beginning of this year, Hengrui MedicineThe frequency of BD transactions has increased significantly. In March, the company and MerckA collaboration was reached on the Lp(a) inhibitor HRS-5346, with a total value of up to US$1.97 billion, including a US$200 million upfront payment, and the oral GnRHReceptor antagonist SHR7280 (indications include medical assisted reproductiveand gynecology fields) in mainland China and the right of priority negotiation in areas outside the authorized area was granted to Merck of Germany, with a down payment of 15 million euros and the right to receive certain milestone payments after the product is approved and a double-digit percentage of sales commission; in July, it signed a combination licensing agreement with GSK covering 11 early-stage projects for a total amount of up to US$12.5 billion, including a down payment of US$500 million; at the beginning of September, Hengrui just announced that it would license the cardiac myosin small molecule inhibitor HRS-1893 to Braveheart Bio of the United States through the NewCo model, with the highest transaction amount of US$1.088 billion and a down payment of US$75 million.

Including today's cooperation with GP, Hengrui Medicine has completed five external authorizations in just nine months, with a total amount of more than US$16 billion, covering multiple therapeutic areas such as cardiovascular, metabolic, respiratory and oncology.

In the capital market, this series of BD transactions is seen as a sign that Hengrui is accelerating the realization of the value of its innovative drug pipeline. The deal disclosed today includes an $18 million down payment, while previously completed deals with Merck , Merck, and GlaxoSmithKline have combined for approximately $718 million in down payments. Combined with the $75 million down payment for HRS-1893, Hengrui Medicine's upfront payments for BD transactions this year may have exceeded $800 million.

According to the financial report, Hengrui Medicine achieved revenue of 15.761 billion yuan in the first half of the year, a year-on-year increase of 15.88%, and net profit attributable to the parent company of 4.450 billion yuan, a year-on-year increase of 29.67%. The high level of BD revenue realization provides additional certainty for Hengrui's performance growth and strengthens its ability to "commit to profits."

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