Hengrui rising: Frank Jiang on building a global biotech

Behind the deals and R&D of China’s top biopharma 

Launched in the 1970s as a generics company, Hengrui has become China’s leading innovator in R&D and dealmaking, with more than 100 NMEs in its clinical pipeline and broad alliances with GSK and BMS. Under the leadership of Frank Jiang, EVP and chief strategy officer, Jiangsu Hengrui Pharmaceuticals Co. Ltd. (Shanghai:600276; HKEX:1276) (恒瑞医药) is engaging in a range of dealmaking and using its partnerships as stepping stones toward its goal of becoming one of the top biopharma companies in the world.

On The BioCentury Show, Jiang traces Hengrui’s evolution alongside China’s biotech ecosystem, which is moving from follow-on to first-order innovation and from straightforward licensing with “safe money” toward NewCo deals and “co-co” partnerships.

“We see, most recently, very engaged, multidimensional strategic alliances. I think what really makes that happen are two words: the innovation quality and innovation efficiency,” Jiang told BioCentury. “If you were to look at innovative pipelines today, globally, one third [of the compounds] are from China.”

Deal sizes, types, and terms are rapidly evolving as China’s biotechs gain more leverage in negotiations with Western companies. Hengrui’s alliances show how China-originated innovation is expanding beyond simple licenses into broad, strategic partnerships with Western biopharmas.

Hengrui’s deal last year with GSK plc (LSE:GSK; NYSE:GSK) to co-develop up to 12 drugs for $500 million up front reflects this shift. So does its deal in May with Bristol Myers Squibb Co. (NYSE:BMY), which marked its first co-development/co-commercialization deal with a Western biopharma — a milestone on its path to globalization.

Hengrui is to receive $600 million up front plus $350 million in near-term payments from the U.S. MNC. Milestones could bring the total value to $15.2 billion. The deal covers 13 programs spanning multiple therapeutic areas, with each company gaining territorial rights to some of the other’s programs and five programs that will be jointly discovered and developed.

Through such co-co deals, Jiang said, “We are able to learn very quickly and gain hands-on experience in clinical development, as well as regulatory, CMC and commercialization.”

He added: “I think there is a strategic transformation for such deals, such alliances. This is not a one-off, right? We’re building up long-term alliances, and we are essentially in the ecosystem with equal partners.”

The company is poised to take its learnings from the GSK and BMS deals to build on a foundation that has already made it China’s No. 1 biopharma by market share and number of NMEs. Last year, Hengrui posted $4.6 billion in revenue, and it now has $5.8 billion in cash.

Hengrui is running over 400 clinical trials, expects to have 20 first- or best-in-class therapies entering the clinic each year, and has a pipeline spanning oncology; cardiovascular and metabolic diseases, including obesity; immunology; and CNS.