GSK Signs License Deal With Jiangsu Hengrui, a Big Milestone for the Pharmaceuticals Industry

The partnership between GSK and Hengrui is part of a growing trend of license deals signed between Chinese and global multinational corporations, whose inventions are helping transform global treatment pipelines.

GlaxoSmithKline (GSK) will pay a Chinese company, Jiangsu Hengrui, for its exclusive worldwide rights to produce a dozen drugs. This historic agreement shows how China’s research lab is gaining market dominance in the global pharmaceutical and biomedical industries.

The deal would grant GSK the rights to develop 11 of the preclinical programs owned by Jiangsu Hengrui Pharmaceuticals. It includes a medication called HRS-9821 for the treatment of chronic obstructive pulmonary disease (COPD). The deal would bring in up to $12 billion for Hengrui, the biggest pharmaceutical company in China based on market capitalization.

The key player in the deal is HRS-9821, a drug that has been approved for use in human trials in China for chronic obstructive pulmonary disease, or COPD, a serious illness that causes breathing problems.

The Hong Kong stock exchange informed on Monday that mainland China, Taiwan, Hong Kong, and Macau are not part of the global rights.

The deal is the latest in a series of deals between multinational corporations (MNCs) and Chinese pharmaceutical companies, which have increased China’s percentage of global license deal value from 1% in 2019 to 28% in 2024. In May, Pfizer agreed to pay Shenyang-based 3SBio US$1.25 billion to get the sole right to produce the Chinese company’s drug for treating tumors.

A report showed that the value of pharmaceutical out-licensing in China increased to US$66 billion in the first half of 2025, surpassing the prior year. While Chinese companies view this deal as an opportunity to profit from the last work and fund new projects, global companies saw it as a chance to expand their pipelines and portfolios with exclusive products.

In 1997, Hengrui was established in Lianyungang, Jiangsu province. It would receive upfront payment of US$500 million and charge GSK US$12 billion after achieving development, regulatory clearance, and sales goals.

The Chinese company stated that the deal will help expand the global market for HRS-9821 and several innovative drugs in various therapeutic areas, including oncology, respiratory, immunology, and inflammation, giving high-quality treatment options to patients globally.

It works similarly to a commercial medication from Verona Pharma, a United States (US) company that Merck just bought for $10 billion.

The partnership between GSK and Hengrui is part of a growing trend of license deals signed between Chinese and global multinational corporations, whose inventions are helping transform global treatment pipelines and increasing international reputations.

According to Citigroup analysts led by John Yung, the $12 billion deal was the biggest ever deal for Chinese drug developers.

GSK got permission for new medications and is testing an additional treatment for Chronic Obstructive Pulmonary Disease.

The other Hengrui medications available for licensing include inflammation, immunological disorders, respiratory disorders, and cancer.

As per the agreement, Hengrui will oversee further development until the completion of the first human trials, including outside of China.

Morgan Stanley analysts claimed that the deal will boost Hengrui’s revenue and net profit above management’s goals and market expectations.

GSK already has one Hengrui-originated medication in its portfolio. In early 2024, it acquired US biotech Aiolos Bio for $1 billion to obtain an asthma treatment that the company has licensed from Hengrui.

Since then, Hengrui has signed many significant contracts, including licensing a cardiovascular drug to Merck and obesity drugs to Kailera Therapeutics.

Jiangsu Hengrui Pharmaceuticals shares surged to their highest levels in four years after GSK agreed to pay $500 million for its potential therapy for chronic lung conditions.

The company’s Hong Kong-listed shares were 10.95% on Monday, while its Shanghai-listed shares increased as much as 8.16% to hit their highest level since July 2021.