Report from China: Setting Sight on New Modalities and Global Markets

Chinese biotechs opened 2025 with a bang at JPM week, and the momentum has continued.

Much of the conversation early this year was about how the US could rise to the challenge, and hold onto its historic position as the world leader in biotech innovation (see my Jan. 8, 2025 editorial in TR).

The evidence of a China biotech renaissance was overwhelming and could no longer be downplayed. Recall a flurry of deals from January totaling billions in upfront and milestone payments, including Innovent / Roche, Kelun / Harbour – Windward Bio, Keymed / Innocare – Prolium, Duality Bio – Avenzo, KeyMed – Timberlyne, among others.

Six months later, a Jefferies report showed that one in three licensing deals for all new drug candidates — 32 percent — trace their origins to China. Even as US biotech has shown signs of recovery this fall, Chinese biotechs are maintaining a competitive pace.

Last month, I traveled to Beijing, Shanghai, and surrounding areas on a 10-day business trip to see with my own eyes. I wanted to explore opportunities for my company, San Francisco-based Meliora Therapeutics, and spot the latest trends. I met with local biotech startups, established pharmas, and Chinese VC funds.

Here are my top impressions:

First Came Antibodies and Bispecifics, Now Come Genetic Medicines

Chinese biotechs have burst on the scene the past five years to become a dominant force in antibody engineering and biologics development. This is mainly attributable to their advantages in cost, efficiency, and speed.

The deals speak for themselves: BioNTech’s $800 million upfront deal value with Biotheus for their PD-L1/VEGF bispecific, and Merck’s acquisition of a PD-1/VEGF bispecific from LaNova Medicines for $588 million upfront and up to $2.7 billion in milestone payments are a couple recent examples.

This year, we have seen Chinese biotechs pursue with in vivo CAR T-cell therapies and other genetic engineering technologies with a similar fervor.

This is exemplified by recent deals like Vitalgen licensing a lipid nanoparticle (LNP) construct from GRIT Biotechnology for in vivo CAR-T applications and Porton Advanced partnering with RongCan Biotech to develop ionizable LNPs aimed at mRNA, gene editing, and in vivo CAR-T payloads. This is just the tip of the spear. By latest count, there are over *150* China-based in vivo CAR-T companies now.

Most of these companies will not survive, but such is the market in China. The Darwinian selection pressure is intense, but it also drives breathtaking speed.

China’s advantages in cost and velocity are even more apparent in this modality, with some companies claiming timelines of nine months to development candidate for RNA and other genetic medicine programs. This is perhaps 3X+ faster than the norm in the US.

Novel Translational Biology Is In Sight

For many years, the critique of Chinese biotech has been they are fast followers, not innovators. This narrative is beginning to shift, albeit slowly.

On my trip in September 2025, I counted at least a dozen instances of startups genuinely pursuing novel biology, from novel rare disease targets identified through proprietary human genetic databases to first-in-class oncology programs that are not simply leveraging Western academic & industry publications as starting points for scaffolds and molecules.

The competition among biotechs inside China is intense. The CEOs leading these biopharma companies understand that novel biology is the one differentiator that can help them stand out in a field of many me-toos seeking investment dollars.

The larger pharmas in China all now have R&D groups that are exploring novel targets and mechanisms via small molecules, antibody-drug conjugates, bispecific T-cell engaging antibodies, and more. Most of Chinese biotech still operates in the validated target space. But the desire and capability to explore novel biology is evident. Green shoots are visible.

The constraint, as always, is talent. China has extraordinary depth in antibody engineering, chemistry, process development, formulation, and manufacturing science. It has growing – but still limited – talent depth in translational medicine and disease biology. The companies making the leap into novel biology are typically those that have successfully recruited native-born Chinese scientists who were educated in the US and Europe, and who are now returning to China to lead their R&D efforts.

Fewer Newcos, But Business Development Still Humming

In 2024, newco activities were all the rage. Windward Bio, Prolium Bioscience, and Timberlyne Therapeutics were a few of the startups that debuted, each raising substantial rounds of venture capital. At the time, Western VCs were looking for clinical stage assets that could reach clinical value inflection points quickly, and Chinese biotechs were willing sellers of assets given financing difficulties in their market.

Fewer new companies are being formed in China with assets to out-license to the US and Europe this year, but it’s still happening.

First, the financing environments in China have recovered faster than in the US, meaning existing biotechs in China are not desperate to do outlicensing deals to stay alive. Second, valuation expectations are higher after substantial deals like those mentioned earlier have set the high-water mark. Third, and perhaps most importantly, many of the obvious targets and clinic-ready assets are gone.

While newco activity as slowed, it hasn’t gone away completely. San Francisco-based Expedition Therapeutics recently raised a $165 million round, and Boston-based Bambusa Therapeutics raised a $90 million Series A. Both companies are built around assets from China.

Additionally, licensing activity remains robust as mentioned by the Jefferies report. The difference is that deals are increasingly happening at earlier stages and with more creative structures. For example, there are now meaningful examples of Western biotechs licensing Chinese platform technologies for speed and cost advantages in manufacturing and formulation, e.g. Kite / Gilead & Pregene, rather than licensing specific assets.

This is still early innings, but the trend is notable in that it demonstrates Western pharma’s interest in leveraging Chinese platform capabilities broadly.

Chinese Pharma Has a New Slogan: “Go Global”

During my visit, it became apparent there is a new slogan for the major Chinese biopharma companies today, whether Hengrui, Sino Biopharma, Simcere, or Innovent: “go global.”

Their model? Takeda, which over decades built a truly global R&D and commercial presence that transcended its Japanese origins.

The aspiration is clear and understandable. After spending the better part of two decades building innovative R&D capabilities and seeing those capabilities validated through licensing deals and promising clinical data, Chinese pharmas are asking the logical next question: why stop at outlicensing when we could capture the full value ourselves? The domestic market, while large, is hyper competitive and subject to aggressive volume-based procurement policies from the main buyer of its products – the Chinese central government. That squeezes profit margins. Global expansion is seen as both a growth opportunity and a strategic hedge.

While this aspiration is clear, there are still challenges that should not be underestimated. The capital intensity of global registrational trials is much higher than domestic or regional studies. Clinical development expertise for navigating FDA, EMA, and other global regulatory authorities has not been fully developed internally yet, and hiring clinical development organizations internationally represents a significant commitment in both cost and management attention.

Only the best financed and profitable of the Chinese biopharma are likely to make the jump successfully, but make no mistake, this is an industrywide goal that was uttered many times on this most recent trip.

As China’s home-grown pharma companies start generating meaningful cash flow domestically from innovative therapeutics, they have set their sights on commercializing that innovation in global markets. This will be a key theme to watch in the coming quarters and years. The first Chinese biopharma to successfully launch and commercialize a novel drug in the US or Europe without a partner will be a watershed moment.

The Relentless March Continues

The pace of China’s development continues to astound. Every quarter the Chinese biotech ecosystem has a new “feel,” and progress is relentless if uneven. Some areas surge ahead while others stumble, but the overall trajectory is unmistakable.

For observers in the West, particularly those making capital allocation or partnership decisions, the imperative is clear: the world would benefit from continuing to watch this market closely as Chinese biotech continues to make strides.