On July 22, 2026, Daniel Mathews, EY¹ Global Life Sciences Sector Managing Partner, came to Shanghai to attend the inaugural "Great Nation New Drugs" Global Conference (CPIC 2026), hosted by Tongxieyi. As one of the conference's key international guests, Daniel Mathews was invited to attend the opening ceremony that morning, where he joined Shanghai municipal leaders and distinguished guests from the global life sciences industry for the conference's unveiling ceremony. In the afternoon, he delivered a keynote speech at the main forum and released the white paper From China Innovation to Global Value: Observations on Global Collaboration and Transactions in China's Innovative Drug Industry on behalf of EY.

Daniel Mathews
EY Global Life Sciences Sector Managing Partner

As EY Global Life Sciences Sector Managing Partner, Daniel has long focused on growth strategies, external innovation, and transaction activities of global biopharmaceutical companies. At CPIC 2026, he drew on EY's Firepower research, which has been ongoing since 2013, to place the recent evolution of China's innovative drug industry in the context of the global industrial landscape.

In his speech, Daniel noted that the importance of transactions to large biopharmaceutical companies is continuing to grow. From 2013 to 2025, 77% of the portfolio value growth of the top 25 global biopharmaceutical companies came from transaction activities such as M&A and collaborations[1]. As a number of core products approach loss of market exclusivity, these companies could face a growth gap of over US$370 billion by 2032[2]. At the same time, the biopharmaceutical industry has approximately US$1.6 trillion in available deal-making capacity and continues to search globally for innovative assets that can support future growth[3].

Since 2025, global biopharmaceutical transactions have accelerated significantly. According to the latest data shared by Daniel, biopharmaceutical M&A spending in the first half of 2026 reached approximately US$147 billion, an increase of 135% year-over-year[4]. The buyer landscape has become more diverse, with biotech companies, mid-cap pharma, and private equity firms actively seeking opportunities alongside large pharmaceutical companies. Deal targets are extending toward earlier-stage assets, new technology platforms such as cell and gene therapy continue to attract investment, and more deals are adopting flexible structures linked to subsequent performance.

From a therapeutic area perspective, oncology remains the most active area for global R&D and transactions, with CNS, immunology and inflammation, metabolic diseases, and anti-obesity assets also drawing significant attention. Daniel noted that innovation is emerging rapidly across different therapeutic areas, technology platforms, and geographies. Companies need to establish broader market-scanning capabilities and improve their speed in assessing asset value and executing transactions.

China's innovative drugs were a key focus of the presentation. The EY white paper shows that in 2020, China-related biopharmaceutical collaboration transactions accounted for approximately 8% of the potential value of U.S./Europe-related collaboration transactions; by 2025, this figure had risen to 34%[5]. Updated data shared by Daniel at the event further showed that in the first half of 2026, China-related transactions accounted for 54% of the potential value of publicly disclosed cross-border collaboration transactions[6].

Daniel believes this shift reflects the improved supply capacity of China's innovative drug industry. Chinese companies have built active R&D pipelines in areas such as oncology, ADCs, bispecific antibodies, and cell and gene therapy, with distinctive strengths in clinical execution speed, engineering capabilities, and asset availability.

Daniel stated: "China has become a very important part of the global life sciences innovation network. Global companies are looking more systematically at assets, platforms, and R&D capabilities coming from China. The next priority is to successfully move these innovations into global development, registration, and commercialization systems, and ultimately translate them into better outcomes for patients."

The white paper From China Innovation to Global Value: Observations on Global Collaboration and Transactions in China's Innovative Drug Industry analyzes the demand for external innovation among global pharmaceutical companies, changes in China's innovative drug supply, the evolution of cross-border collaboration transactions, post-deal execution and value realization, and examines various globalization pathways including single-asset licensing, multi-asset portfolio collaborations, co-development, platform partnerships, NewCo structures, and independent outbound development. The white paper suggests that while transaction volume and value remain important, clinical advancement, regulatory outcomes, and commercial success following deal signing will have an even more direct impact on the long-term global value of China's innovative drugs.

Artificial intelligence was also a significant topic in Daniel's presentation. EY data shows that in 2025, potential transaction value around AI assets in the life sciences industry grew 256% year-over-year, with approximately 90% of biopharmaceutical AI investment flowing to R&D platforms[7]. Daniel noted that AI applications are extending into business development and transaction processes, including market analysis, target screening, due diligence, risk assessment, financial modeling, and post-deal integration. For deal teams, AI can help process complex information faster, improving screening efficiency and execution quality.

Looking ahead, Daniel indicated that life sciences transactions will continue to be driven by growth gaps, ample capital, and ongoing innovation, while competition for quality assets, deal premiums, geopolitical factors, pricing, and execution challenges will also continue to influence corporate decision-making. Companies need to balance deal velocity with investment discipline, seek valuable innovation globally, and build the capability to translate innovation into clinical outcomes and commercial value.

Daniel Mathews' visit to China and participation in CPIC 2026 brought EY's latest observations on the global life sciences transaction market to the conference, while also offering the international industry a fresh perspective on Chinese innovative drugs. As more Chinese innovation assets participate in global development and collaboration, China's innovative drug industry is integrating into the global life sciences ecosystem in increasingly profound ways, bringing more treatment options to patients worldwide.

Notes:

1. EY: Ernst & Young LLP, a member firm of EY in the UK

Data Sources:
[1] Broker reports, Capital IQ, EY Insights
[2] EY Firepower M&A Report 2026: How can life sciences companies move faster on the deals that matter most?
[3] EY Insights, Capital IQ, Company reports. 2025 estimates based on latest company financial reports as of December 2025
[4] Broker reports, Capital IQ, EY Insights
[5] EY Firepower M&A Report 2026
[6] Capital IQ, EY Insights
Note: Analysis based on publicly disclosed cross-border strategic collaboration transactions between Chinese biopharmaceutical companies and U.S./European biopharmaceutical companies. Potential transaction value includes upfront payments and total potential deal value (biobucks/milestone payments). Analysis based on disclosed transactions; H1 2026 data as of June 30, 2026.
[7] EY Firepower M&A Report 2026, EY Insights, Capital IQ, Company reports