When the global industrial landscape begins to loosen, the first to feel the change is often the flow of capital.

Over the past five years, almost every industry considered strategically significant, such as chips, rare earths, and electric vehicles, has undergone a sharp contraction from globalization to regionalization. The United States delineates its borders with the Chip and Science Act, while the European Union builds walls with the Critical Raw Materials Act. Supply chain security replaces efficiency as a priority and has become a core proposition of industrial policies in various countries.

But biopharmaceuticals provide an almost opposite example: Washington continues to tighten the gates of technology transfer to China, while multinational pharmaceutical companies and investment institutions are accelerating the integration of innovative molecules discovered in China into their global development systems.

By 2025, the total amount of overseas BD transactions for Chinese innovative drugs will exceed 130 billion US dollars, and about 34% of the world's pipeline under development will come from China. Undoubtedly, China has grown from a peripheral participant in the global pharmaceutical value chain to an indispensable core supplier.

Behind this explosive growth, the trend of top biopharmaceutical investment funds is particularly noteworthy. An interview with Rod Wong, Chief Investment Officer of RTW Investments, provides an observation coordinate from top global capital.

01、From "Capital Bureau" to "Chinese Elements"

RTW Investments is a professional investment fund headquartered in New York, managing nearly $10 billion. More than half of its investments in creating new companies this year have focused on Chinese assets.

In the layout of RTW, the incremental attribute of Chinese assets is much greater than the substitutive attribute, and the investment scale in the United States has not decreased. The Chinese part is completely the bigger cake. Wong mentioned that on average, Chinese assets are more mature and have typically passed patient testing and completed concept validation.
Science itself is extremely difficult, and projects that can cross the initial threshold are already scarce, and China provides more such opportunities. The investment map of RTW in China confirms this judgment.

As a cornerstone investor, RTW has helped Kolombotai and Jinfang Pharmaceutical complete their IPOs, and has continued to increase its holdings in Zaiding Pharmaceutical; In the primary market, RTW, as one of the founding investors of Hengrui Pharmaceutical NewCo (also known as Kailera Therapeutics), deeply participated in its Series A and Series B financing. In addition, several companies invested by RTW have been acquired by multinational giants: Centessa was acquired by Eli Lilly for $7.8 billion, while Merus was acquired by Genmab for $8 billion. These transactions form a coherent exit path, mutually reinforcing each other.

It is worth mentioning that five years ago, when domestic biopharmaceutical capital surged, the RTW model was to introduce high-quality overseas assets into Chinese companies for incubation, following the path of "technology input".

Now this path has been completely reversed - obtaining molecules in China, borrowing on NASDAQ, and raising funds on Wall Street have become the new standard process.

But against the backdrop of increasingly tumultuous geopolitical narratives, cross-border business transactions can easily be portrayed as a zero sum game, as if China wins and the United States loses. According to RTW's statement, this is actually a multi-party win-win value distribution structure, and the United States has already occupied the most lucrative position in this structure.

According to public data, in 2025, Chinese pharmaceutical companies will receive a total of $4.71 billion in MNC down payments, a year-on-year increase of 195.1%, accounting for 67% of all BD down payments for the year. These funds flowed back to China, further nurturing early research and development, forming a positive cycle. The larger scale long tail revenue, namely the sales share and profits after the drug is launched, is deposited in the hands of multinational corporations with global sales networks and commercialization capabilities, most of which are American and European giants.

The support for the operation of the above model is the continuously expanding supply pool of China's innovative pharmaceutical industry.

According to data from the Medical Magic Cube, by the end of 2025, the number of new drugs under development by Chinese companies has reached 4751, contributing about 34% of the global pipeline under development. There are 827 original drugs that will enter clinical trials for the first time in 2025, accounting for 47.4% of the global total. This volume is no longer easily isolated by any single market.

02、Speed Competition

The speed and scale advantages accumulated by China in the early stage of clinical concept validation are changing the weight of capital allocation.

According to data from the National Medical Products Administration, in 2025, a total of 1088 new drug clinical trials in China signed the first subject informed consent form, with an average start-up time of only 6.8 months, which is 4 months shorter than in 2024. The proportion of trials that signed the first informed consent form within 6 months was as high as 74.2%. At present, the number of Phase I clinical trials of innovative drugs in China has ranked first in the world.

Global capital allocation is considering regulatory efficiency as a core factor, and China's structural advantage in the "speed race" has been quantified by capital. However, with the acceleration of the globalization process of innovative drugs in China, one argument that cannot be dispelled is the accusation of "following the trend" and even "IP infringement" of Chinese assets.

Wong refuted this by using PD-1 as an example. He mentioned that ten years ago, there were over 100 true "knockoff versions" of PD-1 in China, and today the US market is still dominated by Merck and Bristol Myers Squibb, with strong regulatory and commercial ecosystems capable of effective filtering.

In fact, only Chinese assets with truly differentiated value can remain on the international competitive stage through global regulation and commercial filtering. Investors or drug developers are not willing to take the risk of investing funds and resources in drugs that are undifferentiated and of no value to American patients, "Wong added.

BeiGene's Zebutinib is the best proof. As China's first innovative drug approved in the United States and the first domestically produced blockbuster drug, this drug has contributed over 6.4 billion US dollars in cumulative revenue since its launch. In the first half of 2025, its market share in the BTK inhibitor field has surpassed Ibrutinib and jumped to the top in the world. In the same year, four innovative pharmaceutical companies, BeiGene, Xinda Biotechnology, Rongchang Biotechnology, and Nuocheng Jianhua, simultaneously turned losses into profits.

03、The cracks of protectionism

As the status of domestically produced innovative drugs continues to rise, there is a political push to bring the pharmaceutical supply chain back globally.

In March 2025, the European Commission passed the "Essential Medicines Act" with the intention of incorporating supply safety standards in public procurement and reducing reliance on third countries.

In the United States, restrictive measures go even further. After the US Chip and Science Act authorized $280 billion to boost the domestic semiconductor industry, there have been constant calls for the pharmaceutical industry to follow suit and establish similar laws. The COINS Act, which came into effect in December 2025, established a system for reviewing foreign investments. In June 2026, the two parties jointly proposed to add biotechnology to the screening list for outbound investments. Once approved, BD transactions, joint ventures, and equity investments between Chinese and American pharmaceutical companies may face direct restrictions.

The voices refuting protectionism also come from within the industry. Wong pointed out that comparing Chinese biotechnology to electric vehicles is not appropriate. Americans may not need cheap electric vehicles, but if Chinese discovered molecules are not allowed to enter the United States, it means that one-third of innovative drugs in the future will not reach American patients.

Furthermore, drugs are intellectual property, and IP and manufacturing are two completely independent and unrelated things. IP can be produced domestically in the United States, and even if the relationship between the two countries deteriorates, there will be no supply chain disruption or geopolitical security risks.

The division of factions in this game is also worth paying attention to. Wong mentioned that what the outside world hears are the voices of "losers", and the driving force for restrictions mainly comes from small, underfunded, and US only venture capitalists who are unable to incorporate China into their business models or afford the innovation costs across the Pacific. However, large multinational pharmaceutical companies and institutional investors maintain the status quo in silence because they understand that this is beneficial for American business.

The beneficiaries and losers of globalization are forming a new divide, with large capital deeply embedding Chinese assets into their own value chain, and the cost of exit far exceeds the risk of coexistence. Simple cheapness has never been the key, and the globalization of the pharmaceutical industry is rooted in the efficiency logic of transforming the best science into patient therapy at the fastest speed possible, which is more enduring than political barriers.

Reference article: 
1 RTW’s Rod Wong on how China has (and hasn’t) changed his firm’s investment strategy； endpoints
2. The optimal solution for innovative drugs at present is to go global?; snowball
3. BeiGene won a crucial battle; Economic Observation Network
4. Three domestically produced anti-cancer drugs sell at sky high prices! Xinda Biotech sets sail for 11.4 billion US dollars, deeply binding with Takeda Pharmaceuticals to break through the US market; Era Finance
5. The Medical Transcript of the Year of the 14th Five Year Plan: How far are we from becoming a pharmaceutical powerhouse?; Medical Magic Cube