Biotech Values

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4,000,000 Reasons to Back China Biotech

With cancer rates rising, Jiangsu Hengrui has a shot at becoming the next Roche or Pfizer.

April 17, 2018, 5:00 PM EDT

Anyone who doubts China could produce the next Roche Holding AG or Pfizer Inc. need only look at the country's cancer figures: More than 4 million new patients or close to 12,000 per day diagnosed in 2015, the latest public data available.

Global investors have settled on a favored contender in Jiangsu Hengrui Medicine Co., whose Shanghai-traded shares have surged about 80 percent in the past year. Buyers from overseas have accumulated 14 percent of the drugmaker through the Shanghai-Hong Kong stock connect.

Hengrui's potential in cancer drugs is its main attraction. With the disease becoming a major health issue in the world's most-populous nation, it's in the right place at the right time. The company, based in Lianyungang in the eastern province of Jiangsu, boasts one of the largest oncology sales forces in China. Anti-cancer drugs already contribute more than 40 percent of its revenue.

More importantly, Hengrui has a promising pipeline for cancer immunotherapy treatments, which work by boosting the patient's immune system to fight the disease. The five PD-1/L1 inhibitors approved by the U.S. FDA generated about $6 billion of sales last year, or about 15 percent of total oncology drug revenue, estimates Goldman Sachs Group Inc. China still relies on chemotherapy as its primary cancer treatment.


https://www.bloomberg.com/gadfly/articles/2018-04-17/chinese-drugmaker-hengrui-has-a-shot-at-being-the-next-roche