Innovent Biologics licensed ex-Greater China rights of IBI355 to Spero Therapeutics for up to $1.1 billion. CLSA raised its target price to HKD139.9 with an "Outperform" rating. The deal validates Innovent's immunology R&D capabilities and adds to a wave of cross-border pharma licensing.
Innovent Biologics licensed rights to its immunology drug IBI355 to Spero Therapeutics in a deal valued at up to $1.1 billion.
"This transaction once again reflects Innovent's strong research and development capabilities," CLSA analysts said in a note, raising the target price on the stock to HKD139.9 from HKD135.8 and maintaining an "Outperform" rating.
The deal includes upfront fees and milestone payments, with Innovent also eligible for tiered royalties on net sales. Spero, which renamed the drug SP001, plans to start a Phase 2 trial in IgG4-related disease in the second quarter of 2027. Innovent will focus on Sjögren's disease in China, with a Phase 2 trial expected early next year. The drug is an anti-CD40L antibody, a clinically validated target positioned upstream of multiple immune pathways.
Innovent shares surged as much as 11.5% to HK$100.40, crossing the HK$100 level for the first time this year and bringing year-to-date gains to about 26%. The deal adds to a wave of cross-border licensing agreements between Chinese biotechs and Western pharmaceutical companies, following AstraZeneca's recent $1.5 billion deal with Dizal Pharmaceutical and its $1.9 billion agreement with Sino Biopharmaceutical.
To fund development of SP001, Spero entered a $105 million financing agreement with Healthcare Royalty, exchanging an undisclosed portion of future royalties from its GSK-partnered antibiotic Utebzi. The deal marks a strategic pivot for Spero away from infectious disease toward immunology and inflammation, according to Chief Executive Esther Rajavelu.
The licensing agreement validates Innovent's immunology franchise and may drive further valuation re-rating of the stock and the broader China biotech sector, according to Citi analysts. Investors will watch for updates on Innovent's Sjögren's disease trial in early 2027 and Spero's IgG4-RD study in the second quarter.
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