Last month, Hengrui Pharmaceuticals announced a blockbuster licensing deal with GSK worth up to USD 12.5 billion, with an upfront payment of USD 500 million. The deal grants GSK the overseas rights to Hengrui’s HRS-9821 as well as exclusive options for 11 additional early-stage innovative programs.
Among the 11 preclinical assets, HRS-9821 stands out as the most valuable. Designed to treat chronic obstructive pulmonary disease (COPD), the PDE3 and 4 inhibitor received clinical trial approval only earlier this July. Despite spending just RMB 38.43 million (USD 5.4 million) on development, Hengrui secured the entire USD 500 million upfront for this single asset, representing a textbook case of low cost and high reward.
That outcome is tied to growing momentum around novel COPD treatments.
As a major chronic condition, COPD represented a global market exceeding USD 20 billion by 2024. Yet there had been no new drug classes in over a decade until June 2023, when the US FDA approved ensifentrine, the first COPD therapy with a new mechanism of action. Developed by UK-based Verona Pharma, ensifentrine is a PDE3 and 4 inhibitor. In July, MSD moved quickly to acquire Verona for USD 10 billion.
GSK, long known for its leadership in respiratory medicine, faces the looming patent expiration for its COPD blockbuster Trelegy Ellipta. A big-ticket licensing deal for a next-generation pipeline asset makes strategic sense.
And it’s this Hengrui-GSK deal that has prompted many Chinese pharmaceutical companies to reevaluate the potential beyond hot fields like oncology and autoimmune disease. In the search for value within treatments for common and chronic conditions, respiratory drugs, once considered a slow burn, may finally be having their moment.
The ripple effect of a validated mechanism
It’s not unlike what happened with Novartis’ inclisiran injection for lowering LDL cholesterol or Eisai’s gout drug dotinurad, which targets URAT1. Once a validated target emerges, other companies rush to stake their claim, either through internal R&D or by acquiring peer pipelines. This time, the spotlight has landed on PDE3 and 4.
COPD is a progressive and irreversible lung disease marked by symptoms like breathlessness and chronic cough. Major risk factors include smoke, dust, and chemical fumes. Since humans first picked up smoking, COPD has become a common diagnosis in respiratory medicine and the world’s fourth leading cause of death. China holds the highest COPD mortality rate globally. Yet public awareness remains low, and many patients are only diagnosed once their health and quality of life have already taken a hit.
From an industry perspective, the COPD treatment market has long been dominated by multinational players such as AstraZeneca, GSK, and Boehringer Ingelheim. The standard of care typically relies on long-acting beta agonists (LABA), long-acting muscarinic antagonists (LAMA), and inhaled corticosteroids (ICS).
These therapies mostly address symptoms, with limited effect on the disease’s underlying inflammation or progression. The once-popular triple combo of LABA, LAMA, and ICS was seen as the treatment ceiling. GSK’s Trelegy Ellipta, a leading example, posted GBP 675 million (USD 894.7 million) in first-quarter sales this year, up 15% year-on-year.
Still, such steroid-heavy approaches fail to meet the needs of all patients, especially the roughly 50% who experience persistent acute exacerbations.
That’s where science has started catching up. As understanding of COPD pathogenesis advances, more mechanism-based treatments are emerging. Much of the recent interest in PDE3 and 4 inhibitors stems from the breakthrough of ensifentrine.
In COPD, reducing acute exacerbation events is a critical measure of therapeutic efficacy. Clinical trials have shown that Ensifentrine can reduce moderate-to-severe exacerbation rates by 36–43%.
As a result, its commercial performance has been strong. In the six months following its 2024 launch, Ensifentrine generated USD 42 million in revenue; by Q1 2025, that figure had climbed to USD 71.3 million. Forecasts suggest peak annual sales could reach USD 4 billion by 2035.
“The surge in demand for PDE3 and 4 inhibitors stems in part from the lack of new mechanisms in COPD, and in part from their unique pharmacology,” said a source involved in COPD drug development.
Phosphodiesterases are found across many inflammatory cells in the human body, with 11 known subtypes. Inhibiting PDE3 helps dilate airways, while PDE4 inhibition reduces inflammation.
“The industry used to focus heavily on PDE4’s anti-inflammatory effects. There were many PDE4-targeted programs in the works. But PDE3’s bronchodilation is more immediately impactful,” the same source noted. “Patients feel real relief when their airways open up. Unlike typical COPD drugs that may take two to three months to show efficacy, PDE3’s fast-acting relief means physicians can evaluate drug response within weeks. Ensifentrine’s dual action, through rapid bronchodilation plus anti-inflammation, and its high affinity for PDE3 over PDE4 are key to its rapid uptake.”
That said, COPD is a graveyard for drug development. Even giants like Sanofi and Roche have suffered costly failures. That context makes the HRS-9821 deal all the more noteworthy, as there are few compounds entering clinical trials that command USD 500 million in upfront payments.
With HRS-9821 out of the running, the remaining PDE3 and 4 licensing opportunities in COPD are mostly accounted for, and likely to be dominated by Chinese players, who now lead in pipeline maturity.
In fact, fellow Chinese companies Chia Tai Tianqing and Haisco are ahead of Hengrui in clinical progress. Tianqing’s TQC3721 entered Phase 3 trials and was granted breakthrough therapy designation by China’s Center for Drug Evaluation (CDE) just this July 29. Haisco’s HSK39004 is in Phase 2.
From a buyer’s perspective, MSD and GSK have just entered the race. Roche and Sanofi have COPD biologics in development, including Sanofi’s dupilumab, which was only recently approved for COPD. Pfizer, Johnson & Johnson, and Novartis have been less active in this space. Whether they will join remains to be seen. Beyond GSK, Boehringer Ingelheim and AstraZeneca may be the ones to watch for future PDE3 and 4 deals.
Who else has a shot?
Still, even with PDE3 and 4 validated, it won’t be the only game in town for next-generation COPD treatments. In recent years, biologics have gained momentum in this space.
While COPD’s pathogenesis remains incompletely understood, chronic inflammation is widely considered central, especially inflammation driven by elevated eosinophil levels via the Th2 pathway. This has led to an influx of immunosuppressive and immune-targeting therapies, including those aimed at interleukin-4 receptor subunit alpha, interleukin-5, interleukin-33, and TSLP (thymic stromal lymphopoietin).
Some of these mechanisms have already produced market-ready drugs, mostly from multinational firms.
For example, dupilumab (targeting interleukin-4 receptor subunit alpha) is already a blockbuster for atopic dermatitis and asthma. In 2024, it surpassed USD 14 billion in annual sales. Clinical results show it can reduce moderate and severe COPD exacerbations by 30–34%.
Another key product is mepolizumab, an interleukin-5 inhibitor developed by GSK. Approved by the US Food and Drug Administration in May for COPD, its efficacy trails that of dupilumab but still contributes to a broader treatment landscape.
Industry insiders also point to TSLP as an emerging target. Although no TSLP-targeting COPD drugs have been approved yet, the molecule sits at the top of multiple inflammatory cascades. It activates dendritic cells, promotes Th2 cell maturation, and affects a wide range of innate immune cells.
Several TSLP-targeting compounds are in clinical trials. The most advanced is tezepelumab from AstraZeneca and Amgen. Phase 2 data suggest it may be effective in a broader COPD population than dupilumab. The FDA has already granted it breakthrough therapy designation.
Meanwhile, cutting-edge platforms like cell therapy are also gaining interest. One developer noted that while most COPD biologics work by inhibiting fibrosis and inflammation to improve airflow, they can’t reverse irreversible structural damage in the lungs. Once the disease progresses, many patients lose their ventilatory capacity.
Stem cell therapy could address this by repairing alveolar structures at the epithelial base of the airway, potentially reversing lung fibrosis and restoring ventilation. Earlier this year, authorities in Boao, Hainan, publicly released pricing guidelines for stem cell therapy, setting the cost of a single COPD treatment at RMB 150,000 (USD 21,000).
Still, pricing remains a common issue across new COPD treatments. Ensifentrine, for example, costs USD 3,000 per month in the US. Traditional therapies, by contrast, often run just a few hundred RMB per month.
In the future, a tiered approach to COPD treatment may take shape: conventional drugs will continue to serve as the foundation, while innovative therapies will target difficult-to-treat populations, driving more efficient, stratified development across the COPD market.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Hu Xiangyun for 36Kr.