In Q1 2026, out-licensing of Chinese innovative drugs maintained robust growth, featuring structural characteristics of high concentration, high transaction value and high quality.

Overall, mega-deals have become frequent with a pronounced concentration among leading enterprises. According to incomplete statistics, there were 15 transactions worth over 1 billion US dollars each in the first quarter, with the total potential cumulative deal value surpassing 540 billion US dollars. Capital and resources are highly concentrated on a small number of core assets with global competitiveness.

Transactions are intensely focused on four technological tracks: GLP-1, ADCs, bispecific antibodies, and nucleic acid therapeutics. The BD boom is not an across-the-board industry upturn, but a structural surge in these four sectors. Notably, China holds a leading global position in three of the four tracks.

GLP-1 has emerged as the most valuable track. The collaboration between CSPC Pharmaceutical Group and AstraZeneca reached a total value of 18.5 billion US dollars, including a 1.2 billion US dollar upfront payment, marking the largest single BD transaction since 2026. This fully reflects the strategic scarcity and pricing power of GLP-1 assets.

GLP-1 has become the core gateway to the trillion-dollar weight management market. Novo Nordisk and Eli Lilly have risen to the top of global pharmaceutical market capitalization thanks to this track. Lacking in-house GLP-1 pipelines, AstraZeneca has to fill its strategic gap through external licensing, with China as virtually its only sourcing option — Chinese players boast the fastest clinical progression and the most prominent cost advantages in this field.

ADCs remain one of the core engines driving the global expansion of Chinese innovative assets. Data from Evaluate indicates that 51% of global clinical trials for ADCs involve products developed by Chinese pharmaceutical enterprises, meaning one out of every two global ADC pipeline candidates originates from China.

With IO+ADC established as the recognized next-generation mainstream for oncology treatment, Chinese innovative drugs have become essential for MNCs seeking strategic asset supplementation. To date, the world’s top 10 MNCs have sealed around 20 deals with Chinese innovative drug companies in the ADC sector, covering nearly 30 pipelines — almost every leading MNC now holds Chinese ADC assets in their portfolios.

On January 9, 2026, Roche signed another deal with LianBio, its long-term partner, involving a 570 million US dollar upfront payment to jointly advance the development and commercialization of B7H3 ADC candidate YL201. LianBio retains commercial rights in mainland China. This marks Roche’s third major ADC collaboration since 2025 and the second partnership with LianBio in less than two years.

Bispecific antibodies deliver the most stable cash flow. In the first quarter, three domestic bispecific antibody products completed global out-licensing: ATG-201 from Decheng Therapeutics, SIM0709 from Simcere Pharmaceutical, and RC148 from RemeGen. Their combined total transaction value reached 8.022 billion US dollars, with aggregate upfront payments of 759 million US dollars.

The landmark 5.6 billion US dollar collaboration between RemeGen and AbbVie is particularly significant. The PD-(L)1/VEGF bispecific antibody track it represents has become a classic model for Chinese new drugs going global. From Cadence Therapeutics’ Ivonescimab in 2022 to RemeGen’s RC148 in Q1 2026, PD-(L)1/VEGF bispecific antibodies have evolved from regional highlights to core strategic assets in global oncology.

Domestic pharmaceutical enterprises have achieved leaps and bounds in the bispecific antibody sector in recent years, progressing from early product introduction and follow-on innovation to original discovery. Multiple candidates have secured approvals or entered late-stage global clinical trials. Currently, nearly 70% of bispecific antibody pipelines in global Phase III clinical trials and registration applications are developed by Chinese companies.

Following ADCs, bispecific antibodies and GLP-1, the spotlight in the 2026 innovative drug industry has suddenly shifted to nucleic acid therapeutics — a disruptive field with long-term accumulated potential.

Continuing the momentum of nucleic acid drug out-licensing last year, BD activities in China’s nucleic acid sector have surged further in 2026. Three nucleic acid projects completed out-licensing in Q1 alone, with a combined deal value exceeding the total licensing volume of the past five years.

These three transactions feature record-high values for the sector and were sealed in quick succession with top-tier partners including Genentech, Madrigal and GSK, fully demonstrating global recognition of the strategic value of Chinese nucleic acid assets.

Although China’s nucleic acid industry started later and still faces technological gaps with global leaders such as Alnylam, domestic companies are accelerating breakthroughs via a curve-overtaking strategy. Instead of competing head-on with overseas giants in rare diseases, Chinese enterprises prioritize chronic disease tracks with massive patient populations worth hundreds of billions, such as MASH and hyperlipidemia, to build differentiated competitive advantages rapidly.

Innovative Drug BD: The End of the Low-Pri

More notably, alongside normalized development, Chinese innovative drug out-licensing shows clear signs of growth in both volume and value.

According to PharmaCube data, the average upfront payment for Chinese innovative drug BD deals reached 184 million US dollars in Q1 2026, with an average total deal value exceeding 2.7 billion US dollars — both hitting historic highs, representing a year-on-year increase of approximately 59% and 46% compared with 2025, and a staggering 187% and 150% rise from 2022.

FierceBiotech highlighted this trend in a February 2026 report, citing Evaluate data that the average upfront payment for licensing deals between overseas pharmaceutical companies and Chinese biotechs has skyrocketed 230% from 52 million US dollars in 2022 to 172 million US dollars year-to-date in 2026.

Moreover, the average upfront payment in the first two months of 2026 is 22% higher than the full-year average for 2025. FierceBiotech predicted that if current transaction value trends hold steady, upfront payments for licensing collaborations involving Chinese innovative drug enterprises will continue to climb throughout 2026.

Mark Lansdell, Head of Asset Strategy at Evaluate, offered a clear judgment on overseas licensing of Chinese innovative assets: Chinese innovative drug BD transactions have bid farewell to the low-price era. "China is no longer a bargain basement," he stated.

The number of Chinese innovative drug BD deals has risen steadily in recent years, and transaction values have completely reshaped market perceptions of Chinese technology licensing collaborations.

Lansdell noted that cross-border licensing deals for Chinese biotech products surged from 42 in 2022 to 93 in 2025, a 120% increase. Meanwhile, total upfront payments for these transactions jumped from 1.1 billion US dollars in 2022 to 5.6 billion US dollars in 2025, a roughly 400% growth.

More detailed data from Guosen Securities shows that among the total 264.5 billion US dollars in transactions sealed by MNCs in 2025, upfront payments (including one-off cash/stock acquisition payments) stood at 107.4 billion US dollars, with 95 billion US dollars for M&A and 12.4 billion US dollars for BD collaborations — another all-time high.

"Chinese companies now command upfront payment terms on par with their global peers," Lansdell explained. "Overseas pharmaceutical firms once secured highly cost-effective collaboration terms, but as the market recognizes the global value of Chinese innovative assets, pricing has risen accordingly."

Once upon a time, "low cost" was an indelible stereotype attached to Chinese innovative drugs. Back then, China’s innovative pharmaceutical industry had just built technological barriers, with limited global visibility and overseas experience, leaving MNCs in a dominant position during negotiations.

China’s biopharmaceutical sector has achieved three major leaps: from providing outsourcing services and conducting clinical trials, to licensing self-developed pipelines, and ultimately selling core clinical-stage assets in full. This has revolutionized China’s role in the global industry.

China has become a leader in several high-profile tracks. Per Evaluate data, Chinese assets account for 48% of all clinical-stage bispecific antibody pipelines, and 51% of ADC clinical trials feature Chinese-developed products. Even in the highly technical CAR-T sector, 48% of candidate therapies incorporate Chinese-origin assets.

"Even when overseas pharmaceutical companies do not actively source partnerships in China, most candidate assets screened for pipeline expansion in these innovative fields come from Chinese biotechs," Lansdell added.

The global prevalence of these innovative assets means MNCs can hardly bypass China when expanding their pipelines. Despite rising prices, alternative options remain scarce for buyers.

Overall, 2026 remains a landmark year for global innovative drug collaborations, as Chinese pharmaceutical enterprises undergo a restructuring of their global valuation system, with early-stage R&D platform capabilities becoming core pricing determinants.

For small molecules and antibody drugs — fields where China’s innovation capacity and quality are well-proven — overseas pharmaceutical companies are offering higher premiums and engaging in longer-term, systematic partnerships with Chinese counterparts. Among the top three largest total-value deals sealed so far in 2026, two involve platform-based capability collaborations beyond single-asset licensing.

Building on multiple prior small molecule collaborations with CSPC Pharmaceutical Group, AstraZeneca fully recognizes and trusts CSPC’s AI-driven drug discovery platform and its robust long-acting delivery technology portfolio. This led to the record-breaking BD deal in early 2026: a 1.2 billion US dollar upfront payment and a total potential value of 18.5 billion US dollars for multi-project early-stage AI collaboration on long-acting peptide drugs.

Similarly, Eli Lilly entered a strategic partnership with Innovent Biologics in 2026 worth 350 million US dollars upfront with milestone payments up to 8.5 billion US dollars. The two parties will collaborate on early target discovery in oncology and autoimmune diseases. Innovent will lead drug discovery through Phase II clinical proof-of-concept in China leveraging its antibody platform and clinical expertise, while Lilly oversees global development and commercialization outside Greater China.

This partnership breaks traditional licensing models, integrating Innovent’s early R&D strengths with Lilly’s global footprint to form an efficient collaborative framework for worldwide drug development.

Staidson Biopharma, a leader in nucleic acid therapeutics, has gained favor with two major MNCs thanks to its proprietary LEAD™ platform. It sealed an RNAi collaboration with Eli Lilly in December 2025 featuring milestone payments of up to 1.2 billion US dollars, followed by a strategic partnership with Genentech (a Roche subsidiary) in early February 2026 with a total potential value reaching 1.7 billion US dollars.

From an industrial perspective, the value of such platforms lies not in addressing a single target, but unlocking an entire category of therapeutic targets — a capability most valued by MNCs deploying next-generation RNAi pipelines. They deploy capital to secure time, certainty and technological depth, establishing early positioning for technological competition over the next decade.

Insilico Medicine, a prominent AI drug discovery enterprise, has accelerated its BD expansion significantly in 2026. The company sealed seven out-licensing deals in Q1 2026, achieving widespread breakthroughs across core therapeutic areas in a short period.

According to Insilico Medicine’s latest 2025 financial report, it has established R&D and licensing collaborations with over 10 MNCs and leading domestic biopharma enterprises, with newly signed deals totaling 1.3 billion US dollars. Cumulative major collaboration value since 2021 has reached 4.6 billion US dollars, rising to nearly 7.5 billion US dollars when including 2026 partnerships.

As AI-driven drug discovery enters the value realization phase, Insilico Medicine is evolving into a self-sustainable benchmark enterprise for the industry.

A research report from Galaxy Securities points out that with surging transaction momentum, Chinese innovative drug global collaborations are shifting from single-product licensing to platform-level strategic partnerships. This marks a new phase of early binding, risk sharing and value co-creation between Chinese enterprises and global MNCs, highlighted by three key changes:

1. Earlier collaboration entry: MNCs now lock in partnerships at the early R&D stage instead of late clinical phases, recognizing China’s strong early discovery capabilities.
2. Deeper collaborative integration: Partnerships extend beyond single-product licensing to joint development of multiple early pipelines leveraging innovative technology platforms for long-term global strategic cooperation.
3. Restructured division of labor: Chinese enterprises lead full early R&D processes, while MNCs take charge of late-stage global development, registration and commercialization, forming an industrial ecosystem of China early R&D + global translational development.

It is foreseeable that more Chinese innovative drug enterprises will enter the era of platform-level strategic partnerships in the future, supported by differentiated target layouts, efficient clinical translation capabilities and solid clinical data. Deeply integrated with global MNCs, they will access the global market rapidly and maximize worldwide commercial returns.

Reflecting on Q1 2026: 600 billion US dollars in total transactions, 15 mega-deals exceeding 1 billion US dollars, structural breakthroughs across four core tracks, doubled transaction premiums, and revalued platform capabilities — these figures and trends collectively illustrate a profound qualitative transformation for China’s innovative pharmaceutical industry.

In the past, Chinese pharmaceutical companies primarily acted as suppliers in BD negotiations. MNCs set mature standards and selected proven assets at relatively low costs, with China’s global narrative centered on cost-effectiveness and catch-up development.

Today, the narrative has been completely rewritten.

When AstraZeneca commits a 1.2 billion US dollar upfront payment to bet on CSPC’s AI discovery platform; when Eli Lilly partners with Innovent for the seventh time; when Roche, GSK and Genentech heavily invest in Chinese nucleic acid assets within three months — MNCs’ willingness to pay, depth of collaboration and earlier engagement all confirm one core conclusion: Chinese innovative drugs have become an indispensable piece in the global strategic pharmaceutical landscape.

This transformation stems from years of dedicated accumulation by Chinese innovative drug enterprises. From outsourcing services and clinical trials, to licensing proprietary pipelines, and finally building deep platform-based partnerships with MNCs — China has completed its evolution from industry follower to global leader.

Admittedly, challenges remain at this new milestone. Early-stage collaborations carry higher clinical failure risks, milestone payment fulfillment rates remain uncertain, and product return cases remind the industry that global multi-center clinical trials pose rigorous hurdles between high market demand and full global recognition.

Nevertheless, Q1 2026 has delivered a clear message to the world: Chinese innovative drugs are no longer low-cost alternatives in the global BD landscape, but strategic assets competing alongside the world’s top pharmaceutical enterprises.

The era of normalized BD collaboration has arrived — and Chinese innovative drugs are standing firmly at its new starting point.