Chinese Innovative Drugs Surge Overseas with Dual Strategies of Independent and Partnered Expansion

　　【Pharmaceutical Network Industry DynamicsRecently, Biokin announced that as of March 7, it had received an $800 million upfront payment from Bristol-Myers Squibb (referred to as "BMS"). It is reported that previously, the company and BMS reached a collaboration on the "going overseas" of an antibody-drug conjugate (ADC) BL-B01D1. The total potential value of this deal could reach up to $8.4 billion, breaking the record for China's innovative drug licensing deals.
 

Industry insiders pointed out that there are two main models for Chinese innovative pharmaceutical companies to expand overseas: one is independent expansion. This means that Chinese pharmaceutical companies independently conduct clinical trials overseas, then apply for market approval and sell the product after it is approved. The other is "sailing by borrowing a ship," including methods like license out (outward licensing), where Chinese pharmaceutical companies sell the overseas or global rights of their products to foreign enterprises. These foreign enterprises then take charge of subsequent clinical development, market application, production, and sales.
 

Among these, overseas licensing is highly favored by pharmaceutical companies in China. Industry experts point out that going global is a process where pharmaceutical companies leverage each other's strengths to integrate resources. This trend started several years ago, though at that time, the model was more focused on licensed imports. In recent years, innovative drug achievements from Chinese pharmaceutical companies have gradually emerged, but most of the progress has been in research. At the commercialization stage, even biopharmaceutical companies with two or three commercialized products often still report financial losses. The clinical development and commercial expansion of innovative drugs require partnerships with multinational pharmaceutical companies to tap into the global market. As a result, overseas licensing has become an inevitable choice for many companies at this stage.
 

It is reported that in recent years, the enthusiasm for overseas expansion of innovative drugs produced in China has been high, with a significant boom occurring in 2023. Data shows that in 2023, there were nearly 70 License out deals for innovative drugs in China, representing a year-on-year increase of 32%. The total disclosed amount of License out transactions in 2023 exceeded 46.5 billion US dollars, marking a year-on-year increase of 69%.
 

Entering 2024, the trend of innovative drugs going global remains strong. Data shows that in January 2024, Chinese pharmaceutical companies completed a total of 18 license out deals, representing a 260% increase compared to 5 deals in January 2023.
 

In addition to overseas licensing, the number of innovative drugs from China approved for marketing in the U.S. also hit a record high in 2023. Data shows that from the end of 2019 to 2023, a total of eight locally produced drugs from China received FDA approval in the United States, with five approved in 2023 alone. Statistics indicate that in the second half of 2023, four domestically produced innovative drugs successively entered the European and American markets: Tislelizumab from BeiGene, Toripalimab from Junshi Biosciences, Fruquintinib from Hutchmed, and Efgartigimod Alfa Injection from Billion Bio.
 

The industry pointed out that the goal of Chinese innovative drugs going overseas is to target the vast global market. So, how to help Chinese pharmaceutical innovation "go out"? Some industry insiders said that for innovative drugs to go global, the improvement of medical standards needs to take a step forward. In addition to having high-quality medical resources, it is also necessary to simultaneously cultivate excellent medical workers who can facilitate new drug research and development as well as clinical application.
 

Other experts suggested that, to promote innovative medicines "going global" at the national level, support is needed in two aspects: one is to concentrate resources on major tasks and integrate national resources for innovative drug development; the other is to create a fair competitive environment that supports innovation. Others pointed out that, for innovative drugs to "go global," companies must also focus on innovative R&D, ensure quality control, and under the guidance of national policies, continuously grow stronger and improve their standards.
 

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