What's Happening?
A recent report by analytics firm Pitchbook highlights the growing influence of China's biotech industry in the global pharmaceutical landscape. The report indicates that licensing deals between Chinese biopharmaceutical companies and their U.S. and European
counterparts are expected to continue and expand in 2026. China's biotech sector has gained a significant lead in developing early-stage drug candidates, a trend that is likely to persist due to underfunding in other markets and increased self-sufficiency within China. Historically, these licensing deals have focused on antibody drugs for cancer, but future collaborations may include obesity programs, cell and gene therapies, and targeted delivery technologies. In 2025, nearly 50% of venture deal activity in China involved advanced modalities like nucleic acid-based assets and cell and gene therapy prospects.
Why It's Important?
The expansion of China's biotech industry and its increasing number of licensing deals with Western companies have significant implications for the global pharmaceutical market. These partnerships allow Western drugmakers to access innovative Chinese medicines at a lower cost compared to full mergers and acquisitions. The trend also reflects a growing global trust in China-originated medicines, as evidenced by the increasing number of first-in-human trials for next-generation antibodies conducted in China. This shift could lead to more competitive pricing and faster development of new therapies, benefiting patients worldwide. Additionally, the reliance on external innovation due to rising U.S. costs and funding constraints may further entrench China's advantage in early-stage drug development.
What's Next?
As the trend of cross-border licensing deals continues, it is expected that antibody-focused dealmaking, particularly for cancer drugs, will remain prominent. However, there is also an anticipated increase in interest from investors and large pharmaceutical companies in cell and gene therapy assets. The combination of progress in China's biotech sector and a funding downturn in the U.S. could make international partnerships more attractive. This dynamic may lead to a sustained advantage for China in early-stage drug development, potentially reshaping the global pharmaceutical pipeline over the next several years.
