Pharmaceutical companies entering the Chinese market are beginning to seek more than just new drug assets. As they finalize high-value licensing agreements, some firms are exploring whether China's methods for drug discovery and research could improve their own efficiency.
According to Fangning Zhang, leader of McKinsey & Company’s life sciences practice in Greater China, this interest is often not explicitly stated in deal announcements but exists beneath the surface. "Some of the recent deals, at least on paper, it is a licensing deal," Zhang told BioSpace. "But part of that thesis is actually because the licensor believes the speed and cost efficiency of these China innovators actually could help them [get] into clinical trials faster and potentially cheaper."
Major pharmaceutical companies are now considering their long-term strategies in China. Zhang noted that companies must decide whether to focus solely on acquiring drugs or also learn from local biopharma practices while operating there.
Zhang added, "What I’ve seen over this past year is a much higher level of curiosity to learn and understand the R&D capabilities that are happening in China in terms of the efficiency and speed." She emphasized that what is happening in China “has implications for everyone playing in the R&D or innovation world.”
Improving research and development (R&D) timelines has long been a goal for pharmaceutical firms. The process from discovery to approval can take up to 15 years and cost billions of dollars. Companies have recently invested heavily in artificial intelligence tools aimed at speeding up target identification and candidate selection.
However, Chinese-developed drugs still need to demonstrate effectiveness within populations similar to those found in key Western markets like the United States. For example, Summit Therapeutics was created around a Chinese asset but has faced challenges achieving results outside Asia comparable to its initial trials.
Despite these challenges, early-stage clinical trials remain attractive in China due to lower costs and simpler logistics compared with other regions. This allows global pharmaceutical firms to reduce risk before committing resources to larger studies elsewhere.
Western investors have also shown interest by establishing new biotechnology companies centered on Chinese-developed assets—a strategy highlighted by Zhang as an example of seeking early trial signals.
Chinese firms are adjusting their early programs with future international partnerships in mind by aligning initial clinical designs with global regulatory requirements.
A recent partnership between Massachusetts-based Crescent Biopharma and Sichuan Kelun-Biotech illustrates evolving collaboration models. On December 4, both companies announced an asset-swap agreement: Crescent contributed a PD-1/VEGF inhibitor called CR-001 while Kelun-Biotech provided an antibody-drug conjugate SKB105. Each will test therapy combinations regionally.
Kelun-Biotech CEO Michael Ge said: "By leveraging China’s abundant clinical resources and execution efficiency, we aim to expedite clinical development while rigorously maintaining the highest global standards... We believe this partnership creates a powerful synergy to maximize the potential of these two drug candidates for the treatment of patients in both China and the rest of the world."
Deal activity involving Chinese assets has grown significantly—from 8% to 30% of global licensing transactions over two years—indicating greater mutual opportunity between Eastern and Western firms.
"I would anticipate that every group of these players would actually do their homework, and eventually they need to figure out what’s the right strategy, what’s the right kind of playbook to capture the opportunity," Zhang said. "But the first is understanding."
While policy uncertainties such as tariffs continue impacting cross-border biopharma deals globally—including those involving China—companies remain interested due to ongoing opportunities despite trade tensions.
