Oct 1, 2026

1. The China phenomenon: Novo Nordisk and Hengrui

On 29 September 2026, Novo Nordisk announced an exclusive license to Hengrui Pharma’s HRS-1596, a GLP-1/GIP dual receptor agonist being developed for once-weekly oral dosing. Novo takes global rights outside mainland China, Hong Kong, Macao and Taiwan. Hengrui receives USD 300 million upfront, with total potential value of up to USD 2.6 billion plus royalties. Closing is expected in Q4 2026, subject to HSR clearance.

Three aspects of the deal merit attention. First, the stage. HRS-1596 is phase 1-ready, and no clinical data have yet been reported. A USD 300 million upfront at this point reflects the value the market leader places on a potential weekly oral format, and on securing it early rather than competing for it later.

Second, the pattern. This is Novo’s second GLP-1-class deal with a Chinese partner, following its March 2025 agreement with United Laboratories for the triple agonist UBT251. Hengrui itself has now partnered assets with Merck, GSK and Novo, among others. When the incumbent in obesity sources from China twice in eighteen months, China has become a routine part of the search process rather than an opportunistic one.

Third, the breadth of the underlying pipeline. Companies in Greater China signed 186 out-licensing deals in 2025 with a combined potential value of USD 137.7 billion, per Pharmcube data reported by Reuters. In the first half of 2026, Chinese outbound licensing reached USD 100.4 billion in disclosed value, and eight of the ten largest global licensing deals originated in China. The deals now span oncology, immunology, cardiometabolic and obesity, which suggests depth across therapeutic areas rather than concentration in one modality.

The open question is translation. Many of these assets will be judged on multiregional trial outcomes over the next three to five years. Licensors and licensees are both pricing that risk into structures that are heavy on milestones and lighter on upfront. That balance is likely to shift, in either direction, as the first wave of China-sourced assets reports global data.

2. Biosimilars: regulation is changing the economics

On 1 October 2026, Samsung Bioepis and Teva expanded their partnership to cover up to six biosimilar candidates. Two are confirmed: SB41, referencing Fasenra (benralizumab), and SB44, referencing Ilaris (canakinumab), with an option on four more. Samsung Bioepis leads development, registration and manufacturing; Teva commercialises in the US, Europe and Canada. The two companies previously brought EPYSQLI (eculizumab-aagh) to the US market.

The deal is a useful lens on a broader shift. Over the past eighteen months, three major regulated markets have moved in the same direction
on the clinical evidence required for biosimilar approval:

• Canada. Health Canada’s revised guidance states that comparative clinical efficacy studies are not typically required, and that structural and functional studies are generally more sensitive for detecting differences.
• United States. FDA’s October 2025 draft guidance sets out when a comparative efficacy study may not be needed, relying instead on comparative analytical assessment, PK similarity and immunogenicity. A March 2026 draft revision further relaxes PK study requirements, including use of non-US comparators where justified. FDA had earlier proposed that switching studies are generally no longer needed for interchangeability.
• Europe. EMA’s reflection paper on a tailored clinical approach, adopted in March 2026, accepts that analytical comparability and PK data can be sufficient under defined prerequisites.

The practical effect is on capital. Comparative efficacy studies can take one to three years and cost in the region of USD 24 million per programme. Removing them as a default shortens timelines and lowers the cost of each additional molecule. That changes portfolio arithmetic: a developer can now fund more candidates from the same budget, and target reference products with smaller revenue pools that were previously marginal.

Two consequences follow. First, analytical and manufacturing capability becomes the main differentiator, which favours developers with deep characterisation platforms and cost-competitive capacity. Second, competition per molecule is likely to increase, which places more weight on commercial reach and payer access. Multi-product development-plus-commercialisation partnerships, such as Samsung Bioepis–Teva, are a logical response to both. We expect investment appetite in biosimilars to remain steady, with capital moving toward platforms that can run several programmes in parallel.

3. Generic leaders and the move toward innovation

On 28 September 2026, Sun Pharma signed an exclusive licence with LIB Therapeutics to commercialise and manufacture lerodalcibep, a once-monthly PCSK9 inhibitor, in all markets outside the US and China. The product received EU approval on 21 September 2026 and is FDA-approved in the US as Lerochol. Sun cites IQVIA data placing the PCSK9 market outside the US and China at USD 3.7 billion, growing at 38% CAGR over the prior two years.

The deal comes five months after Sun agreed to acquire Organon for an enterprise value of USD 11.75 billion, the largest overseas acquisition by an Indian pharmaceutical company. Organon stockholders approved the transaction in July, and closing is expected in early 2027. On completion, Sun expects combined revenue of about USD 12.4 billion, a position among the top three companies in women’s health, and entry into biosimilars as a top-ten player. Read together, the two transactions show a company building scale in established brands while adding specialty assets to an innovative medicines business that grew 16.8% to USD 1.42 billion in FY26.

Sun is not alone. Zydus’s acquisition of Assertio (about USD 166 million, completed in June) gave it a US specialty oncology platform, and Aurobindo’s Acrotech Biopharma has just launched in-licensed AdQuey (difamilast, from Otsuka) in the US alongside a new dermatology unit.

The common thread is not a move away from generics. Generics remain the base business engine for each of these companies, and it is that engine — cash flow, manufacturing scale, regulatory track record and US commercial infrastructure — that makes an innovative portfolio possible. What is being added is a layer on top: capital allocated to specialty and innovative assets, mainly by in-licensing late-stage or approved products and acquiring small commercial platforms that can absorb more. This limits early development risk while building the capabilities needed for the next step.

Over the coming decade, we expect more large Indian companies to follow this path, with the innovative layer drawing on a combination of in-house and in-licensed assets. The real test will be sustained capital allocation to a business layer whose risk profile differs from the generics base: longer payback periods, binary clinical and launch outcomes, and the discipline to keep investing through cycles.

Sathguru deals update

API consolidation: RPG Life Sciences and Raghava Life Sciences

In September 2026, RPG Active Pharma, a wholly owned subsidiary of RPG Life Sciences, agreed to acquire the API and intermediates business of Raghava Life Sciences on a going-concern basis through a slump sale. The business adds 29 API molecules (22 commercial, seven in development) and about 300 KL of installed capacity. It follows RPG’s July carve-out of its API business into RPG Active Pharma, with InvAscent coming in as an investor, and the earlier acquisition of Actis Generics. With both additions, RPG Active Pharma’s API capacity rises from about 110 KL to about 505 KL. The stated intent is a buy-and-build strategy toward an integrated, scaled API organisation.

We see APIs as a value chain node where significant investment at scale is likely across geographies over the coming years. Supply chain resilience is now a planning priority for governments and buyers alike, and that will favour more regional capacity in North America, Europe and other markets, alongside continued investment in India. At the same time, cost competitiveness will remain decisive. Companies will invest in technologies such as biocatalysis and continuous manufacturing to reduce cost, improve yields and lower environmental footprint. Fragmented Indian API capacity, combined with private capital looking for platforms, makes consolidation a logical route to the scale these investments require. We expect this landscape to change substantially over the next five years.

I will be discussing these themes on a panel at CPHI Milan, 6–8 October 2026. If you are attending, I would welcome you to join the session.

Global out-licensing of Exblifep

Sathguru is leading the global out-licensing of Exblifep (cefepime/enmetazobactam), an intravenous combination of a fourth-generation cephalosporin with a novel extended-spectrum beta-lactamase inhibitor. The product is approved by the US FDA for complicated urinary tract infections, including pyelonephritis, with a five-year exclusivity extension under the GAIN Act. It is also authorised in the European Union. In the phase 3 ALLIUM trial of more than 1,000 patients, it met criteria for superiority over piperacillin/tazobactam on clinical cure and microbiological eradication.

As we move toward closing agreements in several regions, I am enthused by the level of industry engagement in novel antibiotics and antimicrobial resistance. In addition to carbapenem-resistant infections, there is growing recognition of targeted novel antibiotics that are active against ESBL- and AmpC-producing gram-negative organisms, and that can therefore spare the use of carbapenems. Reducing carbapenem exposure is one of the more practical levers available to slow the emergence of carbapenem resistance, and stewardship programmes increasingly reflect this.

We would welcome expressions of interest from companies for whom Exblifep is of strategic relevance, particularly those with hospital and critical care portfolios in markets where it is not yet partnered. Please write to us to start a conversation.

Closing thought

The deals of the past few weeks share a common logic. Companies are reallocating capital toward where they see durable advantage: early innovation sourced globally, development models that regulators now allow to be leaner, specialty portfolios built through licensing and targeted acquisition, and manufacturing platforms with the scale to invest in new technology. Each of these will be tested by execution over the next several years. At Sathguru, we continue to enjoy the work of enabling and catalysing this transformation across each of these vectors.