Exclusive interview with Parexel: after securing 30% of global innovative assets, what's next for China's innovative pharmaceuticals?

By 2025, approximately 30% of the world's innovative drug assets came from China. The transaction amounts of License-out deals continue to hit record highs, the Newco model has become a new pathway for going global, and Hong Kong, China has emerged as one of the largest secondary financing markets for biopharmaceuticals worldwide. These figures and concepts together paint an inspiring picture: China's innovative drug industry is making a challenging leap from "imitation" to "originality."

But behind this picture, another question is emerging: What happens when the molecules are good enough?

Over the past decade, the capability accumulation in China's innovative drug industry has mainly focused on the drug discovery end — finding good targets, designing excellent molecules, and generating strong data. However, for a molecule to progress from the laboratory to the global market, drug discovery is only half the journey. The latter half, involving clinical development — designing global multicenter trials, navigating different regulatory systems, and screening and executing with overseas clinical institutions — represents an entirely different set of capabilities.

This set of capabilities took MNCs decades to build: For example, Pfizer's China R&D Center was established in 2005 and is expected to complete its transformation from a "learner and follower" to a "global project contributor" by 2025. Its development trajectory clearly demonstrates the lengthy process through which MNCs construct their global clinical development capabilities – starting from initially handling only basic tasks such as data entry, gradually taking on responsibilities like global drug safety warnings and global regulatory submissions, and now being able to independently conduct key clinical pharmacology studies and directly support global approvals.

The globalization capacity building of China's Biotech is entering a stage of systematic construction.

The industry widely recognizes that "transactions do not equate to globalization." By 2025, over 52% of the molecules in outbound assets were expected to be in preclinical or Phase I stages at the time of licensing, indicating a forward shift in value realization. This precisely illustrates that "realizing R&D value in advance is a phased choice when enterprises' global capabilities are not yet mature."

Chinese innovative pharmaceutical companies are exploring two paths: BeOne Medicines has chosen to operate globally from the start, while Innovent Biologics first solidified its position in the domestic market before planning for international expansion. Moreover, the integration of governance and jurisdictional rules, the ability to continuously meet clinical and registration requirements, and the establishment of a robust manufacturing and supply chain system are all vivid illustrations of the "learning process" that Chinese innovative pharmaceutical companies are undergoing.

This also explains why three global executives from Parexel, a top global CRO, chose to gather here and share their observations —

Charlotte Moser has worked in the oncology field for over 30 years, serving as a physician, researcher, and head of commercial clinical development, and now serves as the Chief Medical Officer of Parexel. Chris Learn, Senior Vice President of Global Medical Services at Parexel and Head of Cell and Gene Therapy, has overseen the clinical trial design of many advanced therapies, achieving significant progress. Vera Zheng, Senior Vice President of Corporate Strategy for the Asia-Pacific region and Head of Greater China at Parexel, frequently travels between the US and China, observing wave after wave of Chinese Biotechs hesitating repeatedly at the threshold of globalization.

Together, their observations form a picture of the "next phase" for China's innovative drug industry——It's not about whether the molecules are good enough, but whether the clinical development capabilities can keep up.

"Global innovative drug development is undergoing a shift from 'scale-driven' to 'precision-driven'," said Charlotte. "This is not a problem unique to China, but a paradigm shift across the entire industry. However, if China can learn from global experiences and use biomarkers and selective targets to narrow down the target population, it will be able to move through this phase more quickly and become a pioneer in similar research."

Three global executives from Parexel represent different functions in the field of drug research and development. From various dimensions, they each dissected the ongoing transformation and the real challenges faced by China's innovative drugs within it.

Charlotte Moser, who has worked in the oncology field for over 30 years, described two cognitive revolutions within the industry.

First, our understanding of the immune system is becoming more profound. In the past, people did not understand why the immune system could effectively eliminate bacteria and viruses but was powerless against tumors. Today, scientists have gained a deeper understanding of how tumor cells suppress the immune system to achieve unlimited proliferation. "Our knowledge of how cancer manipulates the human immune system has given rise to an entirely new class of therapies, enabling long-term disease control—harnessing the body's own immune system to fight cancer," said Charlotte.

The second is the understanding of tumor heterogeneity. More than 30 years ago, breast cancer was usually treated as a single disease in clinical trials. Scientists now know that tumors originating from the same organ may contain multiple subtypes, which have completely different pathogenic mechanisms. "Each type of cancer has different subtypes, and they differ significantly in pathogenic mechanisms, thus requiring different treatment approaches."

These two cognitive revolutions have directly changed the underlying logic of drug development.

In the past, a clinical trial for a new anticancer drug could enroll 5,000 patients and test the disease as a single entity. Now, the development strategy has shifted to "precise verification" — using new histology and other disease biomarkers in smaller, precisely screened patient populations to determine as early as possible whether the drug is effective and for which patients.

"We emphasize making early judgments with as few participants as possible while minimizing the risk of patients' exposure to potential adverse effects," said Charlotte. This means early-stage research is becoming more critical and complex. "In Phase I studies, we aim to identify the most suitable patient population while testing the drug's safety and efficacy."

She gave an example. In Phase I studies, there are far more questions that need to be answered now than a decade ago: Which parts of the body will the drug distribute to after entering the human body? Which tissues will it act on? Which biomarkers are most suitable for screening and evaluating effectiveness? Has the disease truly been controlled? What side effects will the drug have on other organs? Has the immune system been successfully activated? If these questions are not clearly answered before rushing into large-scale trials, failure is almost inevitable.

This is not a trend unique to China. Whether in Europe, the United States, Japan, or China, the logic of innovative drug development is shifting from "making it bigger" to "making it more precise." However, China has a unique advantage: it doesn't need to reinvent this methodology. It can directly draw on the experience accumulated globally over the past three decades, while also having access to high-quality testing equipment and personnel, applying this knowledge to today's new drug development.

If Charlotte sees a shift in methodology — from "large-scale trials" to "precise validation" — then Chris Learn sees a shift in treatment goals. "The focus of treatment is moving from controlling symptoms to addressing the underlying causes of the disease and the pathophysiological mechanisms behind it," he said.

In his view, the difference between the two determines the fundamental logic of drug development. If it is merely about controlling symptoms, long-term or even repeated treatments are often required; but if the root cause can be identified and fundamentally addressed, patients may achieve long-term recovery through a single treatment. "In the past, we were very cautious in our medical terminology and rarely used the word 'cure,'" he said. "But now, there are indeed some gene therapies with data showing that patients remain disease-free five years after treatment."

The shift in methodology and the migration of goals have jointly reconstructed the underlying logic of global innovative drug research and development. This set of rules, which is being redefined, is a completely new subject for both Chinese Biotech companies and MNCs.

Paradigm shifts sound grand, but in reality, they manifest as specific, headache-inducing challenges.

The first challenge: the failure rate remains high.

By 2026, the failure rate of clinical trials for cancer drugs remained high, with industry-recognized data showing that the success rate of cancer drugs progressing from Phase I clinical trials to gaining FDA approval has long been below 5%. This is not a secret, but few people openly discuss it.

Charlotte explained that the purpose of Phase I clinical trials is to test and iteratively improve. However, the industry is using "old paradigm methods" to develop "new paradigm drugs." "In the early stages, we need to answer as many questions as possible: Where will the drug distribute in the body? Which tissues will it act on? Is the disease truly being eliminated?" she said. "This provides us with a platform to identify the patient population that will benefit the most. If these questions are not adequately addressed early on and we rush into large-scale clinical trials, failure is highly likely."

The solution points to the same direction: precision. More precise patient screening, more precise endpoint design, and more precise early validation. To achieve these, continuous learning from past project experiences is required—not "trial and error" with patients, but "prediction" with data.

The second challenge is that CGT increases the complexity by an order of magnitude.

If the clinical development of targeted cancer drugs is like "walking a path with a map," then cell and gene therapy (CGT) is akin to "paving a new road."

Chris Learn provided a set of specific data: the content of electronic data capture (EDC) related documents for CGT clinical trials is about 50% more than that of traditional drug research. "To some extent, this type of clinical trial is closer to academic research, rather than large-scale studies fully supported by a mature industrial system like those in traditional pharmaceuticals," he said.

The root of complexity lies in the fact that CGT products may have long-term, or even permanent, effects on the human body. Base editing and promoter modifications involved in gene editing can potentially alter the DNA sequence and nucleic acid structure of the human body. "Evaluating these long-term impacts requires more data, deeper research, and more systematic validation," Chris pointed out.

The third challenge: clinical development is becoming the new bottleneck.

In the past decade, the bottleneck of innovative drugs has been in drug discovery—whether good targets can be found and good molecules designed. Now, this bottleneck is shifting to clinical development, that is, how to test multiple newly discovered assets.

Whether it is MNCs or Biotechs, they all face the same challenge: how to complete high-quality clinical validation with fewer patients, in less time, and at a lower cost. This is not just a matter of funding but a comprehensive competition of methodology, experience systems, and data capabilities.

Charlotte pointed out that the focus of early-stage research should not be on "speed," but on "precision." "Before moving to the next step of larger-scale population studies, we need to gather as much information as possible in the early stages and compare it with existing standard treatments to identify its potential advantages. The use of innovative statistical designs and historical data is crucial because they can significantly reduce time and unnecessary patient exposure."

This is exactly the role transition that the global CRO industry is undergoing — from "trial executor" to "knowledge transmitter." As Charlotte said, "We (Parexel) want to help everyone avoid repeating mistakes and not use patients for 'trial and error.'"

Against the backdrop of a global shift in the R&D paradigm, China is in a unique position.

In terms of quantity, China's innovative drug assets have already occupied a significant share of the global pipeline. According to Vera Zheng, by 2025, about 30% of the world's innovative drug assets  came from China, with a considerable portion of projects being out-licensed at the preclinical or very early stages. This data is largely consistent with statistics from industry analysis firms— in recent years, China's share in the global new drug R&D pipeline has been continuously rising, making it the second-largest source of innovative drugs after the United States.

But "entry" does not equal "leadership". Vera admitted that the other side of the numbers is that a large portion of Chinese assets are licensed out at a very early stage, "Some projects are licensed out after completing only Chinese clinical trials, without fully entering the global development stage." This means that the commercial value of these assets has not been fully realized.

The good news is that China has unique advantages.

First, speed. Vera cited industry data to emphasize that China's speed in the drug discovery phase is 2-3 times faster than overseas, with cost savings of 60%-70%; in the clinical development phase, patient recruitment speed can be increased by about 2-5 times, and costs can be reduced by up to half. This is not achieved by being "cheap" — China has significant advantages in patient recruitment efficiency and the speed of initiating clinical trials.

Second is the policy environment. China is about to fully implement the latest version of the ICH GCP standards, aligning the overall clinical environment and data quality with international standards. At the same time, the review cycle for new drugs has been significantly shortened, in some cases to around one month, approaching the efficiency level of the FDA.

Third is market growth. According to a McKinsey report, by 2028, the scale of China's innovative drug market is expected to double compared to 2023, with an overall annual compound growth rate of nearly 17%.

These factors, taken together, are causing a fundamental shift in China's role in the global R&D system. "China is transforming from a 'market' into an 'innovation engine,'" said Vera. She cited a more precise expression: in the past, it was "Made in China"; now it is shifting toward "Create in China" and "Create with China."

In this transformation, the role of CROs is being redefined.

Parexel's positioning is a "two-way bridge." On one hand, it helps MNCs and overseas Biotech companies "come in," leveraging China's infrastructure and R&D capabilities to accelerate innovation; on the other hand, it helps Chinese Biotech companies "go out," promoting global multi-center clinical trials and overseas registration.

"We have been doing two things," Vera said, "helping Chinese pharmaceutical companies 'go global' and helping MNCs and overseas biotech firms 'enter the Chinese market'."

This "two-way" role requires CROs to possess two seemingly contradictory capabilities: global perspective and local execution.

Charlotte pointed out that conducting certain clinical trials requires practical, on-the-ground execution experience. "Whether the trial is conducted in Sydney, Shanghai, or Boston makes a significant difference. It requires an operations team with global experience that also understands the local culture and can communicate in the local language."

Chris emphasized another key point: Involve people with real experience in daily operations. "Senior executives, seasoned leaders, and experts from various fields all participate in the daily processes of the trials." In cutting-edge fields like CGT, this "expert embedding" model is particularly crucial — because the technology is so new, there are no ready-made templates to follow.

Vera revealed that Parexel has an "APAC Knowledge Center" internally, which shares real project practical experiences globally through the participation of over sixty experts in the Asia-Pacific region. Meanwhile, in terms of regulatory strategy, Parexel has a very senior expert network worldwide, including some experts who have worked in regulatory agencies or large pharmaceutical companies, capable of providing regulatory strategy support to clients at the early stage of trial design.

This "knowledge transfer" capability is becoming the rarest differentiated advantage in the CRO industry. As Charlotte said, "We represent a very broad system of professional capabilities, covering multiple fields such as medicine, clinical operations and data metrics, statistics, real-world data, and regulatory affairs."

30% of the global pipeline is a milestone for China's innovative drugs. But the next milestone is probably not about increasing this number to 40% or 50%.

As Charlotte said, the focus of early research is not on being "fast" but on being "precise," obtaining accurate insights from smaller populations. Chris Learn sees a shift in objectives — from "controlling symptoms" to "targeting the root cause."

Currently, China has proven its capabilities in drug discovery. From me-too to me-better, and now to FIC/BIC, China's innovative drugs have reached the global stage at the molecular design level. However, clinical development — a bottleneck shared globally — is the real watershed. What is needed is not more funding, but deeper methodological accumulation, stronger experiential systems, and more systematic data capabilities.

At the same time, Parexel is also sending a signal: global CRO giants are redefining China from a "service market" to an "innovation partner."

For Chinese pharmaceutical companies, a new test has begun. As Vera said, "Create in China" has been achieved. "Create in China" and "Create with China" are the real propositions for the next journey.