Shares of Sino Biopharmaceutical (01177) rose more than 4%, gaining 3.15% to HK$5.725 as of press time, with turnover of HK$188 million.

Citi issued a research report stating that Chia Tai Tianqing, a subsidiary of Sino Biopharmaceutical, has entered into a strategic collaboration with German pharmaceutical company STADA for a biosimilar, granting STADA exclusive rights to commercialize pembrolizumab biosimilar (TQB3570, an anti-PD-1 monoclonal antibody) in the European Union, Switzerland, the United Kingdom and the Commonwealth of Independent States, with an option to expand into the United States and Gulf Cooperation Council (GCC) member states.

The bank considers the collaboration a positive surprise. Under the agreement, Chia Tai Tianqing will receive an upfront payment and up to EUR 53 million in development, regulatory and sales milestone payments, along with double-digit profit sharing.

Citi noted that the collaboration validates the commercial quality of Sino Biopharmaceutical's biosimilar production platform, and the company will be able to share licensing drug profits through production supply in the future, benefiting from the expansion of the global biosimilar market driven by 118 U.S. biologic drug patents expiring between 2025 and 2034, with combined sales exceeding US$230 billion.

Sino Biopharmaceutical disclosed that its outbound licensing transactions for the year totaled US$355 million in upfront and near-term milestone payments, with potential total transaction value reaching US$3.4 billion.