China's Pharma Industry Gains Global Recognition as License-Out Deals Surge

　　【Pharmaceutical Network | Industry News】 Licensing (authorized cooperation) has become a widely adopted approach for product introduction in the pharmaceutical industry in recent years. Currently, Chinese pharmaceutical companies have already executed a substantial number of license-in deals for overseas products, while license-out transactions remain relatively limited. However, over the past two years, license-out activities in the pharmaceutical sector have also begun to become increasingly active.
 

In September 2021, multiple license-out transactions were announced. For instance, on September 8, Bio-Thera announced a collaboration agreement with Sandoz AG (Sandoz), a subsidiary of Novartis, under which it licensed the commercialization rights for its independently developed BAT1706 (bevacizumab biosimilar) injection in certain regions to Sandoz on a paid basis. The licensed territories cover the United States, Europe, Canada, and most other international markets not covered by existing BAT1706 partnerships. On the same day, Luye Pharma Group announced that its subsidiary, Luye Pharma Switzerland, entered into a collaboration agreement with Esteve Pharmaceuticals, S.A. (ESTEVE), granting ESTEVE exclusive commercialization rights for the development of a rivastigmine multi-day transdermal patch in Spain. On September 26, GenScript ProBio announced a partnership with AskGene, granting AskGene a non-exclusive global license to a single-domain antibody targeting a specific immune checkpoint for the discovery, development, and commercialization of the antibody and its derivative products.
 

Since the beginning of October this year, license-out transactions have also been relatively active.
 

For example, on October 29, Fosun Pharmaceutical announced that its holding subsidiary, Fuchuang Pharmaceuticals, has entered into a License Agreement with Eli Lilly and Company (NYSE: LLY), granting Eli Lilly and Company exclusive rights to Fuchuang Pharmaceuticals' BCL-2 selective small-molecule inhibitor FCN-338 in all regions worldwide excluding mainland China, Hong Kong, and Macau.
 

Pursuant to the 《License Agreement》, Eli Lilly will pay Fuchuang Pharma an upfront payment of USD 40 million, along with up to USD 400 million in development and sales milestone payments, plus sales royalties in the mid-to-high single-digit percentage range based on annual net sales within the Eli Lilly territory, totaling USD 440 million.
 

On October 11, Youhe Pharma, a wholly-owned subsidiary of Biocytogen, announced the signing of a strategic collaboration agreement with TRACON Pharmaceuticals (hereinafter referred to as "TRACON"), under which TRACON will be responsible for the clinical development and commercialization of YH001 for soft tissue sarcoma and multiple mutually agreed indications in North America, primarily the United States, while Youhe Pharma will retain the development and commercialization rights for other indications in the region.
 

YH001 is a humanized IgG1 monoclonal antibody targeting CTLA-4, designed to treat various cancers by enhancing the body’s intrinsic immune response against tumor cells and promoting the depletion of regulatory T cells (Tregs) within the tumor microenvironment. Under this collaboration, TRACON will bear the clinical development costs for the licensed indications in North America. Yohoo Biopharma will supply YH001 to TRACON at a negotiated price and will receive tiered double-digit percentage royalties on net sales in North America from TRACON.
 

Shanghai Pharmaceuticals Holding Co., Ltd. recently also announced that it has signed a formal agreement with HUYABIO INTERNATIONAL (hereinafter referred to as “HUYABIO”) titled the “Agreement on the Out-Licensing of Overseas Rights of SPH6162 by Shanghai Pharma to HUYABIO.” Under this license-out collaboration, HUYABIO will pay milestone payments of up to USD 292.5 million, plus a 3–6% sales royalty, to secure the exclusive rights for the development, manufacturing, and commercialization of Shanghai Pharma’s novel anti-tumor drug SPH6162 outside China, as well as sublicensing rights. Additionally, both parties plan to establish a joint development committee responsible for coordinating the global development and commercialization of the product. This marks Shanghai Pharma’s first overseas licensing project and represents a milestone event signifying a significant advancement in the company’s R&D and innovation capabilities.
 

According to analysts, following rapid and robust growth in recent years, China's pharmaceutical industry has garnered increasing international attention and recognition. The development of innovative drug projects has shifted from "license-in" to "license-out," with cross-border collaborations becoming increasingly frequent, deal sizes expanding, and cooperation models growing increasingly diversified.