Investors barely blinked at Novo’s deal, announced on Tuesday, to license an experimental weight-loss pill from China’s Hengrui Pharma, worth up to $2.6bn. They are right to be sceptical: it will take more than that for the rapidly shrinking Danish drugmaker to regain its dominance in the GLP-1 market. But the deal highlights the significant potential of the HK$333bn ($42bn) Chinese biotech that developed the drug.

In common with other groups operating in the country, Hengrui has turned itself from a maker of cheap generics into an R&D powerhouse. Its R&D spending is equivalent to 23 per cent of sales in the first half of this year. It has attracted acclaim for treatments aimed at cancer and type 2 diabetes and plans to launch more than 30 new innovative drugs between 2026 and 2027.

Hengrui has cut 13 international licensing deals since 2023, worth $42bn, including treatments to Bristol Myers Squibb and GSK. Consensus analyst forecasts call for a near-doubling of revenue by 2031, while operating profit is expected to rise to $2.7bn. Government policy is conducive, with Beijing aiming for China to produce at least a quarter of first-in-class drugs.

Hengrui deserves attention because its Hong Kong-listed shares have virtually halved in the past year. In an industry blighted with false hopes, Hengrui has the ingredients to perk up its own jaundiced investors.