$28.7 Billion in Three Licensing Deals: Chinese Pharma Rewrites the Playbook

In early summer 2026, the global pharmaceutical industry unveiled three major announcements in quick succession.

On May 12, Hengrui Pharma announced a collaboration with BMS valued at up to $15.2 billion, with all 13 projects remaining in the early stages of research and development. Just seventeen days later, the capital markets witnessed a "double impact": Innovent Bio partnered with Pfizer to secure a $10.5 billion deal for its early-stage oncology pipeline, while Haisco soon after announced a $3.05 billion R&D agreement with Eli Lilly focused on small-molecule targets. The total value of these three transactions surpassed $28.7 billion, marking a new peak in licensing deals for Chinese innovative drugs going global.

Notably, none of the three major transactions involved mature pipelines. Pfizer, Eli Lilly, and BMS have all placed their collaborative focus on early-stage R&D assets, such as target discovery and preclinical candidate molecules.

For a long time, the core asset of Chinese innovative drugs going global has been clinically validated, mature pipelines; however, this cluster of deals has broken with past transaction conventions. The "product-selling era" of Chinese innovative drugs—shifting from selling individual products to exporting entire R&D systems—is coming to an end, as seen in this series of billion-dollar orders.

The three major licensing deals announced within a span of just over ten days should not be viewed simply as three independent cross-border collaboration agreements. The unified transaction structure clearly reveals a shift in industry trends.

None of the 13 programs in the collaboration between Hengrui Pharma and BMS have entered clinical trials. The entire transaction is structured into three tiers: four early-stage oncology and hematology programs developed independently by Hengrui, four early-stage immunology programs owned by BMS, and five novel molecules jointly developed by both parties leveraging Hengrui's drug discovery platform. BMS made an upfront payment of $950 million along with phased payments, with subsequent tiered milestones for R&D, regulatory approval, and commercialization covering the full lifecycle.

The division of rights and responsibilities between the two parties is clearly defined: Hengrui Pharma assumes full responsibility for early-stage clinical development of all projects to accelerate clinical proof-of-concept, while BMS undertakes late-stage global clinical trials, overseas regulatory registration, and commercialization. The two parties exchange regional rights; Hengrui secures exclusive rights in Greater China for BMS's self-developed pipeline, while BMS obtains exclusive overseas development rights for Hengrui's assets.

In just half a month, two similar deals were simultaneously finalized.

Innovent Bio and Pfizer reached an agreement on 12 early-stage and discovery-stage oncology projects, with a total consideration of $10.5 billion, comprising eight early-stage pipeline assets from Innovent's proprietary ADC and multispecific antibody platforms, plus four new projects nominated by Pfizer and incubated on Innovent's platform.

Unlike previous one-time single-product licensing deals, the two parties have established a tiered collaboration model: four core projects adopt a co-development and co-commercialization mechanism, with global sharing of R&D costs and profit-sharing in the U.S. and European markets, while Innovent permanently retains commercialization rights in the Greater China region. The agreement specifies that Innovent is responsible for the entire early-stage development process, from target screening and molecule construction to Phase I clinical trials, while Pfizer holds the option to decide whether to proceed with global clinical development. The $650 million upfront payment is essentially an advance payment for Innovent Bio's large-molecule innovation platform.

Following in Innovent's footsteps, Haisco announced a strategic collaboration with Eli Lilly, with a maximum transaction value of $3.05 billion. The partnership framework further de-emphasizes the traditional "product-centric" model. Under the agreement, Eli Lilly will designate up to five novel drug targets, for which Haisco will leverage its proprietary small-molecule innovation platform and new drug development capabilities to conduct complete early-stage R&D from target identification to candidate compound selection. Eli Lilly retains an exclusive global option to develop each project.

The $87 million upfront payment directly corresponds to the full-process R&D services for target discovery and compound optimization, rather than to any specific molecular asset. What Eli Lilly is acquiring is not a specific investigational drug from Haisco, but rather its stable capability to continuously generate a pipeline of original small-molecule innovations. Even if the candidate molecules resulting from the collaboration fail in clinical trials, the value of Haisco's early-stage R&D services remains valid.

A horizontal comparison of mainstream cross-border licensing deal strategies in recent years makes industry changes clear at a glance.

In the past, overseas pharmaceutical giants were only willing to acquire mature pipelines at Phase II clinical trials or later, with validated data. Chinese pharmaceutical companies could only generate revenue by licensing out single assets for overseas development, resulting in not only lower transaction values but also prolonged payment cycles. Moreover, the industry widely perceived that domestic enterprises lacked source innovation capabilities, making it difficult to support joint development of early-stage targets.

Today, Pfizer, BMS, and Eli Lilly are proactively securing preclinical source assets, willing to bear the high failure risks of early-stage R&D and pay substantial upfront payments to lock in domestic R&D platforms. This trend is driven by bidirectional shifts in global pharmaceutical supply and demand: overseas pharmaceutical companies are collectively facing patent cliffs, declining internal new drug discovery efficiency, and persistently high costs for building in-house early-stage R&D pipelines. Meanwhile, Hengrui Pharma, Innovent Bio, and Haisco have, through years of technological accumulation, established comprehensive R&D systems covering target screening, molecular optimization, preclinical evaluation, and rapid Phase I clinical translation. They have developed unique advantages in R&D productivity, cost-effectiveness, and differentiated molecular design, thereby gaining recognition from multinational pharmaceutical companies for their source innovation capabilities.

According to Dr. Wang Haisheng, founder of SicaGene, MNCs' adoption of this transaction strategy is also based on a careful assessment of their own risks and returns.

The innovative drug industry is fiercely competitive, with a scarcity of high-quality, differentiated late-stage pipelines, forcing MNCs to pivot toward early-stage projects. Although China's innovative drug R&D system is characterized by being "fast, cost-effective, and efficient," this does not alter the fundamental principles of drug development: late-stage projects have a higher likelihood of successful commercialization, whereas early-stage projects suffer from lower success rates.

Therefore, licensing for late-stage projects can be highly selective, whereas early-stage projects must be acquired in bundles to diversify risk. "For instance, by acquiring a dozen early-stage projects, at least one should yield a marketable drug," Wang Haisheng further elaborated on the deal-making logic of MNCs.

Based on the licensing logic of bundled purchases of early-stage pipelines, the market has evolved various forms of transaction structures: 1) The seller's pipeline is sufficiently extensive and high-quality, so all assets involved in the transaction originate from the seller; 2) The seller's pipeline is insufficient in volume or fails to meet the buyer's requirements, prompting the buyer to provide or designate several pipelines for co-development (both Hengrui Pharma and Innovent Bio have adopted this combined model in their licensing deals); 3) All pipelines are projects designated by the buyer, as seen in the transaction structure between Haisco and Eli Lilly.

However, regardless of the considerations on the part of MNCs, recognition of the early-stage R&D capabilities of domestic innovative pharmaceutical companies is a prerequisite for deal-making.

Over the past few years, domestic innovative pharmaceutical companies have generally adopted the model of out-licensing single products for overseas monetization, an approach that inherently suffers from structural flaws.

First, the revenue structure is highly unstable, with corporate cash flow entirely tied to the clinical and commercialization progress of a single molecule. After the licensing deal for a single product is finalized, many companies often need to wait several years to incubate the next pipeline asset suitable for global markets, resulting in significant revenue gaps. Second, the pressure for short-term monetization has driven the industry to cluster around fast-follow homogeneous targets, making it difficult for companies to build long-term innovation barriers.

In the capital markets, valuation anchors at that time focused solely on clinical data from late-stage, mature pipelines, while R&D platforms capable of continuously generating early-stage pipelines were regarded merely as secondary considerations.

The three partnerships that Hengrui Pharma, Innovent Bio, and Haisco have struck with MNCs represent a new business model: pharmaceutical companies are no longer selling single drugs but are opening up their entire drug discovery systems to establish long-term, multi-project, tiered revenue-sharing relationships with MNCs. The monetization vehicle has thus been upgraded from a "single molecule" to an "R&D factory capable of mass-producing innovative pipelines."

Innovent Bio's transaction model is the most representative: Pfizer paid to secure early-stage development collaboration rights for 12 projects, which include both Innovent's existing in-house pipeline and novel targets to be jointly developed by both parties in the future. The cooperation framework encompasses Innovent's ADC platform, multispecific antibody platform, and its rapid Phase I clinical translation capabilities.

Continuous generation of molecular candidates throughout the collaboration period ensures ongoing receipt of R&D milestone payments. Upon achieving global commercialization of core pipeline assets, the parties can further share in long-term sales royalties from the European and American markets under the Co-Co model, thereby capturing revenue across the drug's entire lifecycle.

Haisco's collaboration with Eli Lilly completely departs from the traditional logic of finished drug transactions. Under a pure R&D service model, Eli Lilly provides only target nominations, while Haisco's small-molecule platform undertakes the entire preclinical development process. Payments are released upon the completion of corresponding R&D milestones for each target. Even if candidate molecules fail in clinical trials, the upfront R&D service revenue remains unaffected, allowing stable commissioned target development to generate a steady cash flow.

In short, Chinese innovative pharmaceutical companies have evolved from mere "drug suppliers" to "global new drug R&D service providers." Their core business model has shifted fundamentally from selling products to selling systems, technologies, and sustained innovation capabilities.

The new business model of platform-driven, sustained monetization has also directly reshaped valuation standards for innovative pharmaceutical companies in the secondary market; a single-product narrative can no longer support long-term corporate valuations.

During the 2026 ASCO Annual Meeting, Akeso Biopharma announced pivotal Phase III clinical data for ivonescimab, a PD-1/VEGF bispecific antibody. As a first-line treatment for advanced squamous non-small cell lung cancer (NSCLC), ivonescimab in combination with chemotherapy reduced the risk of death by 34% and significantly prolonged overall survival, earning widespread industry recognition for its scientific value and differentiated product advantages. However, following the release of these impressive clinical results, Akeso's Hong Kong-listed stock price fell rather than rose, sending a clear negative signal from the capital markets.

Setting aside short-term sentiment fluctuations in the secondary market, investors' deeper concerns are primarily focused on the product's mid-to-long-term commercialization capabilities. The commercialization ceiling for innovative drugs in China is low, and success depends on sales force coverage, academic promotion, and channel operations. Furthermore, potential negative factors, such as the expansion of the COINS Act, may impact the overseas expansion paths of Chinese innovative pharmaceutical companies.

The market has thus formed a clear consensus: The value of an innovative pharmaceutical company cannot rely solely on scientific strengths such as clinical data and targeting technologies; the ability to establish a mature commercialization and operational system is equally a core metric determining the company's long-term valuation.

From our perspective, in the era of R&D system monetization, comprehensive industrial capabilities are divided into three progressive dimensions:

The first level is technological foundational capabilities: A differentiated, proprietary R&D platform featuring a diverse pipeline encompassing small molecules, peptides, ADCs, and bispecific antibodies. It possesses original capabilities in proprietary target screening and novel molecular scaffold construction, which form the foundation for external licensing of early-stage assets and constitute the core prerequisite for collaborations with MNCs.

The second layer is systematic translation capability: Standardized preclinical evaluation, rapid clinical development, and a global multi-center clinical operations system can reliably advance early-stage molecules into the clinical phase, reduce clinical risks for MNCs upon handover, and enhance the value of platform collaborations.

The third layer is commercialization capability: Established in-house commercial teams, reimbursement operations, and academic promotion systems in China, coupled with experience in overseas registration and cross-border commercial cooperation, thereby enabling the final realization of R&D value.

For innovative pharmaceutical companies, clinical data represents only one component of industrial value. The core foundation of long-term corporate value consists of proprietary original platforms, standardized translation processes, and a closed-loop global commercialization framework. In the future, Chinese innovative pharmaceutical enterprises that can withstand market cycles and sustainably gain recognition from global capital will inevitably be those that move beyond single-product competition and focus on building robust systemic capabilities.

Chinese innovative pharmaceutical companies will have truly completed their industrial leap to becoming global sources of innovation only when they no longer rely on single-product licensing deals for cash flow, but instead leverage their proprietary, end-to-end R&D engines to actively participate in the global creation of new drugs.