2023 China Pharma BD Report: 124 Deals Surpass $50 Billion in Total Transaction Value

Key Points

1. In 2023, the total amount of BD transactions by Chinese pharmaceutical companies reached a new high of $50.59 billion, with 124 transaction events. License out became the keyword for BD transactions this year.

2. ADC, large molecules, and small molecule drugs are the main areas of China's BD transaction market, with the total value of ADC transactions reaching $24.67 billion, accounting for nearly half of the annual transaction volume.

3. BD transactions focus on a diversified layout of disease areas, with transaction assets mainly consisting of Phase III clinical and marketed projects.

4. BioNTech, AstraZeneca, and Huadong Medicine were the most active companies in China's pharmaceutical BD transactions in 2023.

 1.1  In 2023, the total amount of BD transactions by Chinese pharmaceutical companies reached 50.59 billion US dollars, with "License out" being the key term.

As of December 28,In 2023, the total amount of China's pharmaceutical BD transactions was US$50.59 billion, with a total of 124 transaction events.Compared with the 2022 BD transaction data of Chinese pharmaceutical companies, the total transaction volume in 2023 increased by $14.73 billion, a year-on-year growth of 41%, but the number of transaction events decreased by 76, a year-on-year decline of 38%.

Analysis of BD Transaction Types of Chinese Pharmaceutical Enterprises in 2023The number of License out events was 53, with a total transaction value of up to 42.59 billion US dollars, accounting for 84.2%.The proportion of License-in in China's pharmaceutical transactions has started to decrease, with only 21 deals amounting to $4.28 billion. Domestic BD transactions by Chinese pharmaceutical companies remain highly active, with 50 deals accounting for 40.3%.

In 2023, License out transactions became the top priority of the year, with numerous large-scale deals being reached.Among the 23 large BD deals exceeding $1 billion, 18 were License out transactions.Among them, the event where Biokin reached an ADC pipeline licensing cooperation agreement with BMS for 8.4 billion dollars ranked first, attracting much attention.

1.2 October trading events hit a new high, with total trading volume peaking in December

Analyzing the BD transaction situation of Chinese pharmaceutical companies on a monthly basis, the overall trend shows a low period from June to September, with an explosive trend starting in October. The number of transactions and transaction amounts from January to May were relatively stable. In June, although the number of transactions reached 11, there were fewer cross-border transactions, with most being domestic strategic cooperation deals within China.

In October, the number of China's pharmaceutical BD transactions peaked at 18, with a total transaction value as high as 7 billion US dollars.In December, the BD transaction amount reached its highest point of the year at USD 14.94 billion.The surge in trading trends from October to December was driven by the License out of ADC pipelines in China.

2.1 ADC Explosion, Becoming the Hottest Field in BD Transactions

A further analysis of the drug types in China's pharmaceutical companies' BD deals in 2023 shows that ADCs, large-molecule drugs, and small-molecule drugs remain the main focus of the BD transaction market.

The ADC field has become the hottest area this year with an overwhelming advantage in transaction amount.This year, there have been 20 BD deals in the ADC field, amounting to USD 24.67 billion.Among them, there were 14 License out events, involving domestic pharmaceutical companies including Hengrui Medicine, ImmunoBio, Yilian Bio, Biokin, Hansoh Pharma, Beryl Therapeutics, Limelight Medicine, Harbour BioMed, Guide Medicine, CSPC Pharmaceutical Group, Xennova, and Connaught/LePu Bio, among others. The acquiring parties include both MNCs and Biotechs. MNCs are AstraZeneca, Pfizer, BMS, GSK, Merck, Eisai, etc.; Biotech companies include BioNTech, Pheon Therapeutics, Pyramid Biosciences, etc.

In addition, Yilian Biologics, DualityBio, and Hansoh Pharma have reached more than one BD deal for ADC pipelines. BioNTech has completed "purchases" from both Yilian and DualityBio, two ADC companies.

This year, in the field of macromolecular drugs, a total of 24 deals worth $8.5 billion were completed. Apart from monoclonal antibodies, bispecific antibody drugs have become a trend. Small molecule drugs, as one of the mainstays in the pharmaceutical field, ranked first in the number of deals across all fields, with a total of 36 deals achieving a total transaction value of $10.93 billion.

2.2 Indications Blossom, with Phase III Clinical Trials and Marketed Products Taking the Lead

From the perspective of indications, oncology remains the focus of BD transactions this year. However, BD transaction events in the fields of autoimmune diseases, infectious diseases, metabolic disorders, and rare diseases are beginning to increase, showing a flourishing development trend. Corporate BD transactions are placing more emphasis on addressing unmet clinical needs.

From the perspective of clinical progress, projects in Phase III clinical trials and those already on the market account for 55%. In the current capital winter environment, pharmaceutical companies highly value how to commercialize their products as soon as possible. Projects in Phase III clinical trials are about to enter the commercialization stage, holding more potential to generate revenue for enterprises. Meanwhile, drugs already on the market will further expand their reach through licensing deals, accelerating product globalization and achieving a win-win outcome for both parties involved in the transaction.

3.1 TOP10 Total Transaction Value Exceeds $23 Billion, Biokin's Expensive ADC Deal Draws Attention

Among the TOP 10 BD deals of Chinese pharmaceutical companies this year, the first nine were all License out deals, and there were six ADC-related deals. It can be seen that China's outbound deals have developed strongly, becoming the keyword of the year. In the process of MNCs globally seeking cooperation with ADC companies, Chinese pharmaceutical companies have become the first choice, highlighting the innovation and leadership of domestic companies in the ADC field.

10 transaction events contributed a total of $23.44 billion in transaction value, accounting for 46% of the annual transaction volume.Among them, the bispecific ADC deal between Biokin and BMS has drawn significant industry attention due to its transaction value of $8.4 billion. Hengsen Pharma and GSK completed two BD deals for ADC pipelines in October and December respectively, with a total amount reaching $3.28 billion.

In addition to ADC, transactions in other fields also demonstrate the cutting-edge nature of the current pharmaceutical industry. For instance, in the highly popular GLP-1 field this year, Chengyi Biotechnology and AstraZeneca have reached a collaboration on small molecule GLP-1 drugs; Wuxi Biologics and GSK's partnership, as well as Innovent Biologics and Astellas' collaboration, are aimed at bispecific or multispecific antibody drugs with greater development potential in the large molecule antibody drug sector.

3.2 The Most Active Companies in China's Pharmaceutical BD Deals —— BioNTech, AstraZeneca, Huadong Medicine

In 2023 China's pharmaceutical BD transactions, many companies were active on the front stage. Among them, BioNTech, AstraZeneca, and Huadong Medicine stood out the most in this year's BD transactions.

BioNTech has frequently introduced projects in China's innovative market this year, reaching a total of seven transaction collaborations, earning it the title of "Super Purchaser." BioNTech’s enthusiasm for "purchasing" in the Chinese market and its high frequency of collaborations can be attributed partly to the strong capabilities of China's innovative pharmaceutical companies and partly to the numerous advantages BioNTech can offer its partners.

AstraZeneca Reached 6 Collaboration Deals with Chinese Companies in 2023, Making Multi-Faceted Layouts in ADC Pipeline, Metabolic Diseases, and Cell Therapy Fields. Notably, on December 26, AstraZeneca’s $1.2 Billion Acquisition of Gracell Biotechnologies, a Leading CAR-T Company in China, Marked the First-Ever Complete Acquisition of a Chinese Biotech by an MNC in the History of China's Biopharmaceutical Industry.

Huadong Medicine can be regarded as the most active pharmaceutical company in China this year. In 2023, Huadong Medicine and its subsidiaries reached seven collaboration deals, maintaining close cooperation with domestic Biotech companies while also partnering with foreign pharmaceutical enterprises. As a long-established pharmaceutical company, Huadong Medicine is transitioning from a traditional chemical and generic drug enterprise to an innovative one. Judging from Huadong Medicine's business development (BD) activities, it is currently in the stage of diversifying its operations and gradually strengthening its global innovative R&D ecosystem.

Statement and Data Sources:

1. The data in this report comes from publicly disclosed information such as public media and listing announcements. The 2022 related BD transaction data is sourced from the VCBeat Capital's "2022 China Pharmaceutical Licensing BD Transactions Annual Report."

2. The data cutoff date in the article is December 28, 2023. Data published after December 28, 2023, is not included in the statistical scope of this report.

3. All transaction amounts are converted into US dollars, with a unified exchange rate standard: 1 RMB = 0.14 USD, 1 EUR = 1.11 USD;

4. Unify the transaction amount in the millions/tens of millions/hundreds of millions as 1 million/10 million/100 million;

5. The data may be incomplete. If there are any errors or omissions, your constructive criticism is welcome.