Chinese Innovative Drug Firms Accelerate Global Expansion with Over 40 License-Out Deals in H1 2024

　　【Pharmaceutical Network Industry DynamicsIn recent years, with the continuous development of innovative drugs in China, domestic pharmaceutical companies have gradually expanded overseas, making "going global" a key term in the industry's development. According to statistics, the trend of innovative drug exports continued into the first half of 2024, with numbers steadily increasing.
 

Statistics show that in the first half of 2024, Chinese domestic pharmaceutical companies completed a total of 60 cross-border BD deals, marking a significant increase compared to the same period in 2023. Among these, the number of cross-border License-out deals reached 43.
 

Among these 43 License-out deals, the leading buyers are mostly multinational companies, including AstraZeneca, Novartis, Johnson & Johnson, and Takeda, which have each reached two cross-border BD transactions with Chinese enterprises.
 

On May 23, Harbour BioMed's wholly-owned subsidiary, Nona Biosciences, entered into a licensing agreement with AstraZeneca for a preclinical monoclonal antibody project. Upon completion of the transaction, Nona Biosciences will receive an upfront payment of $19 million, with the potential to obtain an additional $10 million in near-term milestone payments, as well as up to $575 million in development, regulatory, and commercial milestone payments, plus tiered royalties based on net sales, accelerating the development of targeted oncology therapies.
 

On January 8, Argo Biopharma announced the signing of two exclusive license and collaboration agreements with Novartis. Under the agreements, Argo Biopharma has licensed multiple cardiovascular therapy pipelines to Novartis, receiving an upfront payment of $185 million, with the potential to earn up to $4.165 billion in option fees, milestone payments, and tiered royalties on commercial sales.
 

Moreover, in the overseas expansion of innovative drugs in China, Hengrui Pharma's "joint overseas expansion" transaction model has drawn significant attention from the industry.
 

It was reported that on May 16, Hengrui Pharma announced a paid licensing agreement granting Hercules, a U.S.-based company, exclusive global rights (excluding Greater China) to develop, manufacture, and commercialize its proprietary GLP-1 class innovative drug combination, including HRS-7535, HRS9531, and HRS-4729. The upfront payment and near-term milestone payments amount to nearly $110 million, with the total deal value, including sales royalties, exceeding $6 billion. Through this overseas collaboration, Hengrui Pharma will not only receive licensing fees but also acquire equity in the corresponding fund company, enabling participation in decision-making processes and access to dividends.
 

A relevant person from Hengrui Pharma stated that this collaboration marks an important step in Hengrui Pharma's internationalization strategy and represents a high level of recognition from the international market for the company’s innovation capabilities. Through cooperation with investment institutions such as Bain Capital, Hengrui Pharma will not only broaden the international path for its innovative pipeline but also leverage these institutions' global resources and networks to better address unmet medical needs worldwide. Industry analysts also believe that Hengrui Pharma's collaboration with U.S.-based Hercules represents a model for deep integration between Chinese pharmaceutical companies and international capital, technology, and markets.
 

Industry insiders indicate that in the first half of this year, China's biopharmaceutical enterprises have achieved multi-faceted successes in their "going global" endeavors. Companies or products in sub-sectors such as innovative drugs, biosimilars, vaccines, and medical devices have received overseas approvals for market entry, secured product orders, or completed license-outs (overseas licensing). As biopharmaceutical companies accelerate their "going global" pace, the methods of international expansion will become more diversified. Additionally, some experts point out that in the future, with the continuous enhancement of China’s pharmaceutical enterprises' independent innovation capabilities, an increasing number of domestic innovative drug companies will expedite their overseas market strategies, leading to broader international development opportunities.
 

However, some individuals have pointed out that whether it is innovative drugs, biosimilars, medical devices, or pharmaceutical services industry, "going global" requires facing a complex international market environment and regulatory requirements. So, how can pharmaceutical companies effectively "go global"? In this regard, some individuals have stated that domestic companies should focus on long-term planning when making arrangements. For biopharmaceutical supply chain enterprises, it is necessary to invest in the research and development of new technologies, new products, and new processes. Others have stated that the precondition for drugs to "go global" is to present convincing global clinical research data, and at the same time, pass regulatory reviews in different regions. Facing massive amounts of data and review documents, digital management methods are needed to empower the process. Therefore, companies with "going global" aspirations must also focus on digital management.
 

Disclaimer: Under no circumstances shall the information or opinions expressed in this article constitute investment advice to any person.