Hengrui Pharmaceuticals' Stock Surges on GSK Deal Worth Up to $12 Billion

Jiangsu Hengrui Pharmaceuticals' shares have surged to their highest levels in four years after GSK agreed to pay $500 million upfront for the company's potential chronic lung disease treatment. The deal also includes options to license 11 more of Hengrui's drug candidates, with a total potential value of up to $12 billion. Hengrui's Shanghai-listed stock rose 8.16% and Hong Kong-listed shares increased 10.95% on Monday.

Jiangsu Hengrui Pharmaceuticals' shares have seen a significant surge to their highest levels in four years following GlaxoSmithKline's (GSK) agreement to pay $500 million upfront for the company's potential chronic lung disease treatment. The deal, announced on July 27, 2025, also includes options to license 11 additional drug candidates, with a total potential value of up to $12 billion. Hengrui's Shanghai-listed stock rose by 8.16% and Hong Kong-listed shares increased by 10.95% on Monday, July 28, 2025.

The agreement between Hengrui and GSK covers an exclusive worldwide license (excluding mainland China, Hong Kong SAR, Macau SAR, and Taiwan region) for a potential best-in-class PDE3/4 inhibitor (HRS-9821) in clinical development for the treatment of chronic obstructive pulmonary disease (COPD). HRS-9821 has demonstrated potent PDE3 and PDE4 inhibition, leading to increased bronchodilation and anti-inflammatory effects in early clinical and preclinical studies. Additionally, the agreement includes a pioneering scaled collaboration to generate up to 11 programmes, each with its own financial structure.

Frank Jiang, Executive Vice President and Chief Strategy Officer of Hengrui Pharma, stated, "This strategic collaboration with GSK marks yet another significant milestone in Hengrui's globalisation journey and our mission to innovate and deliver higher-quality, cutting-edge therapies for patients worldwide. GSK brings additional R&D expertise, a robust global clinical network, and broad regulatory capabilities that will accelerate our PDE3/4 inhibitor as well as an array of other innovative therapy programs to overseas markets, potentially delivering breakthrough treatments to patients globally."

Tony Wood, Chief Scientific Officer at GSK, added, "We're delighted to announce these exciting agreements with Hengrui Pharma which complement our already-extensive pipeline. This deal reflects our strategic investment in programmes that address validated targets, increasing the likelihood of success, and with the option to advance those assets with the greatest potential for patient impact."

The collaboration between Hengrui and GSK enables scale and speed to proof-of-concept, benefiting from GSK's therapy area expertise, deep understanding of disease biology, clinical development capability, and global commercial scale, combined with Hengrui's early discovery engine, platform technologies, extensive pre-clinical pipeline, and speed of clinical evaluation.

The financial terms of the agreement include an upfront fee of $500 million, with the potential for milestone payments totaling approximately $12 billion if all programmes are optioned and all milestones are achieved. Hengrui will also be eligible to receive tiered royalties on global product net sales (excluding mainland China, Hong Kong SAR, Macau SAR, and Taiwan region).

The license to HRS-9821 is subject to customary conditions, including applicable regulatory agency clearances under the Hart-Scott-Rodino Act in the US.

References:
[1] https://www.prnewswire.com/news-releases/hengrui-pharma-and-gsk-enter-agreements-to-develop-up-to-12-innovative-medicines-across-respiratory-immunology--inflammation-and-oncology-302514566.html
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3TP01B:0-jiangsu-hengrui-grants-gsk-global-rights-to-drug-portfolio-in-500-million-deal/
[3] https://www.reuters.com/business/healthcare-pharmaceuticals/jiangsu-hengrui-grants-gsk-global-rights-drug-portfolio-500-million-deal-2025-07-28/
[4] https://www.marketscreener.com/news/hengrui-pharmaceutical-to-sell-license-to-lung-disease-drug-to-gsk-ce7c5fd8d988f721