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China’s biotech sector is evolving at breakneck speed — and the implications for US pharma are too significant to ignore. Over the past five years, China has transitioned from being a nice to watch market to a central pillar of global biopharma innovation. Today, one-third of in-licensed molecules at US pharma multinationals originate from China, up from virtually zero in 2019.
China’s biotech sector, however, is not monolithic or uniform. The ecosystem spans high-quality, globally competitive biotech hubs in cities like Hangzhou and Suzhou — home to companies producing first-in-class and novel innovations in ophthalmology, cardiovascular, and immunology — as well as a long tail of undercapitalized players where execution and capability gaps remain profound.
And now, Washington is paying attention, too. A recent report from the US National Security Commission on Emerging Biotechnology (NSCEB) highlighted China’s ambitions to dominate biotech as a “strategic priority” with dual-use implications across health and security. The report urges the US government and private sector to reassess dependencies and increase scrutiny of biotechnology partnerships abroad. For the US biopharma industry, this isn’t just a supply chain concern — it is a boardroom issue.
With the licensing market still skewed toward buyers, venture funding remaining depressed in China and IPO windows in Hong Kong slowly reopening, there is a compelling window for US companies to secure differentiated assets at relatively attractive terms. Speedy deal execution is increasingly important as the highest quality assets are being quickly scooped up. But navigating this terrain can require more than opportunism. It calls for deliberate strategy, structured governance and a nuanced geopolitical risk framework.
Here are four questions every US biopharma executive should be asking:
1. What is our posture toward preclinical and clinical science from China?
Are we approaching Chinese innovation with a default posture of skepticism or strategic curiosity? Many top-tier Chinese biotechs are now generating US-caliber data at the speed of light, particularly in therapeutic modalities such as mAbs, ADCs and T-cell engagers, but plenty still have execution gaps. Those that elect to lean in will likely need a deliberate eco-system approach geared towards being the partner of choice and local brand building.
2. What does our China diligence playbook look like?
In light of national security concerns, companies need a China-specific diligence framework — one that goes beyond the science. This includes scrutiny around data integrity, IP protection, export controls, and cross border data sharing.
3. What is our plan post-licensing or acquisition?
Ownership is just the start. US companies need a clear strategy for globalizing China-origin assets — from IND transfers to FDA filing to commercial launch. In some cases, that may require reworking the preclinical package or rebuilding the CMC infrastructure entirely. Increasingly, US (or Europe)-based “Newcos” may serve as geopolitical firewalls.
4. How can we preserve agility amid regulatory and political volatility?
With rising US-China tensions and new export control proposals under review, companies must future-proof deal structures. This could include regional carveouts, US-only development rights, or milestone-gated commitments. The NSCEB report makes clear: passive engagement is no longer tenable.
Innovation strategy meets national interest
The trendlines are clear: China is not just a manufacturing hub — it is an increasingly important source of global biotech innovation. But sourcing innovation from China now sits at the intersection of science, strategy and security. US pharma and biopharma companies can no longer afford to treat China engagement as tactical. Those who adopt a deliberate, resilient and agile China strategy — grounded in scientific rigor and geopolitical realism — likely lead in tomorrow’s innovation race.
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