Chinese Biopharma Stocks Surge on Reports US May Ease Drug Deal Restrictions

Chinese biopharmaceutical stocks rose sharply in Hong Kong trading on Monday following reports that the United States is considering regulations that would permit American companies to continue licensing drugs from Chinese developers. The potential policy shift has distinguished the biotech sector from industries like artificial intelligence and semiconductors, where Washington has recently imposed stricter controls.

Innovent Biologics gained 6%, while Akeso climbed 8% and CSPC Pharmaceutical Group rose more than 6%. Shares of HUTCHMED and Sino Biopharmaceutical also posted gains of 3% and 8%, respectively. The broader Hang Seng Biotech Index increased by over 5%.

The market reaction followed a Reuters report published on Friday, which cited sources familiar with the matter stating that the U.S. Treasury Department is drafting rules that would likely allow U.S. pharmaceutical firms to invest in promising new medications developed in China. These proposed rules would exclude deals related to pathogens or biotechnology that could be used as weapons. The Treasury noted that the regulations are still being finalized and remain subject to change.

Data from GlobalData, as cited by Reuters, indicates that nearly half of all overseas drug licensing deals initiated by U.S. companies in 2025 involved Chinese firms. Highlighting the scale of these collaborations, Pfizer announced a strategic partnership with Innovent in May valued at up to $10.5 billion, covering the research and development of 12 oncology programs.

Despite ongoing geopolitical tensions, China’s out-licensing activity has accelerated. According to data from the National Medical Products Administration cited by Nomura, Chinese companies completed a record 81 licensing deals in the first half of 2026, totaling $110 billion. Nomura observed that investors appear largely unfazed by intermittent geopolitical concerns, citing the strong value proposition Chinese companies offer in novel drug development.

Nomura further noted that globalization remains a central objective for China’s pharmaceutical and biotech sectors under its 15th five-year plan. Consequently, the bank expects China-U.S. out-licensing transactions to continue thriving in the near term.