Chinese biotechnology stocks rallied on Tuesday, driven by better-than-expected earnings from key players and investors seeking defensive sectors ahead of the looming US tariffs.

Shares of Akeso Inc., which shocked the pharmaceutical world last year when a study of its lung cancer drug showed to be more effective than Merck & Co Inc.’s blockbuster Keytruda, jumped as much as 16% to a record in Hong Kong. CSPC Pharmaceutical Group and Hutchmed China Ltd. rose more than 10% each.

The rally helped extend gains in a sector gauge traded in Hong Kong to about 35% this year, surpassing the tech index’s nearly 23% rise.

Hong Kong-listed firms including BeOne Medicines, Hutchmed, Innovent Biologics and Hansoh Pharmaceutical reported robust earnings, said Leslie Yang, a Bloomberg Intelligence analyst. “Hutchmed and Innovent have achieved profitability ahead of market expectations.”

Tuesday’s rally was also backed by an increase in licensing deals between Chinese firms and pharmaceutical majors, earning the sector the nickname “the supermarket,” where big pharma companies shop to fill pipeline gaps, Macquarie Capital’s Tony Ren and Candyce Gao wrote in a note.

Chinese biotech sector has delivered a robust performance so far in 2025, helped by on-track commercial progress, improved earnings visibility and flows from assets out-licensing, said Jialin Zhang, head of China health-care research at Nomura.

“Hong Kong biotech is getting better sentiment on acceleration trend of Chinese biotech companies out-licensing to multinational corporations,” Jefferies analyst Cui Cui said. Anticipation is also building for Akeso’s release of Harmoni-2 trial OS data at YE25, which is “the data of the year” in global biotech industry, the brokerage said.