Big Pharma Turns to China: Out-Licensing Boom Reshapes Global Biotech

Big Pharma, a New Fame and Hero to Chinese Companies

By Changing Time and Circumstances

The out-licensing of drugs to multinational corporations is a general initiative by Chinese biotechs, but the rising deals are only looking for ready biotech partnerships in the area. The multinational pharma companies have plunged into China to search for new drug candidates. One of the company’s CEO inspected the assistance of a neighboring startup in Shanghai to empty its building.

The CEO, under the pseudonym of Tom Who, asked to remain pseudonymous to be able to speak candidly about the company focusing on lung disease in China’s biotech hub, the Shanghai Zhangjiang Pharma Valley. Tom and others added, saying that the international pharma deal that has introduced China to the forefront of the global biotech scene showed a different reality. Various companies had limited financial resources when the new era began. Most probably, out-licensing deals to other companies or American was a favorable option to stay in the market.

A similar situation at Biobay in Suzhou, around 65 miles west of Shanghai, companies emptied the staff and were searching for new buyers late 2022 few faced bankruptcy.

Thanks to new enthusiastic exposures and interest, China skyrocketed and achieved a reliable and first choice place for new molecules and out-licensing international rights to commit drug candidates. The interest and experimental urge uplifted China’s biotech market.

China’s Biotech Journey

China is now a well-established biotech powerhouse, that led initiatives of capital investment from private and public funds and drug review regulations in the past decades, with the participation of the government. China has successfully achieved the impossible angle in drug R&D &Ds, high-quality, cost-effective, and efficient. Following the massive patient numbers and pharmaceutical engineers covered in only 30% to 50% cost of developing a drug in the US. The region also received beneficial returns of various internationally trained scientists. The scientists were called back to China by talent incentives and discover new drugs.

The last six months witnessed 80 out-licensing deals from China, consisting few big-ticket announcements. Pfizer promised $6 billion to 3SBio, Inc., a Shenyang-based biotech company regarding for rights as ex-China to SSGJ-707, a bispecific antibody focusing on PD-1 and VEGF. Chinese biotech announced its highest upfront payment of $1.25 billion, breaking the record for a therapy. A few months later, AstraZeneca was involved in an R&D partnership with CSPC, with the deal sealed at $5 billion.