The "disruptive therapy" for cancer, China's innovative drug "DeepSeek moment"! The core keyword: PD(L) 1 bsAb

In the global innovative drug field, a breakthrough from China is attracting significant attention: PD(L) 1 bispecific antibodies (bsAb). This new generation of tumor immunotherapy is being regarded as the "DeepSeek moment" for China's biopharmaceutical industry—not only because of its disruptive technological principles but also because it may rewrite the landscape of global cancer treatment.

According to the Chasing Wind Trading Desk, HSBC's latest research report indicates that the Hang Seng Biotechnology Index in China has risen by 91% year-to-date, far exceeding the market's 26% increase. This remarkable performance stems from significant breakthroughs achieved by Chinese biotechnology companies in innovative drug development, particularly in the advanced tumor treatment field known as "PD(L) 1 bsAb." This new type of cancer immunotherapy employs a dual-targeting strategy, allowing it to bind to two different targets simultaneously, enhancing the immune response.

Over the past decade, Merck's Keytruda has almost defined the gold standard in immuno-oncology treatment. However, the AK112 developed by Chinese pharmaceutical company Akeso has demonstrated efficacy surpassing Keytruda in global clinical trials. The clinical data presented at this year's World Lung Cancer Conference has further ignited market enthusiasm, likening it to the "DeepSeek moment" for Chinese innovative drugs.

According to HSBC's forecast, the global PD(L) 1 market is expected to grow from $53 billion in 2024 to $100 billion by 2035, with bsAb accounting for approximately 65% of the market share, becoming the new mainstream. In this process, the first-mover advantage of Chinese pharmaceutical companies will play a crucial role in market competition.

Bispecific Antibodies: The Future of Tumor Treatment and a $100 Billion Opportunity

The report points out that traditional PD-1/PD-L1 monoclonal antibodies (such as Keytruda and Opdivo) enable T cells to attack cancer cells by relieving immune suppression, but a considerable proportion of patients remain ineffective or develop resistance. The advantage of PD(L) 1 bsAb lies in its ability to simultaneously target two pathways (such as PD-1/VEGF), not only enhancing the immune response but also overcoming resistance bottlenecks and covering more tumor types.

In HSBC's baseline scenario, the global PD(L) 1 market is expected to grow at a compound annual growth rate of 6% from 2024 to 2035, reaching $100 billion by 2035, with bispecific antibodies accounting for 65% of the market share.

This growth will be driven by various factors, including the launch of major bispecific antibody drugs in 2027-28, the strong anti-tumor effects of these drugs and their label expansion capabilities, as well as the expiration of monoclonal antibody patents.

For the Chinese market, HSBC expects a compound annual growth rate of 8.5% from 2024 to 2035, with the PD(L) 1 market reaching USD 10 billion by 2035, of which bispecific antibodies will account for 70% market share, totaling approximately USD 7 billion (about RMB 52 billion).

The "First-Mover Advantage" of Chinese Pharmaceutical Companies

The research and development of this disruptive therapy is primarily based in China: Of the over 300 global PD(L) 1 bsAb pipelines, about 90% come from Chinese companies.

• AKESO: AK104 and AK112 have been approved in China and are accelerating entry into the U.S. market through a licensing agreement with Summit Therapeutics worth up to USD 5 billion.

• Innovent Biologics: Its IBI363 has shown positive signals in lung cancer, melanoma, and other cancers, with plans to initiate global Phase III trials in 2025-2026.

• 3SBIO, Junshi Biosciences, and HengRui are accelerating their international expansion through clinical breakthroughs and large licensing deals.

It is noteworthy that most global pharmaceutical giants do not yet own PD(L) 1 bispecific antibody assets but are entering this market through licensing Chinese assets:

• In May, Pfizer paid USD 1.25 billion to acquire rights to 3SBIO's SSGJ707, with a total deal value of up to USD 6.15 billion;
• In June, BioNTech reached an USD 11.1 billion collaboration development agreement with BMS, with the project also originating from the Chinese startup Biotheus.

HSBC expects more transactions to follow, with first-mover advantages playing a key role in market competition.

Who Will Be the Next "Keytruda"?

Several leading companies are actively advancing clinical development, with reports indicating:

• AKESO's AK112 and AK104 are undergoing more than ten global and Chinese Phase III clinical trials;
• BioNTech (Biotheus)/BMS's PM8002/BNT327 is also in Phase III, focusing on lung cancer and triple-negative breast cancer;
• 3SBIO's SSG707, Kintor Pharmaceutical's LM299, and Innovent Biologics' IBI363 are expected to initiate global Phase III trials in 2025-26.

HSBC believes that the top five companies are likely to share over 80% of the market, and the "winner takes all" effect may repeat the pattern seen with Keytruda and Opdivo.

Despite the promising outlook, PD(L) 1 bsAb still faces challenges: the complexity of molecular structures leading to difficulties in research and production, management of toxic side effects, and policy risks related to pharmaceutical tariffs. However, in the long term, these factors are unlikely to change the market's judgment of its "disruptiveness."