- China biopharma out-licensing surged nearly tenfold to a record $137.7B in 2025, with 2026 already on pace to break that mark as average deal sizes jump 76% year-over-year.
- Patent cliff pressures and R&D cost-cutting are driving Big Pharma to Chinese-developed drug candidates, with analysts predicting China’s early-stage pipeline advantage will persist for “at least the next several years.”
Cross-border licensing deals between Greater China-based biopharmaceutical companies and global drugmakers reached an unprecedented $137.7 billion in 2025, a nearly tenfold increase from 2021’s $13.9 billion, according to China-based data provider PharmCube. Industry analysts now predict 2026 will surpass that record, as Big Pharma’s patent cliff pressures and R&D cost-cutting accelerate demand for externally sourced drug candidates.
Deal Volume and Value Accelerating Into 2026
Companies in the Greater China region, encompassing mainland China, Hong Kong, Macau, and Taiwan, completed 186 cross-border out-licensing deals in 2025, up from 65 in 2021, according to PharmCube data reported by Reuters. As of mid-February 2026, the deal count had already reached 38, with total disclosed value approaching $49 billion.
The average deal size so far in 2026 stands at approximately $1.3 billion — a 76% increase over the 2025 average and roughly a sixfold increase from 2021 levels. Two headline transactions are driving much of that value: AstraZeneca’s obesity drug licensing deal with China’s CSPC Pharmaceutical, worth up to $18.5 billion, and AbbVie’s cancer-focused agreement with RemeGen, valued at up to $5.6 billion.
Patent Cliffs and R&D Pressures Fuel Western Demand
The surge in China-sourced licensing reflects strategic necessity as much as innovation quality. Industry advisory firm Vision Life Sciences projects that patent expirations could strip as much as $200 billion in annual global pharmaceutical revenue between 2026 and 2030. Among the companies facing significant near-term patent exposure are Merck, whose diabetes therapy Januvia/Janumet faces generic competition, and Pfizer and Astellas, whose oncology drug Xtandi is similarly exposed.
For global drugmakers confronting these revenue gaps while also cutting internal R&D budgets, licensing China-developed assets offers a capital-efficient alternative to full mergers and acquisitions. Analytics firm Pitchbook, in a January 2026 report, characterized the dynamic as Western companies “essentially acquiring de-risked innovation hubs at a fraction of the cost of full M&A.”
China’s Early-Stage Pipeline Edge ‘Likely to Persist’
China’s ascent from contract manufacturer to innovation source has been rapid and data-backed. According to Pitchbook analyst Ben Zercher, China’s biotech ecosystem has “gained the lead” in generating early-stage drug candidates, and that advantage is expected to endure.
Supporting that view: the number of innovative drugs submitted for human testing by Chinese developers rose from 688 in 2019 to 2,298 in 2023. Since 2021, China has registered nearly twice as many first-in-human trials for next-generation antibodies, including bispecific antibodies and antibody-drug conjugates, as the U.S. and Europe combined, citing data from Nature Reviews Drug Discovery.
Pitchbook also noted that since 2016, advanced modalities such as nucleic acid-based therapies and cell and gene therapy candidates have consistently grown their share of Chinese venture deal activity. By 2025, these asset types accounted for nearly 50% of deal volume in China, reflecting investor preference for high-complexity innovation over incremental, fast-follower molecules.
Oncology Remains Core, but Scope Is Widening
Next-generation antibodies, particularly for oncology, dominated China-originated licensing in 2025, accounting for roughly half of recorded cross-border deals. Notably, nearly three-quarters of those pacts involved assets in preclinical or Phase 1 testing, signaling growing global confidence in China-generated clinical data.
Looking ahead, Pitchbook expects antibody-focused oncology dealmaking to continue, but anticipates that cell and gene therapies, obesity programs, and targeted drug delivery technologies will attract increasing interest from both investors and large pharmaceutical companies. A combination of clinical advances in China and a funding environment in the U.S. that remains constrained is expected to make international partnerships in those modalities more attractive.
Industry Consensus: China Is a Structural Force
China accounted for approximately one-third of global industry licensing spending in 2025, according to industry data cited at the 2026 J.P. Morgan Healthcare Conference, with roughly one-quarter of all licensed assets now originating from the region.
Major Western investors are adapting accordingly. European venture firm Andera Partners has begun licensing China-developed assets to U.S. and European drug developers. MPM BioImpact opened a Singapore office in 2024 specifically to screen Asia-Pacific opportunities, with its team now evaluating thousands of Chinese-developed candidates.
“Rising U.S. costs and funding constraints are increasing reliance on external innovation, reinforcing incentives for cross-border licensing and partnerships,” Pitchbook’s report said. “These dynamics serve to entrench China’s early-stage asset advantage, which will likely persist for at least the next several years.”
