China Rises to become the Biopharma Innovation Source
（the article has been updated to make the text concise and cohesive)
Cost-Effective, Too
China is quickly gaining attention as a key source of biopharma innovation, fueled by a series of big deals and high-profile partnerships. From antibody-drug conjugates to GLP-1 treatments, China’s biotech sector is emerging as a powerhouse of cutting-edge drug development.
One of the latest highlights is the $411 million in Series A financing raised by obesity drug developer Verdiva. Interestingly, Verdiva didn’t develop its own pipeline but instead licensed GLP-1 assets from Hangzhou-based Sciwind Biosciences. Sciwind, founded by Hai Pan, is another Chinese biotech innovator capitalizing on out-licensing deals to U.S. startups, which have in turn attracted large investments.
Other major deals include Summit Therapeutics, which saw its Nasdaq-listed shares rise by over 80% after a successful clinical study. The study demonstrated that its pipeline asset, a PD-1/VEGF bispecific antibody, outperformed Merck’s Keytruda. This asset, ivonescimab, was licensed from China’s Akeso Bio.
Meanwhile, more established Chinese biopharma companies, like Jiangsu Hengrui and Hansoh, are also out-licensing assets to international buyers. Hengrui, through its Newco Hercules, licensed its GLP-1 to Kailera, while Hansoh signed a deal with GSK.
Rather than developing their own pipelines, these U.S. biotech startups are opting to buy assets from China. China’s biotech companies offer distinct advantages: the ability to enroll patients for clinical studies quickly and at a fraction of the cost compared to trials in the U.S. With the Chinese economy slowing, biotech firms are eager to raise funds from venture investors and pharmaceutical companies to strengthen their cash flows.
There is some debate around the valuations of these deals. Upfront payments typically range from $100 million (in the case of Hengrui) to $185 million (for Hansoh). Hengrui’s executive, Lianshan Zhang, noted that while they may not focus on upfront payments, their priority is securing product royalties and supporting products through to market.
Despite the growing competition in metabolism and obesity management, this area remains a hotbed for investment. Treatments like oral formulations for metabolic conditions, unlike oncology drugs, can be used by a wider patient base and are more convenient to administer, making them highly attractive to startups and investors alike.
As the JP Morgan Healthcare Conference approaches next week, dealmakers are gearing up for the largest event in healthcare dealmaking. It’s an exciting time to watch China’s growing influence in the global biopharma space.