Hengrui Medicine's Global Oncology Gambit: Licensing Deals and Revenue Diversification in a Fragmented Market

In a strategic move to solidify its position as a global oncology innovator, Jiangsu Hengrui Medicine has inked a landmark licensing deal with Glenmark Specialty S.A., granting the Indian pharmaceutical giant exclusive rights to commercialize Trastuzumab Rezetecan (SHR-A1811) in most regions outside the US, Canada, Europe, Japan, and China. The deal, valued at up to $1.111 billion in upfront and milestone payments, underscores Hengrui's aggressive push to diversify revenue streams and expand its footprint in underserved marketsGlenmark inks exclusive licensing pact with Hengrui for next-gen cancer drug^[1]. This partnership, coupled with a robust pipeline and a history of high-profile licensing agreements, positions Hengrui as a formidable player in the global oncology landscape.

Strategic Rationale: Leveraging Glenmark's Distribution Network

Trastuzumab Rezetecan, a next-generation HER2-targeting antibody-drug conjugate (ADC), was approved in China in May 2025 for HER2-mutated non-small cell lung cancer (NSCLC) after prior therapy, marking a milestone as the first domestically developed ADC for this indicationHengrui Pharma and Glenmark Pharmaceuticals Enter Exclusive License Agreement^[2]. The drug's Orphan Drug Designation in the USGlenmark Pharma arm enters $1.1 billion agreement with Hengrui^[3] and its ongoing trials for other cancers highlight its therapeutic potential. By licensing it to Glenmark, Hengrui gains access to a partner with a strong commercial infrastructure in emerging markets, while retaining high-margin geographies for itself. Glenmark's focus on “underserved regions” aligns with Hengrui's strategy to maximize value from its innovations without diluting its core marketsChina's Jiangsu Hengrui to grant license for cancer drug to unit of ...^[4].

The financial terms of the deal—$18 million upfront, $1.093 billion in milestones, and tiered royalties—reflect a risk-sharing model typical of modern biotech partnerships. For Hengrui, this structure ensures immediate revenue while deferring the costs of global commercialization to Glenmark. Meanwhile, Glenmark gains a differentiated asset to bolster its oncology portfolio, a sector projected to grow at 12% annually through 2030GSK Signs License Deal With Jiangsu Hengrui^[5].

A Broader Global Expansion Playbook

Hengrui's collaboration with Glenmark is not an isolated event but part of a broader strategy to internationalize its revenue base. Over the past five years, the company has secured licensing deals with industry giants like GSK ($12 billion for 12 preclinical programs in 2024), Merck ($500 million for a heart disease candidate in 2025), and Kailera Therapeutics ($6 billion for obesity drugs in 2023)Inside Hengrui: The Making of China’s Top Pharma Innovator^[6]. These deals have generated over $20 billion in licensing income since 2023, reducing reliance on its domestic market, where innovative drugs now account for 70% of revenueHengrui Pharmaceuticals Reports 22.63% Revenue Growth in 2024^[7].

The company's R&D investment—24.3% of operating revenue in 2023What is Growth Strategy and Future Prospects of Jiangsu Hengrui Medicine^[8]—has fueled a pipeline of over 90 therapies, including PD-1 inhibitors, VEGFR-2 inhibitors, and GLP-1/GIP receptor agonists. This depth allows Hengrui to pursue multiple licensing avenues simultaneously, as seen with its recent partnership with Braveheart Bio for HRS-1893, a cardiac myosin inhibitorJiangsu Hengrui Pharmaceuticals Co., Ltd.^[9]. Such diversification mitigates the risks of regulatory setbacks or market saturation in any single region.

Financial Resilience and Market Positioning

Hengrui's financials reinforce its strategic agility. Total revenue reached $4.19 billion in 2025 (TTM), up from $3.88 billion in 2024 and $3.22 billion in 2023Jiangsu Hengrui Medicine (600276.SS) - Revenue^[10]. Innovative drugs contributed $1.9 billion in 2024 alone, with fruquintinib's FDA approval in the US—a first for Hengrui—demonstrating its ability to penetrate high-margin international marketsHengrui Medicine's Global Expansion: Navigating the Future^[11]. The company's licensing deals have also insulated it from pricing pressures in China, where generic drug margins are shrinking.

Risks and Opportunities

While Hengrui's strategy is compelling, challenges remain. Glenmark's commercial success in the licensed territories will depend on navigating regulatory hurdles and payer dynamics in markets like Latin America and Southeast Asia. Additionally, the company's heavy R&D spending—though a strength—could strain cash flow if clinical trials for key assets (e.g., HRS-9531 for obesity) face delays.

However, Hengrui's track record suggests it is well-equipped to manage these risks. Its prior partnerships with Merck and GSK have provided templates for global commercialization, and its 24.3% R&D investment ensures a steady pipeline of candidates to replace maturing assetsJiangsu Hengrui Pharmaceuticals Reports 7.26% Revenue Growth^[12].

Conclusion: A Model for Global Pharma Innovation

Hengrui's licensing deal with Glenmark exemplifies a new paradigm in pharmaceutical innovation: leveraging global partnerships to scale high-value therapies while retaining control in premium markets. By combining aggressive R&D, strategic out-licensing, and a diversified revenue model, Hengrui is not only insulating itself from domestic market pressures but also positioning itself as a key player in the global oncology race. For investors, the company's ability to monetize its pipeline through multiple channels—licensing, royalties, and direct sales—offers a compelling case for long-term growth.