China drug out-licensing hits $110B record in H1 2026

China's innovative drug out-licensing transaction value reached approximately $110 billion from January to June, the National Medical Products Administration said, as global pharmaceutical companies deepen their reliance on Chinese drug discovery to fill pipeline gaps.

"The data confirms that China has become an indispensable source of innovative drug assets for global pharma," the NMPA said in a statement carried by state broadcaster CCTV on July 13. "The breadth of therapeutic areas and geographic reach of licensees demonstrates the maturation of China's biotech ecosystem."

The 81 out-licensing deals recorded by June 30 covered 10 therapeutic areas including oncology, metabolism, immunology and neurology, according to the NMPA. Licensees came from 20 countries and regions spanning the US, the UK, France and Italy. The $110 billion total represents 80% of the full-year out-licensing transaction value in 2025, which itself was a record year.

The surge underscores a fundamental shift in the global drug development landscape. Where Chinese companies were once primarily licensees of Western technology, they are now net originators of novel assets — particularly in antibody-drug conjugates, GLP-1 receptor agonists and cell therapies. The trend has prompted some US biotechs to adopt greater secrecy around early-stage programs, according to a July 10 report in Endpoints News, which quoted one executive saying "we're paranoid" about competition from Chinese rivals.

Big Pharma's China Deal Spree Accelerates

The first-half numbers reflect a wave of blockbuster partnerships signed in recent months. In December 2023, GSK paid $185 million upfront to Hansoh Pharmaceutical for exclusive global rights to an antibody-drug conjugate called risvutatug rezetecan, or ris-rez, in a deal that could reach $1.7 billion. That bet paid off in July 2026 when Hansoh reported positive Phase 3 data for ris-rez in small-cell lung cancer — the first positive overall survival readout for a B7-H3-targeted ADC in any tumor type, according to GSK.

Other major pacts have followed. Pfizer made a $650 million cash payment to access Innovent Biologics' antibody pipeline in a deal that could exceed $9.8 billion in biobucks. Bristol Myers Squibb teamed up with Hengrui Pharma on 13 oncology and immune assets in a pact worth more than $15 billion. Regeneron and Merck have separately struck obesity drug partnerships with Hansoh, while Roche inked a $1.5 billion ADC pact with the Jiangsu-based company.

What It Means for Investors

For investors in Chinese biotech stocks listed in Hong Kong, Shanghai and via ADRs, the out-licensing boom provides a tangible valuation anchor. Companies with validated out-licensing track records — Hengrui Pharma, Hansoh Pharmaceutical, Innovent Biologics — are now generating revenue streams that reduce their dependence on domestic China pricing, where the National Healthcare Security Administration has driven aggressive drug price cuts through volume-based procurement.

The $110 billion figure, while representing total potential deal value including milestones and royalties rather than upfront cash, signals that global pharma is willing to pay a premium for Chinese innovation. For US and European biotech investors, the trend raises a strategic question: as Chinese assets increasingly populate Big Pharma pipelines, the competitive moat of Western biotechs in areas like ADCs, obesity and cell therapy is narrowing.

This article is for informational purposes only and does not constitute investment advice.