EXPERIMENTAL THERAPIES, MULTIBILLION-DOLLAR DEALS
The development was seen as a milestone for an industry that has been taking steady steps toward disruption. Before China began opening up its economy in the late 1970s, nearly all of its pharmaceutical companies were state run. For decades afterward, most stuck to copycat “me-too” drugs.
That’s changing fast. Starting two decades ago, the government began to make it more attractive for returning scientists, like Akeso CEO Michelle Xia, a cancer researcher, to set up shop after long careers overseas. And in 2015, Beijing threw its full weight behind the Made in China 2025 industrial policy, having identified 10 key areas – including pharmaceuticals – in which it aimed to go head-to-head with Western companies.
That effort has been largely successful. Chinese drugmakers have begun rolling out experimental therapies and inking multibillion-dollar licensing agreements to take the products worldwide.
From 2021 to 2024, those deals nearly quadrupled. They hit a record in just the first six months of this year, with US-bound ones accounting for more than half of the total value, according to Rebecca Liang, senior China biopharma analyst at Bernstein.
It’s a logical arrangement. Homegrown pharmaceutical firms have the medicines and muscle, but they’re likely to encounter regulatory hurdles in developed markets if they go out to commercialise it all themselves. By Big Pharma standards, their prices are reasonable. According to Cui Cui, an analyst at Jefferies, the Chinese side usually gets a 10 per cent to 15 per cent cut of revenues outside its home market.
As for the established global players, they’re on the prowl for new, tested and cost-effective therapies. With blockbuster drugs generally losing patent protection after 20 years, firms risk hundreds of billions in lost revenue over the next decade if they fail to get new medicines into their development pipelines.
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