Sandoz Expands Biosimilar Pipeline with $322M Henlius Deal

What happened

Sandoz Group AG signed a strategic collaboration agreement with Shanghai Henlius Biotech covering up to 10 biosimilar products, with milestone-based payments totaling up to $322 million. The deal includes three initial assets: HLX05-N (proposed cetuximab biosimilar for metastatic colorectal cancer and head/neck cancer), HLX16 (proposed evolocumab biosimilar for hypercholesterolemia), and a proposed belimumab biosimilar for lupus. Sandoz also secured an option for HLXTE-HAase1001, a recombinant human hyaluronidase that could enable subcutaneous administration of biosimilars. Under the agreement, Henlius will handle development, manufacturing, and supply, while Sandoz gains exclusive commercialization rights outside China. Henlius expects up to $100.5 million in invoiced revenue from the deal in 2026. The collaboration builds on a previous April 2025 partnership for HLX13, an ipilimumab biosimilar. Sandoz's biosimilar pipeline now stands at 39 assets, with potential to reach 46.

Why it matters

For Novartis investors, this deal signals competitive pressure in the biosimilars market, where peer Sandoz (spun off from Novartis in 2023) is aggressively expanding its pipeline. The agreement is described as one of Sandoz's largest biosimilar partnerships and positions the company to compete for market share as major biologic drugs lose patent protection. The deal targets high-value therapeutic areas including oncology (cetuximab, with reference drug Erbitux generating $1.7 billion in 2025 sales), cardiovascular disease (evolocumab/Repatha), and autoimmune disorders (belimumab/Benlysta). Sandoz CEO Richard Saynor emphasized the company's commitment to capturing the unprecedented biosimilar market opportunity ahead, while Jefferies analysts expect further in-licensing activity to fill an upcoming industry pipeline void. The financial structure includes upfront payments, development milestones, commercial milestones, and a 40% share of net sales or net profits in respective territories, creating significant revenue potential if the biosimilars reach market.

Bigger picture

The pharmaceutical industry is approaching one of its largest patent cliffs in history. A 2025 GlobalData report projected that only 4% of global drug sales will be under patent protection in 2030, down from 12% in 2022. This creates massive opportunity for biosimilar manufacturers like Sandoz to offer more affordable alternatives to expensive biologic therapies. The deal reflects broader industry trends toward strategic partnerships between Western pharmaceutical companies and Chinese biotech firms with advanced biologics manufacturing capabilities. Henlius brings integrated biologics platform expertise, while Sandoz contributes global commercialization reach across 100 countries serving more than 1 billion patients. The collaboration model-combining early-stage development partnership with global market access-represents an efficient strategy for accelerating biosimilar pipelines. Competitors including Amgen, Pfizer, and other biosimilar specialists are similarly racing to build portfolios ahead of major biologic patent expirations.

What to watch

Monitor clinical progress of the three initial assets, particularly HLX05-N, which dosed its first patient in a Phase I study in July 2026 for metastatic colorectal cancer in China. Track whether Sandoz exercises its option for the hyaluronidase technology and announces additional products from the potential 10-asset pipeline. Watch for regulatory submissions in key markets including the US, EU, and Japan. Observe whether Henlius achieves the expected $100.5 million in invoiced revenue in 2026 as an indicator of deal execution. Monitor competitive dynamics as other biosimilar manufacturers announce similar partnerships or product launches targeting the same reference drugs. Finally, track Sandoz's broader in-licensing activity, which Jefferies analysts expect to continue as the company fills its pipeline ahead of the major patent cliff opportunity through 2030.