Licensing agreements for Chinese drug candidates hit a record high in 2024, with large pharma in-licensing 28 per cent of innovator drugs from Chinese biopharma companies. Total deal values of innovator drug licensing agreements involving Chinese biopharma licensors surged 66 per cent, from $16.6 billion in 2023 to $41.5 billion in 2024, marking a five-year high, according to GlobalData.
Increased government investments in biopharma innovation have enabled faster, more affordable trials and improved drug quality in China, making licensing from China more efficient and cost-effective.
Ophelia Chan, Senior Business Fundamentals Analyst at GlobalData, comments, “As merger and acquisition (M&A) investment declined in 2024, biopharma companies globally have turned to licensing agreements as a strategy to access innovative drugs and strengthen their pipelines.”
However, the proposed US BIOSECURE Act, if enacted, would prohibit federal funding for US biotech companies using Chinese biotech services. While the America First Investment Policy (announced 21 February) aims to restrict Chinese investments in the US biotech sector. Proposed tariffs on China could further strain supply chains, raise drug costs, and heighten geopolitical tensions, limiting Chinese biopharma’s access to US funding and partnerships.
The US licensing of Chinese innovator drug candidates has surged, with total deal value for these agreements rising 280 per cent, from $15.7 billion in 2023 to $21.3 billion in 2024. Oncology, immunology, and metabolic disorders were the top three therapy areas for innovator drug licensing in 2024, with a total value of $22.2 billion, according to GlobalData’s Pharma Intelligence Center Deals Database.
In December 2024, Merck expanded its oncology pipeline by licensing LM-299, a Phase II PD-1/VEGF bispecific antibody, from LaNova Medicines for up to $3.28 billion.
Biopharma companies are increasingly licensing monoclonal antibodies and ADCs for advanced targeted therapies, with deals from China rising 43 per cent to $11.3 billion and ADCs up 10 per cent to $10 billion in 2024.
In January 2024, Novartis secured a $4.35 billion deal with Shanghai Argo Biopharmaceutical for a Phase I/IIa cardiovascular asset and a global Phase I asset, highlighting large pharma’s growing focus on siRNA and RNA-based therapies.
Chan concludes, “The US policies could restrict biopharma licensing from China if licensing falls under the America First Investment Policy, potentially slowing innovation. Additionally, rising trade barriers and tariffs on Chinese goods and pharmaceuticals could increase costs and ultimately lead to higher drug prices. While China remains a hub for biopharma innovation, regulatory shifts may disrupt cross-border partnerships and the US access to Chinese drug candidates.”