Global big pharma aggressively acquiring Chinese candidates; upfront payments more than double.
Overlaps in ADC and bispecific antibody sectors pose a direct challenge to K-Bio; Beijing targets 25% global share of "first-in-class" drugs by 2030.
The Chinese biotech sector is effectively shedding its "follower" label. Last year, the total value of technology export deals by biotech firms in the Greater China region reached a record $137.7 billion. Global pharmaceutical giants—including Novartis, Novo Nordisk, and Pfizer—are now providing hundreds of millions of dollars in upfront payments to secure access to Chinese drug candidates.
The Chinese government’s ambitions are even higher. It has announced a goal to ensure that by 2030, at least 25% of all "first-in-class" (FIC) global drugs—those utilizing novel targets or mechanisms of action—are developed within China. The government also plans to grow the innovative drug industry by more than 20% annually.
The primary concern for the domestic Korean biotech industry is the specific fields where China’s technology exports are expanding. These areas significantly overlap with technologies where companies like LigaChem Biosciences and ABL Bio have already established strong track records, particularly in antibody-drug conjugates (ADCs) and bispecific or multispecific antibodies. China is rapidly cementing its presence in these critical markets, intensifying competition for licensing deals with global big pharma.
Technology Exports Reach $137.7 Billion… A Tenfold Increase from 2021
The "2026-2030 Pharmaceutical Industry Development Plan," released by ten Chinese government ministries including the Ministry of Industry and Information Technology, explicitly targets a 25% or greater global share for China-developed FIC drugs by 2030.
The targets are aggressive: a compound annual growth rate (CAGR) of over 20% for the innovative drug industry, the establishment of 50 pharmaceutical companies with annual sales exceeding 10 billion yuan, and the production of five blockbuster drugs with global sales exceeding $1 billion each.
The technology trading market has already grown at a blistering pace. According to Reuters, the value of technology export deals signed by biotech firms in Greater China last year hit $137.7 billion—approximately ten times the 2021 level.
This year has seen a surge not only in total contract values but also in upfront payments. The average deal size increased 76% year-on-year to $1.3 billion, while average upfront payments more than doubled to $77.7 million.
On the 2nd of this month, Novartis signed a deal with China’s Abogen Biosciences worth up to $7.8 billion, securing options for the mRNA-based CD3×CD19 T-cell engager ABO2203 and other candidates with an upfront payment of $575 million.
On the 29th of last month, Novo Nordisk selected Jiangsu Hengrui’s HRS-1596, a once-weekly oral GLP-1/GIP dual agonist. The deal covers global rights outside of mainland China, Hong Kong, Macau, and Taiwan, with an upfront payment of $300 million and a total potential value of up to $2.6 billion including development and sales milestones.
In May, Pfizer signed a deal with Innovent Biologics worth up to $10.5 billion, encompassing 12 programs including ADCs and multispecific antibodies, with an upfront payment of $650 million.
Just a few years ago, the primary strengths attributed to Chinese biotech were rapid development cycles and low costs. Recent contracts, however, show a significant shift in valuation, particularly regarding upfront capital.
Overlapping in ADC and Bispecific Antibodies: A Shared Battleground for K-Bio
The sectors where Chinese firms are clinching these major deals are the same ones where Korean biotech companies have focused their R&D efforts—notably in ADCs and bispecific/multispecific antibodies.
LigaChem Biosciences has successfully executed multiple technology exports based on its ADC platform and pipeline. However, global pharmaceutical companies are increasingly turning to China to acquire ADC candidates as well.
In the field of bispecific and multispecific antibodies, ABL Bio has secured technology export deals with companies like Sanofi and GSK based on its own proprietary platforms. Notably, the $10.5 billion deal Pfizer signed with Innovent in May included several multispecific antibody programs.
Alteogen operates in a distinct space, focusing on its ALT-B4 platform, which converts intravenous (IV) drugs into subcutaneous (SC) injections. While its core business differs from the competitive ADC and bispecific antibody sectors, its technology is currently being commercialized in major markets, beginning with the SC formulation of Keytruda. Last month, Alteogen signed an option and licensing agreement with Novartis worth up to $3.223 billion.
Korean companies possess distinct advantages, including extensive experience and robust data sets accumulated through global clinical trials and previous technology transfers. During the Hankyung Bio Insight Forum held in February, representatives from Daiichi Sankyo, Johnson & Johnson, and Boehringer Ingelheim expressed high regard for the technological prowess and data integrity of Korean biotech firms.
As the number of major deals by Chinese firms continues to rise, big pharma now has a wider pool of candidates to evaluate. Given that Korean companies were early leaders in exporting ADC and bispecific antibody technologies, the rapid growth in contract values and upfront payments offered by Chinese competitors has made the landscape significantly more intense. Korean firms now face a scenario where they must compete not only on technological superiority but also on the strength of clinical data, development speed, and contract terms.
