UBS: The Long View — Comparing R&D Muscles of China Pharma & Biotech
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UBS evaluates the research and development efficiency of Chinese pharmaceutical and biotechnology companies through three analytical lenses: economic return, time-to-market, and pipeline scale. The report identifies Innovent Biologics, Akeso, and Hengrui Pharma as the likely future winners. In 2025, Hansoh Pharmaceutical achieved the highest sales-to-R&D return ratio at 2.0 times, while Kelun-Biotech led in licensing revenue return at 1.0 times.
By 2030, Innovent and Akeso are projected to achieve approximately 3 times return on sales relative to cumulative R&D spending, alongside licensing returns of 0.7 to 0.9 times. Hengrui Pharma is expected to deliver the best R&D returns among traditional pharma companies by 2030. Regarding time-to-market, Zai Lab is fastest overall due to its license-in model. Innovent leads among self-developed companies, with oncology drugs taking 1,067 days and non-oncology drugs 2,111 days from IND to approval.
Biotech firms demonstrate a hit rate nearly double that of pharma companies, with both Innovent and Akeso exceeding 40%. Hengrui possesses the largest pipeline with over 360 assets. Notable catalysts include potential FDA approval for Akeso's AK112 in 2027 and a milestone payment from Takeda boosting Innovent's licensing revenue.
Key ratings include Innovent Biologics (1801.HK) with an Outperform rating and a target of HK$120.00, Akeso (9926.HK) at HK$130.00, and Hengrui Pharma (600276.CH) with a target of RMB 71.00.
Key exhibits
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