UBS China Biotech: H225 preview - Solid product sales growth; BD income not fully priced in; rich R&D catalysts
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UBS published a China biotech preview for the second half of 2025, noting that most covered companies are expected to deliver solid innovative drug sales growth. According to IQVIA tracking data through November 2025, several companies achieved substantial year-over-year growth, led by Akeso (151%), Junshi Biosciences (60%), and RemeGen (59%). HUTCHMED experienced a slowdown in US sales growth to 5%, but its China sales showed signs of recovery.
Looking ahead to 2026, UBS projects resilient product sales growth, with Carsgen Therapeutics, Kelun-Biotech, and Akeso leading the pack. Business development income and product sales remain the primary drivers for many companies approaching profitability, a factor UBS believes the market consensus has not fully priced in. Among firms potentially turning profitable in 2025, UBS suggests Bio-Thera and Innovent Biologics could achieve breakeven even excluding BD revenue.
Biotech remains one of UBS's favored subsectors within China healthcare for 2026. The firm prefers companies with proven internal R&D capabilities and commercialization strength. BeiGene stands out as the top pick, given its attractive valuation and sustained growth momentum. UBS also maintains Buy ratings on Kelun-Biotech, Innovent Biologics, and Akeso. The sector faces a rich pipeline of near-term R&D catalysts, including major regulatory approvals and crucial data readouts from events like ASCO and AACR scheduled throughout the first half of 2026.