China biotech commercialization and breakeven progress is clear, and the R&D conference season could extend the re-rating
AI summary card
China biotech commercialization and breakeven progress is clear, and the R&D conference season could extend the re-rating
UBS believes China's biotech sector continues to improve in sales, BD licensing, cash runway and profitability, and conferences such as AACR, ASCO and ADA, along with multiple clinical/regulatory catalysts, may support sector performance.
- Product sales among covered biotech companies grew 46% YoY in 2025, with BeOne sales reaching US$5.3bn, up 40% YoY, and Innovent sales reaching Rmb11.9bn, up 45% YoY.
- Overall cash position rose 23% YoY, and the median cash runway increased to 2.8x, above 2.2x in H125, though company-level divergence remains wide.
- BeOne, Innovent, InnoCare and RemeGen achieved their first full-year breakeven in 2025, and UBS believes their profitability is sustainable in 2026 and beyond.
- In the second quarter, the focus is on AACR, ASCO and ADA, as well as regulatory approvals and data readouts for BeOne, Akeso, RemeGen, Kelun Biotech, Innovent and others.
Report interpretation
Overview
This report reviews H225 results and the 2026 outlook for China biotech companies. Since late 2024, after about 20 new biotech companies listed, the total number of biotech companies listed on A-shares and Hong Kong's 18A boards has approached 100. Although there are clear differences in cash runway and market capitalization across companies, the sector as a whole is improving in cash position, revenue growth, loss reduction, commercialization and BD licensing income.
Core views
UBS's core view is that China's biotech sector is shifting from being purely R&D-driven to balancing commercialization, profitability and global expansion. Leading companies such as BeOne and Innovent have begun to surpass some traditional pharmaceutical companies in market cap, revenue and profitability. As major academic conferences take place from April to June, multiple R&D data readouts, regulatory approvals and potential global collaborations may continue to support a re-rating of HSBIO.
Analysis framework
The report assesses China's biotech sector and key companies by combining H225 results, 2025 revenue and loss changes, cash runway, BD transaction progress, company sales guidance, valuation comparisons, DCF target price adjustments, and the upcoming academic conferences and clinical catalysts.
Methodology notes
Assess the quality of commercialization by looking at product sales growth, net loss changes, full-year breakeven and management guidance.
The report focuses on comparing 2025 product sales, revenue, net losses and 2026/2027 sales targets to evaluate the sustainability of profitability.
Adjust DCF target prices based on pipeline success probabilities, revenue forecasts and licensing revenue assumptions.
The target price increases for Kelun Biotech, RemeGen and InnoCare mainly reflect changes in indication success probabilities, pipeline inclusion and licensing income expectations.
Track regulatory approvals, clinical data readouts and disclosures at major academic conferences.
The report views AACR, ASCO, ADA and multiple drug data readouts as important catalysts in the second quarter.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- BeOneUBS top pick
- Strengths
- 2025 sales reached US$5.3bn, up 40% YoY, 2026 revenue guidance is US$6.2-6.4bn, and early pipeline assets have the potential to advance into key trials.
- Weaknesses
- Valuation and growth expectations depend on sustained sales execution and early pipeline progress.
- Comparison
- The report says it has begun to outperform some traditional pharma companies alongside Innovent and other leading biotech firms in market cap, revenue and profitability.
- Risks
- New drug data, regulatory approvals, competition and weaker-than-expected commercialization.
- InnoventUBS favored key company
- Strengths
- 2025 product sales were Rmb11.9bn, up 45% YoY, and the company maintained its 2027 product sales target of Rmb20bn.
- Weaknesses
- The medium- to long-term target requires continued commercialization expansion and pipeline progress.
- Comparison
- It is a leading biotech company alongside BeOne, with strong commercialization capabilities.
- Risks
- Sales targets falling short, R&D data risk and market competition risk.
- Kelun BiotechBuy rating, target price raised
- Strengths
- The assumed probability of success for Sac-TMT in China's 1L NSCLC indication was raised from 70% to 95%, and phase 3 data related to the MSD collaboration and a potential BLA filing may increase licensing revenue.
- Weaknesses
- The valuation is sensitive to Sac-TMT data, approvals and collaboration progress.
- Comparison
- UBS lists it as one of the preferred names after BeOne and Innovent.
- Risks
- Clinical failure, approval delays and lower-than-expected BD revenue.
- AkesoUBS favored key company
- Strengths
- Ivonescimab has several near-term catalysts across 1L squamous NSCLC, HARMONi-3 and HARMONi-6.
- Weaknesses
- The investment case is highly dependent on key data readouts and regulatory progress.
- Comparison
- Compared with other innovative drug companies, its near-term event catalysts are relatively dense.
- Risks
- Clinical data falling short of expectations, intensifying competition and approval uncertainty.
- RemeGenBuy rating, target price raised
- Strengths
- The target price increase reflects RC18 approvals in China for IgA nephropathy and primary Sjögren's syndrome, as well as the inclusion of RC148 in the valuation model.
- Weaknesses
- Including RC148 in the valuation has no impact on near-term earnings forecasts.
- Comparison
- It is one of the companies under UBS coverage that achieved full-year breakeven.
- Risks
- Indication progress, pricing negotiations and weaker-than-expected commercialization.
- InnoCareBuy rating, target price raised
- Strengths
- The company achieved full-year breakeven in 2025, ICP-332 is progressing well in chronic spontaneous urticaria, and topline data may read out in Q4 2026.
- Weaknesses
- The target price increase mainly comes from pipeline inclusion and has no impact on near-term earnings forecasts.
- Comparison
- Like RemeGen, sustainability of profitability and pipeline execution are the core points to watch.
- Risks
- Clinical data risk, sales growth risk and competition risk.
Key data
- Number of listed companiesClose to 100 companiesTotal number of biotech companies listed on A-shares and Hong Kong's 18A boards.
- Cash position+23% YoYOverall cash position rose YoY in 2025; in 2024 it was -6%.
- Median cash runway2.8xAbove 2.2x in H125; company range was 0.1-6.4x.
- 2025 revenue/net loss change+34%/-57% YoYReflects narrowing losses driven by commercialization and BD income.
- 2025 product sales growth+46% YoYProduct sales growth among covered biotech companies.
- BeOne 2025 salesUS$5.3bn, +40% YoYThe report says sales and profit growth are still likely to continue.
- Innovent 2025 product salesRmb11.9bn, +45% YoYThe company maintains its 2027 product sales target of Rmb20bn.
- 2025 BD transactionsupfront/total deals +58%/+145% YoYYear to date, BD has continued to accelerate, with upfront/total deals reaching 48%/37% of 2025 levels.
- Kelun Biotech target priceHK$625Raised from HK$578; reiterated Buy.
- RemeGen target priceHK$139.2Raised from HK$132.4; reiterated Buy.
- InnoCare target priceHK$21.2Raised from HK$19.8; reiterated Buy.
Impact & implications
If commercialization growth, BD transactions and R&D data materialize, China's biotech sector could continue to see valuation re-rating. Investment should prioritize companies with strong in-house R&D, commercialization capabilities, clear paths to profitability and global collaboration potential, while paying attention to risks such as NRDL negotiations, volume-based procurement price cuts, competition and geopolitical tensions.
Risks
- Price cuts in volume-based procurement exceed expectations.
- Intensifying industry competition.
- Innovative drugs are priced below expectations after entering NRDL negotiations.
- China's consumption recovery is slower than expected.
- Regulatory announcements and enforcement are stricter than expected.
- Geopolitical tensions unexpectedly intensify and affect company operations.
What to watch
- Disclosures at major academic conferences such as AACR, ASCO and ADA in Q2 2026.
- BeOne's Sonrotoclax regulatory approval progress for the r/r MCL indication in the US.
- Akeso's Ivonescimab for 1L squamous NSCLC and data related to HARMONi-3 and HARMONi-6.
- RemeGen's RC18 approval in China for IgA nephropathy and primary Sjögren's syndrome.
- Kelun Biotech's sac-TMT data in 1L NSCLC, TNBC and other indications, and a potential BLA filing.
- PoC data for Innovent's IBI363 in 1L NSCLC and CRC.
- Whether the pace of BD transactions, upfront payments and total deal value continue to stay above 2025 levels.
- 2026 sales growth and profitability sustainability for companies such as BeOne, Innovent, InnoCare and RemeGen.