Sino Biopharmaceutical Ltd

Yuanta Securities issued an analysis turning more bullish on SINOBIO19, or the ordinary shares of SINO BIOPHARMACEUTICAL LIMITED (1177.HK), after the company announced a partnership with STADA, a global pharmaceutical company in Germany, to bring TQB3570, a biologic drug with efficacy close to that of Keytruda, the world's most popular cancer treatment, into the European, UK, and Swiss markets, with the potential to expand into the US market in the future. Under the deal, Sino Bio will manufacture and supply the drug itself but distribute it under STADA's brand, and will recognize a profit share of more than 10%. This means Sino Bio will recognize revenue from both manufacturing and an additional share of profits when STADA sells the drug in the region, creating a new revenue base for the company. Meanwhile, the Chinese government continues to target innovative pharmaceuticals as one of its key industries and will push for the sector to grow by an average of 20% per year during 2026-2030, giving the company the opportunity to receive government support both in speeding up approvals for drugs in its pipeline and in supporting R&D. As for this year's normalized profit outlook, the Bloomberg Consensus expects normalized profit to continue growing by 5%. The current price trades at a 2027 PER of 18 times. It gives a target price of 7.10 baht per DR, implying 44% upside.

Chinese biopharma shares rallied on Monday after a report that the U.S. Treasury Department is drafting rules that would likely allow American pharmaceutical companies to invest in promising new drugs developed by Chinese firms, excluding those related to pathogens or biotechnology that could be weaponized. Innovent Biologics rose 7% and Akeso gained 8%, while HUTCHMED advanced 3% and Sino Biopharmaceutical added 8%, and the Hang Seng Biotech Index climbed more than 5%. The report follows Friday's news of the pending Treasury rules and comes as Chinese President Xi Jinping is set to meet with his American counterpart this week, at a time when other U.S. industries face a tighter regulatory environment for business dealings in China under new national security legislation. Almost half of U.S. deals to license drugs from overseas in 2025 were with Chinese companies, and China signed licensing deals worth a total $110B in the first half of 2026.

Yuanta Securities said Sino Biopharmaceutical Limited, or DR SINOBIO19, reported first-half 2026 results with revenue up 11% year on year and normalised profit up 8% year on year, beating market expectations by as much as 61% year on year. Growth was supported by innovative drugs, which rose 29%, and out-licensing income, which rose 44%; together these two segments already account for 45% of total revenue. The company also reaffirmed strategic partnerships with Sanofi, AstraZeneca and GSK, supporting long-term revenue growth. The broker sees scope for SINOBIO's valuation to be re-rated because it is relying less on generic drug revenue. Bloomberg consensus expects normalised profit in the second half of 2026 to grow 17% year on year, driven by solid sales growth and continued margin expansion. The current price trades at only 20 times 2026 earnings. The broker sets a target price of 6.90 baht per DR, implying 47% upside.

AstraZeneca reported total revenue of $30.7 billion for the first half of 2026, a 6% increase at constant exchange rates, and reaffirmed its ambition to reach $80 billion in total revenue by 2030. Core earnings per share rose 11% to $5.21, while the interim dividend was raised by 3 cents to $1.06 per share. The company highlighted double-digit growth in Oncology and Rare Disease, which offset headwinds from Farxiga's US loss of exclusivity and China volume-based procurement. CEO Pascal Soriot acknowledged the disappointment of the CARDIO-TTRansform trial outcome but pointed to six positive Phase III readouts and eight first approvals in major markets, including the US approval of first-in-class hypertension medicine Baxfendy. AstraZeneca also announced two licensing deals: an exclusive agreement with Dizal Pharmaceutical for lung cancer drug Zegfrovy, involving an upfront payment of $600 million and up to $900 million in milestones, and a deal with Sino Biopharmaceutical's CTTQ for respiratory asset TQC3721, with a $200 million upfront and up to $1.9 billion in milestones.

AstraZeneca has secured global rights, excluding China, to Sino Biopharmaceutical’s experimental COPD treatment TQC3721 in a deal that includes a $200 million upfront payment. Under the agreement, AstraZeneca will oversee development, manufacturing, and commercialization of the drug, while Sino Biopharmaceutical retains rights within China. TQC3721 recently showed significant lung function improvement and symptom reduction in a Phase II trial in China. The deal marks the second major out-licensing for the Sino Biopharmaceutical subsidiary this year, following a March agreement with Sanofi for a blood cancer drug. AstraZeneca’s respiratory portfolio already includes its own late-stage COPD candidate, tozorakimab.

The pharmaceutical sector rallied strongly during trading on the 6th, with weight-loss drug and innovative drug concepts standing out. Shouyao Holdings and Gan & Lee Pharmaceuticals were among multiple stocks that hit their daily limit up. As of press time, Shouyao Holdings surged by the 20 percent daily limit, Hotgen Biotech rose about 14 percent, Mabwell Bioscience, InventisBio, and Shanghai Yizhong Pharmaceutical gained over 10 percent, Gan & Lee Pharmaceuticals, Huahai Pharmaceutical, and Menovo Pharmaceutical also hit their daily limit up, BeiGene and Pharmaron climbed over 7 percent, and Hengrui Medicine advanced more than 5 percent. In the Hong Kong market, Duality Biologics, InnoCare Pharma, and Sino Biopharmaceutical rose over 10 percent, while WuXi XDC and Pharmaron gained more than 5 percent. On the news front, the National Medical Products Administration is soliciting public comments on optimizing the review and approval of cell and gene therapy drugs, encouraging clinically value-oriented R&D innovation, focusing on key areas such as malignant tumors and rare diseases, and placing eligible drugs into a 30-day review and approval pathway. Meanwhile, the overseas expansion of innovative drugs is accelerating. Since 2026, the total value of China's innovative drug license-out deals has reached 94.3 billion US dollars, up 81 percent year-on-year, with upfront payments reaching 5.5 billion US dollars, up 124 percent year-on-year, reflecting growing overseas recognition of China's innovative drug pipeline. CICC noted that leading innovative drug companies are shifting from the R&D investment phase into a positive cycle of commercial scale-up and overseas licensing revenue realization.