After an early phase of trial and exploration, China's innovative drug BD transactions are moving toward greater conviction and continuing to heat up.

 

According to data from Pharmcube, in the first half of 2026, the number of China's License-out deals reached 96, with a total value of $99.7 billion — roughly twice the full-year total of 2024 and approximately 73% of the full-year total for 2025.

 

Since last year's historic breakthrough of exceeding $100 billion for the first time, the time intervals between reaching hundred-billion milestones have been steadily compressed — which means the full-year 2026 outbound deal value is poised to set a new record.

 

Beyond the simultaneous rise in both deal volume and total value, this year's BD landscape reveals deeper structural changes. Direct long-term strategic collaborations between domestic pharmaceutical companies and MNCs have become the mainstream. The focus of partnerships is no longer limited to mature pipelines but now involves deep integration starting from drug discovery and early-stage R&D — with some projects still in early clinical stages also attracting MNC interest.

 

Behind this shift lies an increasingly clear collaboration pathway: with China's innovation speed and efficiency as the key anchor, Chinese pharmaceutical companies complete target validation and early proof-of-concept, while MNCs take over large-scale clinical development and global market access. This efficient synergy model of "early R&D in China, scaling globally" has become an important paradigm for China's innovative drug outbound expansion in recent years.

 

While MNCs are moving early R&D forward to China for proof-of-concept, another equally profound pathway is also accelerating: overseas biotechs are bringing their pipelines into China's clinical settings, and top global capital is actively building localized channels — leveraging China's structural efficiency advantages in innovative drug R&D to accelerate value validation.

 

From initially undertaking contract services, to beginning to export self-developed pipelines, and now systematically exporting infrastructure-level R&D capabilities, Chinese efficiency is accelerating global innovation translation. This is not merely a quantitative leap in transaction scale, but a fundamental repositioning of China's innovative drug industry within the global pharmaceutical value chain.

 

01: Biopharma Leads Mega-Deals

 

From a transaction data perspective, the BD market in the first half of the year exhibited a notable "volume and price rising together" characteristic. Mega-deals have become the core pillar driving total growth, with the head concentration effect becoming increasingly pronounced.

 

According to incomplete statistics, there were 23 deals in the first half with total potential values exceeding $1 billion. These 23 deals cumulatively represent over $90.2 billion in potential total package value — capital and resources are being highly concentrated in a select few globally competitive core assets.

 

$1 billion deals are becoming commonplace. In the first half, 5 deals exceeded $5 billion, and 3 surpassed the $10 billion mark. Upfront payments were equally substantial: 13 deals had upfront payments exceeding $100 million, with 5 deals breaking the $500 million threshold — a true testament to their value.

 

Examining these mega-deals closely, it's clear that leading domestic pharmaceutical companies have become the backbone of the outbound wave. Innovent Biologics, Hengrui Medicine, and CSPC Pharmaceutical Group have virtually dominated the top BD deals in the first half of the year.

 

Following its $11.4 billion CO-CO deal with Takeda last year, Innovent replicated this model with Pfizer this year. The collaboration focuses on a portfolio of 12 early-stage oncology assets, covering ADCs and bispecifics, with a total value exceeding $10.5 billion. Four core projects will be co-developed globally with shared costs, co-commercialized in the US and Europe with profit sharing, while Innovent retains Greater China rights.

 

Meanwhile, Innovent's deep binding relationship with Eli Lilly — their eighth collaboration — included a deal with a potential total value of $8.85 billion focused on drug discovery and early development, as well as Innovent securing exclusive commercialization rights in China for Lilly's CDK4&6 inhibitor Verzenio (abemaciclib).

 

"The industry leader" Hengrui made a strong showing. Following last year's $12.5 billion deal with GSK, Hengrui continued to dominate this year with its transaction with BMS. The two parties will jointly advance 13 early-stage programs spanning oncology, hematology, and immunology, with a potential total transaction value of approximately $15.2 billion.

 

Beyond the complex architecture of "dual licensing + joint R&D," this deal's payment structure also broke convention by introducing an "Anniversary Payment" as a transitional payment mechanism. The upfront consideration reached as high as $950 million, comprising a $600 million upfront payment, a $175 million first anniversary payment, and a $175 million conditional 2028 anniversary payment.

 

CSPC Pharmaceutical Group has also drawn considerable attention. After reshaping the "new language" of traditional Chinese pharmaceutical companies with its "pre-announced" BD deals, CSPC has made multiple headlines this year through its collaboration with AstraZeneca.

 

Early in the year, its long-acting peptide drugs anchored a potential $18.5 billion deal with AstraZeneca, setting a new record for BD transactions by Chinese pharmaceutical companies. Just days ago, leveraging its proprietary siRNA drug discovery platform and extrahepatic targeted delivery platform, the two parties added a new collaboration for developing novel small nucleic acid drug candidates, with a total value of up to $1.77 billion.

 

The common thread in these mega-deals is no longer the out-licensing of individual molecules, but rather the systematic capabilities of Chinese pharmaceutical companies — from target discovery to early clinical development — being priced by global pharmaceutical giants. This wave of transactions led by Biopharma, while contributing core incremental growth to outbound deal value, is quietly rewriting the role definition of Chinese innovative drugs in the global value chain.

 

TONACEA 02: The Era of Systematic Capability Export

 

Examining the underlying logic of these mega-deals reveals a deeper transformation underway: the focus of collaboration has shifted beyond a few molecules to the systematic capability of "creating molecules" around selected targets.

 

In past years, the international narrative for Chinese biotech largely revolved around license-outs: selling overseas rights to mature pipelines to MNCs, collecting an upfront payment, and betting on milestones. Today, the collaboration model between domestic companies and MNCs has evolved from single-product licensing to leveraging innovative technology platforms for co-developing multiple early-stage pipelines.

 

Overall, in drug categories where China's innovation capabilities and quality have been validated — such as small molecules and antibody drugs — overseas pharmaceutical companies are beginning to pay higher prices and engage in longer-term, more systematic collaborations with Chinese companies.

 

This trend is evident not only in the aforementioned mega-deals involving Hengrui and BMS, CSPC and AstraZeneca, Innovent with Eli Lilly and Pfizer, but also in collaborations involving Haiseco with Lilly, Huyi with Lilly, and AI pharmaceutical companies such as Insilico Medicine and Jitai Technology.

 

Taking Lilly's several collaborations as examples, the agreements with Innovent, Haiseco, and Huyi share remarkable similarities: Lilly selects the targets, while the Chinese partners leverage their respective early drug discovery platforms and innovative R&D systems to conduct drug discovery and early development around the selected targets.

 

Notably, these are not first-time collaborations for Lilly and Innovent, Lilly and Huyi, or CSPC and AstraZeneca. Both sides have a thorough understanding of each other's technical capabilities and delivery track records — through repeated validation and confirmation of each other's capability boundaries in prior collaborations, they have established more stable and long-term strategic partnerships.

 

In terms of specific division of labor, Chinese companies, based on their drug discovery platforms and early development capabilities, take full responsibility for early clinical development, accelerating the completion of clinical proof-of-concept (PoC). MNCs, leveraging their global clinical development capabilities, regulatory expertise, and commercial scale, handle subsequent global advancement.

 

This division of labor is not complex, and the logic is clear: with China's innovation speed and efficiency as the anchor, Chinese companies complete target validation and early PoC, while MNCs take over large-scale clinical trials and global markets. This "early R&D in China, scaling globally" structure is becoming an important pathway for China's innovative drug outbound expansion.

 

The deeper underpinning of these collaborations lies in the capability leap at the infrastructure level of Chinese innovative drug companies — AI-driven drug discovery platforms, translational medicine capabilities, and clinical development experience are becoming the new core competitiveness of China's innovative drug outbound expansion.

 

Compared to traditional licensing around a single mature asset, this collaboration model shifts the center of gravity forward. MNCs, by partnering with platform-type Biopharma and Biotech companies with sustained innovation capabilities, participate earlier in innovative project incubation, securing more stable and long-term innovation supply. What Chinese companies export is no longer just a single molecule, but the R&D system and innovation capability to continuously generate innovative assets.

 

Such collaborations break the boundaries of traditional licensing models, integrating the early development capabilities of Chinese companies with the global clinical development and commercialization capabilities of MNCs, forming an efficient synergistic cooperation model for global drug development.

 

03: Chinese Efficiency Accelerates Global Innovation

 

As Chinese pharmaceutical companies begin to systematically export R&D capabilities, another equally important pathway is taking shape — reverse flow: overseas biotechs and capital are actively bringing pipelines into China, leveraging the local clinical system to accelerate value validation.

 

From an industrial capital perspective, top global venture capital firms have taken the lead in deploying this strategy.

 

In mid-2025, US investment institution RA Capital, with over $10 billion under management, officially launched the Swiftbridge project, building a one-stop clinical implementation channel in China for its portfolio of over 100 early-stage biotech companies, aiming to reduce the time and capital costs of localization adaptation for overseas companies.

 

"We launched this platform to directly put mature Chinese clinical services in front of companies," said RA partner Josh Resnick. "To enable our portfolio companies and NewCos to operate at Chinese speed, without having to build their own understanding of China from scratch."

 

Meanwhile, renowned investment firm Vivo Capital launched the Vivo Accelerator in August 2025, focusing on screening global innovative drug assets. Through innovative collaboration models such as forming NewCos, it introduces overseas innovative drug projects into China, leveraging China's clinical resource advantages to accelerate new drug R&D and clinical translation.

 

Recently, in an interview with Tongxieyi, an investor leading NewCo transactions mentioned a "reverse NewCo" innovative attempt in the first half of the year: screening new targets in the US, partnering with Chinese Biopharma for preclinical collaboration, advancing assets to early clinical data stage, after which the NewCo can exercise its option to obtain global rights. This model combines US advantages in early target discovery with China's efficiency advantages in preclinical development, forming a complementary synergy.

 

Zhang Dan, Co-founder of QUINLING Pharmaceuticals, summarized this development model as "both ends outside," with clear advantages: leveraging China's comprehensive clinical service system, companies can rapidly complete early-stage new drug R&D trial-and-error and value validation. This model avoids the pain points of lengthy R&D cycles, high costs, and high trial-and-error risks in Europe and the US, helping companies increase valuations and achieve diversified value realization through financing, M&A, and BD licensing.

 

Behind this trend lies the irreplaceable structural efficiency advantage of China's clinical system. Multiple authoritative industry data sources fully confirm China's comprehensive competitive advantages in innovative drug R&D:

 

• China's overall timeline from early drug discovery to IND submission is 50% to 70% faster than other global regions.

• China's first-in-human trial approval cycle has been compressed from an average of 500 days to under 3 months, essentially closing the gap with US clinical trial initiation timelines.

• In 2025, China initiated approximately 7,100–7,700 new clinical trials, surpassing the US at 6,300.

• With ample subject populations and lower recruitment difficulty in China, comprehensive clinical trial costs for equivalent trials are up to 60% lower than in the US. For oncology trials, patient enrollment speed in China is 3 to 5 times faster than in Europe and the US.

 

RA Capital, in an interview, articulated the deeper logic: "Biotech companies burn tens of millions of dollars annually. Any trial path that can shorten clinical development timelines by weeks or months — whether in China or elsewhere — saves not just clinical costs, but the entire company's operating costs. This enables companies to make strategic decisions faster, cross value inflection points, allocate resources more precisely, prioritize core pipelines, and accelerate delivery of critical drugs to patients in the US and worldwide."

 

In other words, what is saved by conducting clinical trials in China extends far beyond clinical expenditure — it is the entire company's "time tax."

 

Indeed, such cases are not uncommon. Numerous overseas early-stage pharmaceutical companies have leveraged China's clinical system to complete pipeline proof-of-concept with less capital and shorter R&D cycles, successfully achieving valuation increases, major M&A exits, and BD licensing.

 

A typical example is Belgian startup EsoBiotec's turnaround. Through its strategic decision to conduct clinical trials in China and rapid IIT data output, it successfully secured a $1 billion acquisition by AstraZeneca. Beyond this, numerous overseas pharmaceutical companies, including BridgeBio Pharma, Oncotelic, Telix, BioVersys, and Opterion Health AG, have leveraged China's clinical resources and local market advantages to achieve rapid pipeline breakthroughs.

 

The successful practices of a wave of biotechs point to a more efficient global innovation pathway taking shape: anchoring global source innovation and commercialization, while leveraging China's efficiency and cost advantages to rapidly advance new drug pipelines.

 

When overseas biotechs leverage Chinese resources to complete value validation, when MNCs move early pipelines forward to China for PoC, and when global top capital actively builds Chinese clinical channels — these real capital bets indicate that China's innovative drug R&D system has become an indispensable efficiency engine for global innovative drug development.

 

When we piece together the outward export of capabilities and the inward convergence of elements, an unprecedented "two-way circulation" is taking shape — Chinese innovative drug companies export systematic R&D capabilities to the world, while global innovative assets flow in reverse into China for efficient translation. Once established, this circulation is no longer a single-point breakthrough, but a systemic structural reset.

 

References:

1. Pharmcube, $99.7 Billion! China's Innovative Drugs Swept Up by Foreign Capital in H1 2026

2. dxy Insight Database, Chinese Pharma Goes Wild! Nearly $100 Billion in Outbound Deals in Six Months

3. VBData.cn, Breaking: Pfizer, Lilly, Merck Clinical Trials in China Under Scrutiny — Costs Cut by Up to 60%, Even FDA Can't Stop It

4. FierceBiotech, How RA Capital is offering its biotechs 'Chinese clinical expertise in a box'

5. Various company announcements and official WeChat accounts