[China Shock, K-Industry on the Brink | Biotech] 1. Big Pharma Sweeps Up Chinese Drug Candidates in Bulk

Analysis of 104 Chinese Licensing-Out Deals Finds
Share of Multi-Asset Deals Rose from 32% to 43%
Big Pharma Focuses on Ability to Develop Follow-On Drugs

Editor's NoteAs China's industrial rise rapidly expands into new areas, its growing clout in biotechnology is becoming increasingly apparent. In recent years, China has repeatedly achieved unprecedented or highly remarkable results in technology deals for drug candidates with global big pharma companies, comfortably overtaking competitors, including South Korea. This series examines where China's strength comes from and how South Korea, once a leader over China thanks to the trust it built across the global industry, should respond going forward.

1. Big Pharma Sweeps Up Chinese Drug Programs in Bulk

2. Hard to Sell Even One Asset, but China Sells Again and Again

3. Chinese Drug Sold for $8.4 Billion: The Results Three Years Later

4. Can South Korea Endure the Grueling Late-Stage Development Race?

Global big pharma companies' views of Chinese biopharmaceutical technology have changed rapidly in recent years. Bold technology deals securing multiple drug candidates and drug discovery platforms at once have become increasingly common. Given the industry's precarious dealmaking practices, in which companies often buy a single candidate only to terminate the deal at the risk of losing the upfront payment if even a minor problem arises, this trend suggests that Chinese biopharmaceutical technology is now highly valued in the global market.

An analysis by The Asia Business Daily of 104 Chinese biotech companies' licensing-out deals with global big pharma companies, each worth at least $1 billion (approximately KRW 1.338 trillion), over the past three years, based on related disclosures and announcements, found that the share of deals bundling two or more assets or programs, or including a drug discovery platform, rose from 31.8% in 2024 to 43.2% in the first nine months of this year. The share of potential deal value accounted for by these types of deals grew from 46.6% to 68.6% over the same period. That share could rise further once the results of fourth-quarter deals this year are included.

A deal between U.S. company Bristol Myers Squibb (BMS) and China's Jiangsu Hengrui Pharmaceuticals is one example. In May this year, BMS signed a licensing-in deal with Hengrui worth up to $15.2 billion (approximately KRW 20.3376 trillion). The agreement covers 13 drug programs, five of which do not yet have a designated drug candidate. In effect, BMS is betting on the possibility of discovering drug candidates together in the future.

China's share of the global technology deal market has also grown. According to Boston Consulting Group (BCG), China-related deals accounted for 5% of the value of global licensing deals in 2019-2021, rising to 27% in 2022-2024. By December 1 last year, they accounted for 48%, exceeding the United States' 29%.

According to market research firm IQVIA, Chinese companies accounted for 40% of the assets licensed in from external sources by global big pharma companies last year, as the original developers. That was a sharp increase in just one year from less than 30% in 2024. The potential value of deals to license in Chinese-made therapies more than doubled, from $45 billion (approximately KRW 60.21 trillion) in 2024 to $105 billion (approximately KRW 140.49 trillion) last year, and reached $92 billion (approximately KRW 123.096 trillion) in the first half of this year alone.

In May this year, Pfizer signed a deal worth up to $10.5 billion (approximately KRW 14.049 trillion) with China's Innovent Biologics, securing 12 early-stage cancer drug programs at once. Negotiations began at the J.P. Morgan Healthcare Conference in San Francisco in January this year and took less than five months.

After the deal, Innovent Biologics CEO Michael Yu said, "Pfizer preferred a single multi-asset deal from the outset." Rather than discovering, conducting due diligence on, and contracting for each of the 12 candidates individually, Pfizer secured several pipelines from one company in a single deal. Once Innovent Biologics develops each candidate through Phase 1 clinical trials, Pfizer will lead global development. For some assets, the companies will share development costs in the United States and Europe and split sales profits.

The funds global pharmaceutical companies are putting into China are not limited to licensing in new drugs. AstraZeneca has pledged to invest $15 billion (approximately KRW 20.07 trillion) in China by 2030 to expand its drug discovery, clinical development, and manufacturing capabilities. It plans to expand its research and development (R&D) centers in Beijing and Shanghai, while also investing in manufacturing facilities in Wuxi, Taizhou, Qingdao, and Beijing. Since 2023, the company has signed 16 global licensing deals with 15 Chinese companies. It is both acquiring promising candidates from external sources and expanding its local R&D base.

Global big pharma companies are broadening their criteria for evaluating Chinese companies, moving beyond the clinical data for individual candidates to include their ability to generate follow-on pipelines. The inclusion of not only existing candidates but also programs to be discovered in the future in licensing deals reflects this shift. An industry insider in South Korea's biopharmaceutical sector said, "When a company believes that one company can continue to produce promising candidates, demand arises to secure its discovery system and follow-on pipelines in advance, rather than signing deals for individual assets alone."

This content was produced with the assistance of AI translation services.