(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)
By Katrina Hamlin
HONG KONG, Jan 5 (Reuters Breakingviews) - China is on a medically induced high. In 2025, homegrown biotech champions like 3SBio (1530.HK) and CSPC Pharmaceutical (1093.HK) struck dozens of deals to license drugs and technology to multinational giants such as Pfizer (PFE.N) . A return of entrepreneurial Chinese with experience working for Big Pharma, alongside more trustworthy data behind clinical trials in the People’s Republic, is fuelling the trend. It’s part of a bigger shift towards more sophisticated products, services and exports. The combined total value of Chinese biotechnology companies’ overseas licensing deals surpassed $123 billion in 2025, according to data provider PharmCube, from $52 billion for all of 2024. That included multiple blockbuster deals valued at over $1 billion, factoring in upfront payments, payouts for hitting clinical and commercial hurdles, royalties and other benefits. The flurry of activity is far from over, lawyers and bankers told Breakingviews. Licensees include Pfizer, which committed to a deal worth more than $6 billion all-in to access a cancer treatment from Hong Kong-listed 3SBio, as well as AstraZeneca (AZN.L) , Merck (MRK.N) , Roche and peers. Subsidies, lower costs and an abundance of science graduates make the process of drug discovery in China less expensive: 3SBio’s average annual research and development budget from 2020 to 2024 was 11% of revenue, while Pfizer’s was 17%, LSEG data show. In the past, multinationals and investors hesitated to trust data from firms in the world’s second-largest economy. However, today’s standards are considered far more robust. Big Pharma even outsource their own trials to Chinese specialists such as $39 billion Wuxi AppTec (603259.SS) . For their part, the Chinese parties need funds, and drug prices are effectively capped. For some, the licensing success also helps to crystallise their own valuations ahead of public offerings. The Hang Seng Biotech Index (.HSBIO) leapt 65% last year, trouncing the main benchmark’s 28% rise. Hong Kong and mainland stock exchanges hosted more than 50 biotech deals, raising nearly $9 billion – seven times the 2024 tally, per Dealogic. Geopolitics could emerge as a spoiler. The U.S. has considered imposing restrictions on some medicines and treatments from China, the New York Times reported last year. But so long as China is making the best products, as well as the cheapest, there will be global buyers.
The same story is playing out from automobiles to artificial intelligence. Consumers, companies and investors around the world are starting to splurge on “Made-in-China” meds, gadgets and more for the sake of the innovation and technology, not just the price point. Follow @KatrinaHamlin on X
CONTEXT NEWS The combined total value of Chinese biotech companies’ out-licensing deals to overseas groups surpassed $123 billion in 2025, according to pharmaceutical data provider PharmCube, compared with $52 billion for all of 2024. An out-licensing deal is an agreement where a drug developer allows another company to develop and commercialise drugs or technology in certain markets, usually in exchange for an upfront payment, milestone fees, royalties or other benefits. Hong Kong and mainland stock exchanges hosted 57 equity capital market deals involving issuers in the biotechnology sector in 2025. Those deals raised a total of $8.7 billion over the year, according to Dealogic, around seven times more than in all of 2024.
Chinese biotech companies’ overseas licensing deals have taken off
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/BRV-BRV/klpyjmadwvg/chart.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1420" height="892" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/BRV-BRV/klpyjmadwvg/chart.png"/>
(Editing by Una Galani; Production by Ujjaini Dutta and Aditya Srivastav)

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China's biotech sector is thriving, with homegrown companies like 3SBio and CSPC Pharmaceutical striking over $123 billion in overseas licensing deals in 2025, a significant increase from $52 billion in 2024. This surge is driven by improved clinical trial data and a return of experienced entrepreneurs. Major multinationals, including Pfizer and AstraZeneca, are increasingly outsourcing trials to Chinese firms. The Hang Seng Biotech Index rose 65% last year, reflecting the sector's growth, despite potential geopolitical challenges. The trend indicates a shift towards valuing innovation from China, not just cost.

- In 2025, Chinese biotech firms, including 3SBio and CSPC Pharmaceutical, significantly increased their licensing deals, surpassing $123 billion, up from $52 billion in 2024.  
- The trend is fueled by experienced entrepreneurs returning to China, improved clinical trial data, and competitive research costs compared to multinational companies.  
- Despite potential geopolitical challenges, the demand for innovative Chinese products continues to grow among global buyers, driven by both quality and affordability.

BREAKINGVIEWS-Biotech boom shows innovation is now made in China