On February 26, 2026, against the backdrop of the Dutch embassies and consulates in China organizing exchanges for the Dutch biopharmaceutical delegation in China, an online seminar focused on the development of China’s biopharmaceutical industry was successfully held. As an important pre-departure exchange activity before the delegation arrived, this seminar aimed to help Dutch biopharmaceutical companies and related institutions gain a deeper understanding of the development trends, industrial structure, and investment environment of the Chinese innovative drug market. Members of the Dutch delegation, representatives from the Dutch embassies and consulates in China, and relevant industry professionals participated in this exchange. Jiang Tengfei, Executive Director of Life Science Consulting at Frost & Sullivan Frost & Sullivan China’s Medical Health Division, was invited as a speaker to share insights on the development stage and market opportunities of China’s biotechnology industry.
Source: Press release, F&S Analysis
Jiang Tengfei mentioned that the Chinese innovative drug industry is entering an important phase of structural recovery following capital adjustments, and global business development (BD) cooperation is gradually becoming the core driver of industry growth. According to SULLIVAN data, the number of license-out transactions by Chinese Biotech companies increased from 94 in 2024 to 157 in 2025, a 67% increase; the total transaction value rose from $51.9 billion to $1,357 billion, a 161% increase, with the average size of individual transactions reaching approximately $820 million. Meanwhile, the proportion of down payments in total transaction amounts decreased from 7.8% to 5.2%, indicating that global pharmaceutical companies are focusing more on risk control and long-term value realization while expanding cooperation scales. In terms of transaction structure, among the 340 license-out transactions from 2023 to 2025, about three-quarters were contributed by Biotech companies, showing that Chinese innovative companies have become an important source of global innovation supply. However, capital and cooperation opportunities are increasingly concentrated in companies with differentiated technologies and clinical certainty.
Looking at the source of funds, the development model of China’s innovative drug industry is also changing. In 2025, down payments for license-out transactions accounted for 52% of overall financing sources in China’s biopharmaceutical sector, exceeding equity investment and IPO financing for the first time, marking a new stage where China’s Biotech moves from “growth driven by financing” to “development driven by global cooperation”. Additionally, the value differentiation among different types of companies continues to expand: in 2025, the average down payment ratio for innovative drug license-out transactions by Chinese Biopharma companies reached 10.4%, compared to only 4.2% for Biotech companies. The market is revaluing many early or homogeneous projects, and truly significant transactions that can drive capital market recovery include mega-scale cross-border partnerships such as 3SBio and Pfizer’s PD-1/VEGF dual antibody SSGJ-707 and Innovent andTakeda—PD-1/IL-2α-bias fusion proteinIBI363etc.). In 2025, the innovation drug sector in Hong Kong stocks showed significant recovery.Hang Seng Innovation Drug Index（basified on the initial day of 2025）achieved a temporary increase of approximately 2.7 times, indicating that international capital’s confidence in the long-term potential of China’s innovative drugs is gradually returning. Overall, China’s biopharmaceutical industry is entering a new development stage centered on global cooperation capabilities, asset quality, and commercialization certainty, providing new opportunities for international companies to participate in the Chinese market.
As global pharmaceutical companies continuously improve asset screening standards, the innovative drug market is entering a more rational evaluation phase. Homogeneous projects face valuation pressures, while long-tail transaction risks are gradually eliminated. The quality of clinical data and global development potential become the core criteria for cooperation and investment. Jiang Tengfei said that China’s innovative drug industry is entering a new stage of global competition, where corporate competitiveness shifts from mere R&D efficiency to BD capabilities and global collaborative development abilities. Capital also concentrates on high-quality assets with platform and international potential. Against the background of rational return of capital and deepening cross-border cooperation, China’s Biotech is gradually integrating into the global innovation system, and the industry as a whole is accelerating from “growth driven by transactions” to a new stage of “growth driven by quality”.
