In the first quarter of this year, China’s innovative pharmaceutical industry delivered an impressive performance in both out-licensing (BD) transactions and R&D achievements. According to the latest data from the National Medical Products Administration (NMPA), total BD transaction value for innovative drugs in the first three months exceeded USD 60 billion, approaching half of the USD 135.7 billion recorded for the entire year of 2025.
As of March 27, 10 innovative drugs had been approved this year, 8 of which were domestically developed. These figures not only set a new historical record for the same period but also indicate that multinational pharmaceutical companies and overseas investment institutions are increasingly attentive to China’s innovative assets, with significantly stronger willingness for cooperation. The international recognition and supply quality of Chinese innovative drugs are rising in parallel.
From a market perspective, a series of high-value BD transactions has been a key driver of first-quarter industry activity. Companies such as Sino Biopharmaceutical and Ascletis Pharma have completed multiple out-licensing deals worth billions of dollars, while collaborations between CSPC Pharmaceutical Group and multinational pharmaceutical companies include substantial upfront payments and potential milestone payments. Meanwhile, Innovent Biologics’ continued multi-round strategic cooperation with Eli Lilly further strengthens long-term collaboration between Chinese and global pharmaceutical companies in oncology and immunology. Globally, since the beginning of the year, China-origin innovative drug BD projects have significantly increased both in number and in share of total deal value, with high-value transactions becoming a clear trend.
Industry observers widely believe that China’s innovative drug out-licensing is shifting from a phased phenomenon to a systemic trend, driven by both improved R&D capabilities and cost advantages. When evaluating early-stage pipelines, multinational pharmaceutical companies increasingly value the cost-effectiveness of Chinese assets. With comparable or even superior clinical potential, some Chinese projects cost only 30% to 40% of those in Europe and the United States, making China an increasingly important source of global innovative drug pipelines. At the same time, in cutting-edge fields such as bispecific antibodies, antibody-drug conjugates (ADC), GLP-1 receptor agonists, T-cell engagers, in vivo CAR-T, and small nucleic acid drugs, Chinese companies are continuously strengthening their technological capabilities and accelerating R&D progress.
In this process, BD transactions have evolved beyond simple commercial monetization and have become an important mechanism for maintaining cash flow and sustaining R&D investment. Given the long development cycles and high costs of drug discovery, the industry has historically faced significant funding pressure. However, upfront payments and milestone revenues from out-licensing have effectively improved corporate balance sheets and enabled continued R&D advancement. As a result, some companies have seen substantial improvements in performance, with significant growth in both revenue and profit, highlighting the direct financial impact of BD income on corporate stability.
At the same time, transaction structures are also evolving. While traditional license-out deals remain dominant, the emerging NewCo model where overseas new companies being established to advance global development is gaining traction. This model allows firms to transfer partial rights while retaining long-term revenue sharing, achieving phased value realization while participating in global operational systems, reflecting a shift from “single transactions” to “long-term co-development.” Meanwhile, some cross-border collaborations are also expanding from single-asset licensing to multi-pipeline, multi-area strategic partnerships, indicating deeper cooperation.
From an industry structure perspective, bispecific antibodies, ADCs, and GLP-1-based drugs have become the most active areas in BD transactions, with particularly strong growth in both deal value and volume for bispecifics and ADCs. GLP-1 drugs continue to expand in the fields of weight management and metabolic diseases, with key development directions including oral formulations, long-acting versions, and multi-mechanism combinations. These breakthroughs reflect China’s shift from follower-based innovation toward globally competitive original innovation.
Despite the continued vibrancy of BD activity, there is a growing consensus that out-licensing is only the starting point of globalization, not the endpoint. The true long-term value of innovative pharmaceutical companies lies in subsequent clinical development, regulatory approval, and global commercialization capabilities. As more projects enter mid-to-late stages of development, companies’ comprehensive capabilities in international clinical execution and global market operations will become the new core competitive factor.
From the perspective of the capital markets and policy environment, although short-term structural fluctuations exist, the overall innovative pharmaceutical industry remains on an upward trajectory. The number of clinical trial applications in China continues to grow, advanced technologies such as cell therapy and CAR-T are steadily progressing, and early-stage financing activity remains active. At the policy level, continued support for innovative drugs and medical devices provides long-term structural backing. Industry participants generally believe that current market volatility is part of a normal cyclical adjustment and does not alter the industry’s long-term upward trend.
Looking ahead, as more innovative drugs enter late-stage clinical development and achieve global filings, China’s pharmaceutical industry is gradually transitioning from “generic-plus-innovation” to a model centered on original innovation. Whether in pipeline out-licensing, global partnerships, or independent R&D capabilities, China’s innovative pharmaceutical sector is accelerating its integration into the global system and beginning to demonstrate leadership in certain areas. A global pharmaceutical innovation landscape with China as a key contributor is steadily taking shape.
Source: sina, eastmoney, pharmcube, cecn
