Chinese Innovative Drugs Go Global: 25 Licensing Deals in Q1 Surpass $10 Billion, with ADCs as the Star Asset

　　【Pharmaceutical Network Industry DynamicsIn recent years, the momentum of China's innovative drug exports has been strong, opening up profit margins for pharmaceutical companies. According to data, in 2023, nearly 70 License-out transactions for innovative drugs occurred in China, with disclosed total transaction amounts exceeding 35 billion US dollars, setting a new record. Entering 2024, the enthusiasm for exporting domestically produced innovative drugs continues.
 

According to data statistics, as of April 30, the cumulative number of outbound licensing projects for innovative drugs produced in China reached 25, a year-on-year increase of 56%, with the total transaction value exceeding 10 billion US dollars. Public information shows that the 25 outbound licensing projects cover various fields such as antibodies and ADC drugs (antibody-drug conjugates). Among them, the number of outbound licensing transactions for ADC drugs reached six, with a cumulative amount exceeding 1.7 billion US dollars.
 

At the beginning of this year, MediLink announced that the company had reached a collaboration with Roche regarding its next-generation ADC product YL211 targeting c-MET. According to the agreement, MediLink will collaborate with Roche China Innovation Center (CICoR) to advance the YL211 project into Phase 1 clinical trials, after which Roche will take over further global development and commercialization. Roche will pay MediLink an upfront payment and near-term milestone payments totaling $50 million, along with potential development, regulatory, and commercial milestone payments of up to nearly $1 billion. According to MediLink, YL211 utilizes the company’s next-generation TMALIN ADC platform technology, combined with a highly specific c-MET antibody, and the product is currently in the clinical application stage.
 

Moreover, according to reports, another cross-border acquisition occurred in the ADC field on April 3. Danish biotech company Genmab announced that it would acquire Propharm Biologics for $1.8 billion in cash, approximately 13 billion yuan. It is reported that Propharm Biologics is an ADC company with a research pipeline covering multiple ADC drugs under development for solid tumors and hematological malignancies.
 

The market space for ADC drugs is vast. Data shows that from 2017 to 2021, the global market size of ADC drugs rapidly increased from $1.6 billion to $5.5 billion. It is projected that by 2030, the global market size could reach $63.8 billion, while the ADC market in China is expected to reach 68.9 billion yuan.
 

Another institution pointed out that these drugs could potentially generate huge profits. According to estimates, by 2028, ADCs may account for a $31 billion share of the global $375 billion cancer market. Another report stated that the market value of these drugs in 2023 is estimated to be approximately $9.7 billion.
 

Regarding why ADC drugs in China are favored by multinational pharmaceutical companies, industry insiders noted that with the increased support from domestic policies for research and innovation, coupled with the growing R&D capabilities of Chinese ADC drug innovators, technology platforms and pipelines for ADC drugs in China have seen a "surge" trend. Currently, Chinese pharmaceutical companies have relatively mature ADC R&D technologies.
 

ADC Drugs Are Becoming a "Hot Commodity" for Chinese Innovative Pharmaceutical Companies in "Outbound Licensing". It is reported that, in addition to this year, there were multiple licensing deals in the ADC drug field in 2023. For instance, in February 2023, Kang Nuoya Biomedical Technology (Chengdu) Co., Ltd. and Lepu Biotech jointly announced a global exclusive licensing agreement with AstraZeneca for CMG901. They received a prepayment of $63 million and potential additional milestone payments exceeding $1.1 billion related to R&D and sales, as well as tiered royalties in the low double digits. In October 2023, Hengrui Pharma licensed SHR-A1904, an investigational CLDN18.2 ADC injection independently developed and owned by the company, and another novel class 1 drug, HRS-1167 tablets, to Merck Healthcare for over €1.4 billion in total deal value.
 

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