China's annual drug licensing share hit 30% of global deals
Q1 2026 brought $60B in outbound deals from Chinese drug developers. Why China captures that spillover is structural. It is harder to unwind than the deal flow suggests.
Q1 2026 outbound deals hit $60B, nearly half of 2025’s full-year total
China’s share of global licensing rose from 3% to 30% in five years
$115B in MNC revenue is at risk by 2035, forcing rapid pipeline replacement
The NewCo model lets Chinese assets exit via Nasdaq, not just BD
BIOSECURE Act enactment and FDA scrutiny of single-country data remain unpriced
$60B in three months. That is what Chinese drug developers signed in outbound licensing deals during Q1 2026. The figure approaches half of 2025’s full-year total.
These are signed contracts, not projections.
The individual deals illustrate the scale. In January, CSPC and AstraZeneca signed a licensing agreement for obesity and weight management assets worth a potential $18.5B. AstraZeneca paid $1.2B upfront. RemeGen and AbbVie reached a $5.6B licensing agreement the same month.
In February, Innovent and Eli Lilly completed their seventh collaboration, with milestones reaching up to $8.5B. In March, Sino Biopharm out-licensed rovadicitinib to Sanofi for $1.53B, a record for Chinese pharma in the transplant indication. Rovadicitinib is a first-in-class oral JAK/ROCK inhibitor.
These transactions follow a five-year trend. According to Nature, China’s share of global licensing deal value rose from roughly 3% in 2020 to over 30% in 2024.
In absolute terms, that is a move from approximately $5B to over $50B in annual deal flow. A tenfold rise in five years.
Three structural forces explain the trajectory.
The patent cliff forces the hand
The most quantifiable pressure on global pharma is also the most urgent. According to Morgan Stanley, multinational drugmakers face $115B in revenue erosion by 2035 as blockbuster patents expire. The gap requiring coverage before 2030 reaches $40B.
The assets at risk are not obscure. Merck’s pembrolizumab and Bristol Myers Squibb’s nivolumab are among the most exposed. These are the revenue pillars that fund the rest of each company’s pipeline.
The structural problem runs deeper than individual products. According to Nature, the top 20 pharmaceutical companies approved 168 new drugs between 2011 and 2020. Just 36 of those accounted for 70% of total new-drug sales.
The top 7 contributed 28% of all new-drug income. Losing two or three core assets creates a disproportionate revenue hole.
External licensing is the fastest route to replacement. Internal R&D cycles run 10 to 15 years. Licensing a Phase II or Phase III asset compresses that to five years or fewer.
For companies facing cliff dates in 2028 or 2029, licensing is faster and cheaper than building internally.
China became the logical destination. According to Nature, 11 top multinational companies deployed over $150B across Asia between 2020 and 2025. 65% of that went to China.
Over 50 clinical-stage or applicable assets were licensed in from the region over the period. The majority originated in China.
Why China, not India or Korea
The patent cliff created demand. China’s specific position in next-generation drug technology created the match.
The platforms reshaping oncology today include ADC, bispecific antibodies, T-cell engagers, and CAR-T therapies. They are displacing traditional small-molecule drugs as the primary source of new approvals and revenue.
China entered these platforms without legacy drag. Western incumbents built decades of infrastructure, expertise, and organizational identity around small-molecule chemistry. Pivoting toward biologics and next-generation platforms requires writing down those assets.
The larger the legacy franchise, the heavier the transition cost. Chinese developers started from a different baseline. With no equivalent infrastructure to protect, capital went directly into ADC, bispecific, and CAR-T programs.
The result is a pipeline that aligns precisely with where global demand is concentrated now.
The scale of China’s position is measurable. Over 50% of global clinical-stage ADC programs are run by Chinese developers. In first-in-class approvals, Chinese teams produced 4 of 11 globally novel mechanisms approved in 2025. A decade ago, that category barely existed in China.
The clinical evidence is specific:
First global Trop2 ADC for lung cancer: Kelun-Biotech’s sacituzumab tirumotecan. Western Trop2 programs had focused on breast cancer.
First PD-1/CTLA-4 bispecific approved: Akeso’s cadonilimab, with Phase III advantages over standard PD-1 combinations in cervical and gastric cancer
First Chinese-origin CAR-T approved in the US: Legend Biotech’s ciltacabtagene autoleucel, reaching nearly $2B in global sales in 2025
First bispecific T-cell engager with published Lancet data: Baili-Tianheng’s BL-B01D1, targeting two antigens simultaneously to address single-target resistance
Alternatives do not compare. India’s pharmaceutical sector is built around generic manufacturing with limited innovative pipeline. Korea has competitive contract manufacturing capability but a narrower innovation base. Its domestic market cannot sustain large-scale novel drug R&D at the required pace. Southeast Asia relies on imported active ingredients and core technology across the board.
