In December 2024, Belgian biotech company EsoBiotec announced that it would initiate an investigator-initiated trial (IIT) in China to evaluate the preliminary clinical activity of its BCMA CAR-T candidate.

 

Founded in 2021, EsoBiotec's founder, Jean-Pierre Latere, began his entrepreneurial journey with only funds raised from friends and family. While competitors raised hundreds of millions of euros, EsoBiotec operated on just €22 million. It was precisely this capital constraint that forced a creative choice: to conduct clinical research in China.

 

This unconventional decision quickly paid off for Latere. Just months after announcing the launch of the Chinese IIT, in March 2025, AstraZeneca announced the acquisition of EsoBiotec for up to US$1 billion in cash.

 

This case reveals another dimension of cross-border biopharmaceutical collaboration: China is not always just an "exporting country." A value-enhancing pathway of "European/U.S. source innovation + China's clinical efficiency and cost advantages + global commercialization" is equally viable.

 

Zhang Dan, Co-founder and Director of QuaLiMed, and Co-Chairman of Puxin Bio, describes this model as "both ends outside" – source innovation and final commercialization take place in global markets, with China serving as the hub for high-efficiency translation in the middle. He believes this is the core driver of China's participation in global biopharmaceutical collaboration, and the potential of this model is far from being exhausted.

 

Zhang Dan recently sat down with TONACEA to discuss the sustainability of cross-border collaboration, the irreplaceability of China's clinical efficiency, and how China can become a "major power in innovative drugs."

 

Zhang Dan
Co-founder and Director of QuaLiMed, Co-Chairman of Puxin Bio

 

TONACEA 01: Global "Saplings," China Accelerates

 

"Who says we can only export Chinese assets? We can bring promising preclinical assets from Europe and the U.S., integrate them with China's manufacturing capabilities and clinical data, and then take them to the global market, sharing the returns with the originators. If there are good projects globally, we can collaborate," Zhang noted.

 

In 2025, the global biopharma R&D pipeline encompassed approximately 20,000 drugs. According to IQVIA estimates, emerging biotech companies own 70% of clinical-stage pipeline assets, but most have not yet found partners. This means there are a large number of early-stage "saplings" available for screening globally.

 

In terms of clinical speed and cost, China has unparalleled advantages. A McKinsey report highlights that China's most significant advantage is its R&D speed. Due to parallelized workflows, a dense CRO ecosystem, and high execution efficiency, the cycle from early discovery to IND application is 50% to 70% faster in China than in the rest of the world.

 

In later-stage development, thanks to a large and concentrated patient population, well-resourced research centers, and increasingly sophisticated clinical capabilities, trial enrollment in China is typically 2 to 5 times faster than benchmarks in the U.S. and EU. This structural efficiency reduces the cost of drug discovery projects in China to one-third to one-half of the global average, with clinical development costs about 20% to 50% of those in the U.S.

 

China's clinical advantages are the core support for the "both ends outside" model: leveraging China's global competitive edge in early clinical translation, early manufacturing, and cost control to accelerate early-stage R&D assets from around the world into commercially valuable products. The EsoBiotec case perfectly validates the feasibility of this pathway.

 

It is worth noting that this efficiency advantage is not simply tied to the geographical fact of "conducting clinical trials in China," but is an organizational, long-accumulated capability. Zhang pointed out that the efficiency of R&D centers established by MNCs in China often falls short of that of local CXOs or smaller biotechs.

 

"Teams in these MNC R&D centers typically enjoy generous compensation, stable work rhythms, and good professional reputations. Consequently, they lack a sense of urgency tied directly to survival. In contrast, local CXOs and smaller biotechs operate in a 'race against time' environment, reacting faster and taking on more risk when advancing projects."

 

TONACEA 02: The IIT Evolution – Rebalancing Efficiency and Regulation

 

Breaking down the EsoBiotec case, it becomes clear that IITs played a crucial role behind the scenes of extreme efficiency.

 

Unlike the industry-sponsored IND, IITs are initiated by clinical researchers, are demand-driven, and have more flexible designs. Once viewed by Europe and the U.S. as a "loosely regulated" trial model, IITs have become an important pathway to accelerate early-stage asset development because they can quickly validate innovative drug molecules and reduce the cost of trial and error.

 

On May 1, 2026, the "Regulations on the Clinical Research and Clinical Translational Application of New Biomedical Technologies" (referred to as "Decree No. 818") officially came into effect. The regulation reshapes the IIT regulatory framework in two key ways: first, it strictly standardizes access to clinical research, requiring filing management for all clinical research on new biomedical technologies and specifying the qualifications of research sponsors and implementing institutions; second, it opens up the clinical translation pathway, setting conditions and procedures for translational application, and requires health authorities to dynamically evaluate technologies already in translational application based on scientific progress. If safety or efficacy cannot be assured, clinical application is firmly prohibited.

 

Zhang stated that the primary goal of Decree No. 818 is not merely to accelerate research. "Its core objective is to enhance the clinical research capabilities of hospitals, achieving higher quality and greater standardization. At the same time, it means that in China, innovative technologies now have two pathways to market: one through the NMPA's drug registration route, and another through the new medical technology route that allows for potential fee collection." He noted that with China's IND review timeline already compressed to 30 days, the traditional advantage of IITs solely from a speed perspective is diminishing.

 

In September 2025, the NMPA issued an announcement optimizing the review and approval process for innovative drug clinical trials, specifying that applications meeting requirements would be reviewed within 30 working days after acceptance. Previously, the timeline was 60 working days. This 30-day pathway encourages global early-stage co-development and international multi-center trials. With this, China's innovative drug IND officially entered the "30-day era."

 

Following Decree No. 818, the requirements for preclinical data, manufacturing processes, and animal toxicology for IITs have been significantly increased, and IITs are now explicitly permitted only in Grade 3A hospitals. Zhang pointed out that hospitals are becoming more cautious not only because of higher regulatory demands on study quality, but also because current regulations require relevant hospital leaders and responsible personnel to bear corresponding legal liability – a mechanism that directly influences the risk assessment of key decision-makers when approving projects. "This makes hospitals more conservative," he said.

 

In his view, the gap in entry barriers between IITs and INDs is narrowing under the new regulations. In the short term, the speed advantage of IITs is shrinking while the efficiency advantage of INDs is growing. "However, the overall innovation environment has not deteriorated; in the long run, it has become more standardized." He believes the most significant structural impact will be the elimination of low-quality small companies: "Companies with unstable production quality, weak preclinical research, or unclear scientific principles will find it difficult to succeed through either IIT or IND pathways."

 

Zhang also proposed flexible strategic responses. Domestic regulations stipulate that once an IND is filed, an IIT cannot be pursued for the same product. However, if an IND is filed overseas, can an IIT be conducted simultaneously in China? He noted that Decree No. 818 currently does not restrict this. "In theory, 'overseas IND + domestic IIT' could constitute a combined pathway to accelerate clinical development, but whether this will be adjusted in the future is uncertain." Zhang suggested that innovative companies with the appropriate capabilities explore this possibility but should carefully assess policy risks.

 

Amid the dual shifts of stricter regulation and faster review, the efficacy boundaries of IITs and INDs are being redrawn. For companies with genuine innovation capabilities and early-stage assets, this round of institutional adjustment is not an obstacle but an opportunity to re-anchor their competitive advantage.

 

TONACEA 03: Resilience Amid Geopolitical Friction

 

Although the business logic of the "both ends outside" model is clear, the spillover of Sino-U.S. geopolitical friction into the biopharmaceutical sector in recent years has introduced external uncertainty.

 

On April 29, in a federal spending bill report, U.S. House Appropriations Committee member Rep. Andy Harris (R-Md.) cited "national security" to demand that the FDA refuse to accept, review, or even consider any clinical data generated by Chinese trial institutions when pharmaceutical companies submit INDs.

 

Such "decoupling"-related legislative proposals have been frequently reported in recent years. But Zhang believes excessive concern is unwarranted – in the U.S., capital interests have a profound impact on policy direction. As long as Wall Street institutions continue to profit from collaboration, policy-level restrictions are unlikely to be truly implemented.

 

Looking back at the 2024-2025 debate surrounding the BIOSECURE Act, the initially named Chinese companies did not appear in the revised version. In Zhang's view, the most critical supporting force behind this outcome was the deep interdependence of interests that U.S. capital has developed with China's pharmaceutical supply chain.

 

But Zhang emphasizes that the difficulty of "decoupling" in biopharma is not only due to capital ties but also the uniqueness of the industry. "New drug R&D ultimately aims to treat diseases and save lives, addressing the most fundamental and inelastic human need for health. Cutting off clinical data or R&D chains would mean not only capital losses but also facing the hopes of patients and families, the ethical responsibilities of physicians, and the basic consensus of a shared future for humanity."

 

Third-party data confirms the density of this interdependence. According to the NextPharma database from PharmaCube, the total value of out-licensing deals for Chinese innovative drugs in 2025 reached a record high of US135.655billion,withupfrontpaymentsofUS135.655billion,withupfrontpaymentsofUS7 billion and a total of 157 transactions.

 

The mutual dependence in drug R&D pipelines between China and the U.S. is much deeper than it appears on the surface. Chinese CXOs participate in and enable thousands of global R&D projects, deeply embedding themselves in the global supply chains of MNCs.

 

"U.S. MNCs have never stopped importing assets from China. Policy obstruction has not changed this trend to date," Zhang stated.

 

Looking further ahead, the Trump administration's ongoing drug pricing negotiations have placed unprecedented profit pressure on MNCs since 2025, forcing large pharmaceutical companies to source lower-cost, higher-efficiency assets from places like China. Against this backdrop of cost structure pressure, any unilateral restriction on Chinese clinical data would first and foremost impact the competitiveness of U.S. companies themselves.

 

Zhang summarized: "First, capital demands continuous returns, and China is an irreplaceable link in the global R&D and manufacturing chain today. Restricting Chinese data would first harm the pipeline assets and shareholder returns of U.S. companies themselves. Second, the ultimate goal of biopharma is human health, which transcends simple geopolitical games. Unmet clinical needs do not stop because of policies, whether for U.S. patients or Chinese patients. Therefore, to completely decouple, one would not only have to fight against capital but also against humanity's fundamental demand for health, and even against moral and ethical boundaries."

 

TONACEA 04: China's Path to Becoming a Major Power in New Drugs

 

China's biopharmaceutical industry has made significant progress over the past decade, gradually moving from a major generic drug producer to a player in innovative drugs. However, a persistent question remains: how far are we from true "source innovation"?

 

Zhang offered a seemingly counterintuitive answer: "China certainly needs to strengthen and expand its source innovation capabilities, but this does not mean we should wait until China's originality reaches world-leading levels before advancing new drug R&D. Independent innovation and the importation of global innovative assets are not opposing choices; they are two pathways that can proceed in parallel, mutually reinforcing, and co-developing."

 

He noted that while China continues to strengthen its own source innovation system, it should also actively introduce promising early-stage assets from around the world, leveraging China's highly efficient clinical development and translation platform so that global original achievements can benefit Chinese patients while also accelerating their availability to patients worldwide. "Our ultimate goal is not to rely solely on Chinese originality to support the entire industry, but to integrate global source resources to collectively address unmet clinical needs worldwide."

 

In the global biopharma R&D system, numerous teams with source innovation capabilities are distributed across university labs and startups, but they are constrained by their own resources and commercialization capabilities. Chinese companies can, through introduction, collaboration, and deep development, combine externally sourced original assets with their own engineering capabilities, then take them to global markets.

 

Zhang pointed out that looking at the history of most MNCs, licensing-in has been one of their core tools for expanding and sustaining product pipelines. The greatest test for becoming a large pharmaceutical company is not the ability for source innovation, but the ability to integrate resources. "Small biotechs focus on original R&D, MNCs focus on late-stage development and commercial promotion" has become a common collaboration model.

 

In other words, R&D can come from continuous licensing-in, while sales and commercial translation capabilities must be built and accumulated by the company itself.

 

Among all Chinese pharmaceutical companies, BeiGene is widely regarded as the one closest to meeting MNC standards. What distinguishes BeiGene is that it has had an international gene since its inception. In 2018-2019, BeiGene submitted marketing applications for zanubrutinib in both China and the U.S., a key milestone in its development.

 

Today, zanubrutinib is approved in over 75 markets globally and has the broadest label among BTK inhibitors. In 2025, BeiGene achieved its first annual profit, with zanubrutinib alone generating over RMB 28 billion in global sales, a 48.8% year-on-year increase. In Q1 2026, zanubrutinib's global sales reached RMB 7.598 billion, a 33.5% year-on-year increase, with U.S. sales totaling RMB 5.283 billion, up 30.8% year-on-year. Zanubrutinib has captured the leading market share among BTK inhibitors in the U.S. and is gradually achieving full substitution for ibrutinib.

 

BeiGene has a highly international management team, with senior leaders based in China, the U.S., Europe, and elsewhere. Its Chairman and CEO, John Oyler, once joked on a conference call that "BeiGene's headquarters is actually on Zoom."

 

In Zhang's view, this governance logic is the most fundamental difference between BeiGene and other domestic pharmaceutical companies. "In major European and U.S. markets, having a localized core management and commercial team is essential. Without a deep understanding of local regulatory compliance systems, reimbursement frameworks, and academic promotion ecosystems, any product-level lead will be significantly diluted in commercial translation in international markets. It is very difficult for a company that has long been confined to its local market to catch up on the global stage."

 

Final Thoughts

 

The true dividing line for a "major power in new drugs" lies not in a new molecule in a laboratory, but in irreplaceability within the global innovation chain. When China begins to define the standards of clinical efficiency, serve as the hub for cross-border translation, and reshape the global R&D cost curve, it is no longer a follower – it is a leader.

 

Zhang noted that the "both ends outside" model is not unique to biopharma; it is a proven successful path for China over the past several decades. From home appliances to apparel, from consumer electronics to high-speed rail, China has leveraged its powerful manufacturing capabilities and industrialization efficiency to transform global original designs and technologies into large-scale, low-cost, high-quality goods, ultimately benefiting global markets.

 

"Biopharma is the next field where this path can be replicated. China does not need to own all the 0-to-1 originality, but it can become the world's best at 1-to-100 translation."

 

Efficiency can win races, but it does not define an era. A major power in new drugs ultimately requires a grand vision to carry it forward.

 

References:

• The emerging epicenter: Asia's role in biopharma's future; McKinsey

• From family funding to acquisition: EsoBiotec's success story; BioXconomy

• When the FDA Wants to "Block" Chinese Clinical Data

• IIT Behind China's "Fast Track": Misunderstood and Re-examined

• Decree No. 818: Who Will Be Left Out?