China Biologics obtains commercialization rights in China for two additional GSK respiratory drugs

Overview

This report is a quick note by Nomura on China Biologics (1177.HK). The key event is that China Biologics, building on its existing partnership with GSK, further obtained commercialization rights in China for two already listed respiratory drugs, Trelegy Ellipta and Anoro Ellipta. The report believes this cooperation strengthens the company’s respiratory portfolio and deepens the partnership with GSK.

Core views

Nomura maintains a positive view, believing that China Biologics has strong commercialization capability in respiratory treatment areas in China. Adding the two new GSK listed drugs is expected to enrich the company’s product lineup, and more importantly, further solidify the cooperation, creating conditions for more cooperation in the future. The report maintains a Buy rating and an HKD8.67 target price.

Analysis framework

The report adopts an event-driven company research framework, assessing the licensing cooperation, product clinical and commercial positioning, global and China sample hospital sales, the company’s commercialization capability, and extendability of the partnership, and maintains the target price using DCF valuation.

Methodology notes

• Valuation methodDCF model

  Discounted cash flow valuation

  The target price of HKD8.67 is based on a DCF model, assuming a WACC of 9.5% and a perpetual growth rate of 3%.

• Rating frameworkNomura equity rating framework

  Relative benchmark performance

  A Buy rating indicates the analyst expects the stock to outperform the benchmark index over the next 12 months; the benchmark index in this report is the Hang Seng Index.

• Event analysisCommercialization-rights cooperation analysis

  Portfolio strengthening and cooperation deepening

  The report focuses on assessing the impact of China Biologics obtaining commercialization rights in China for two GSK listed respiratory drugs on both the respiratory product portfolio and the long-term cooperation relationship.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China Biologics (1177.HK)

  Covered company and main beneficiary

  Strengths

  Strong commercialization capability in the relevant treatment areas in China; newly acquired GSK listed respiratory drugs help expand the portfolio; cooperation with GSK has deepened further.

  Weaknesses

  The report does not provide financial terms of the transaction or quantify the specific contribution of the new rights to revenue and profit.

  Comparison

  The report uses the Hang Seng Index as the benchmark for stock performance and maintains a Buy rating, implying expected outperformance relative to the benchmark over the next 12 months.

  Risks

  Sales weaker than expected; further external licensing collaborations fail to proceed.

• GSK (GSK LN)

  Partner and originator of the medicines

  Strengths

  Has mature respiratory medicines such as Trelegy Ellipta and Anoro Ellipta and a large global sales footprint.

  Weaknesses

  The report does not rate GSK or analyze GSK’s own investment merits.

  Comparison

  GSK is an unrated name and not the focus of stock performance in this report.

  Risks

  Commercial execution in China, licensing and partnership arrangements, and product growth could affect cooperation outcomes.

Key data

• RatingBuyUnchanged.
• Target PriceHKD8.67Unchanged, based on the DCF model.
• Close PriceHKD4.82As of July 7, 2026.
• Implied upsideabout 79.9%Calculated using a target price of HKD8.67 versus a close price of HKD4.82.
• Trelegy Ellipta global salesFY25 GBP3.0bn；1Q26 GBP646mnYoY growth rates were 11% and -4%, respectively.
• Anoro Ellipta global salesFY25 GBP542mn；1Q26 GBP128mnYoY growth rates were -5% and +1%, respectively.
• Trelegy Ellipta China sample hospital sales2025 CNY819mn；1Q26 CNY218mnYoY growth rates were +34% and +6%, respectively.
• Anoro Ellipta China sample hospital sales2025 CNY118mn；1Q26 CNY30mnYoY growth rates were +11% and -3%, respectively.
• WACC assumption9.5%Key parameter in DCF valuation.
• Perpetual growth assumption3%Key parameter in DCF valuation.

Impact & implications

The direct impact of this transaction is to add to China Biologics' commercialized products in respiratory diseases in China, especially covering asthma and COPD maintenance treatment scenarios. A deeper impact is that after expanding cooperation with GSK following its hepatitis B drug commercialization partnership, the scope of collaboration may continue to expand, potentially increasing the visibility for securing more licensed rights or partnership projects in the future.

Risks

• Sales performance falls short of expectations.
• The company is unable to proceed with additional external licensing partnerships.
• Achievement of the target price may be affected by macro conditions, deviations in company earnings from expectations, and market risks.

What to watch

• Sales ramp-up pace of Trelegy Ellipta and Anoro Ellipta in China.
• Channel coverage and promotional execution by China Biologics in respiratory medicines.
• Whether China Biologics and GSK continue to expand collaboration into additional products.
• The number, quality, and commercial contribution of the company’s future external licensing deals.
• Key DCF assumptions, including WACC, perpetual growth rate, and changes in earnings forecasts.