China biopharma drug-development ecosystem and cross-border out-licensing Report Interpretation

Overview

This industry report updates Goldman Sachs’ assessment of China’s drug-development ecosystem ahead of its September 21–24 China biopharma investor trip. It concludes that China is increasingly central to global innovation sourcing and licensing, particularly in complex modalities, although clinical-data translatability and evolving US-China policy remain important constraints.

Core views

Goldman Sachs argues that China’s role in global drug development continues to expand. China-originated assets accounted for 37% of all global clinical-stage drugs as of August 2026, up from 35% in 2025, and represented 51% of new molecular entities entering the clinic globally year to date. China also accounted for roughly 38% of global licensing-deal value year to date and 23% of volume. China out-licensing deal value reached $118bn year to date, compared with $136bn in full-year 2025. The institution links this momentum to favorable Chinese regulatory reforms, cost-effective early-stage R&D, extensive engineering of drug components and increasing global recognition of local scientific capabilities. The report emphasizes that China’s contribution is especially meaningful in complex modalities. China-originated assets represented 57% of ADCs, 59% of bispecifics, 54% of cell therapies and 70% of RNAi/PROTAC/radioligand therapies entering the clinic globally year to date, compared with a 41–45% share in small molecules or monoclonal antibodies. Goldman Sachs sees this pattern as evidence that China’s engineering capabilities increasingly complement novel biology. It expects global pharmaceutical companies to make Chinese assets part of external-sourcing strategies as these capabilities accumulate, although it notes that much current development remains focused on me-too, me-better or engineered combinations of known targets rather than wholly novel targets. The report identifies oncology as the leading area for China biopharma out-licensing, with 51 deals completed in 2026 year to date, following 52, 61 and 71 deals in full-year 2023, 2024 and 2025, respectively. Oncology has contributed more than half of China out-licensing deals over the past three years. Global companies face approximately $440bn of annual revenue at risk from losses of exclusivity from 2028 to 2032, which Goldman Sachs says strengthens their incentive to source external innovation. The report cites Pfizer’s collaboration with Innovent covering 12 early-stage oncology programs, worth up to $10.5bn including a $650mn upfront payment and up to $9.85bn in milestones, and Bristol-Myers Squibb’s collaboration with Hengrui on 13 early-stage programs, worth up to $15.2bn including $950mn in upfront and near-term payments. These portfolio-scale arrangements indicate a shift from single-asset licensing toward broader platform and multi-asset partnerships. Clinical validation is central to the report’s argument that China-originated innovation can support further deal flow. Akeso/Summit’s ivonescimab is a key test of China-to-Western data translation: in the global HARMONi study, progression-free-survival hazard ratios were 0.55 for patients in China and 0.67 for the ex-China cohort, exceeding the 0.1 hazard-ratio delta investors had sought. With longer follow-up, the western cohort’s overall-survival hazard ratio improved to 0.76, in line with the Asian cohort and overall study population. Goldman Sachs is constructive into Summit’s global Phase 3 HARMONi-3 frontline squamous NSCLC readout in the second half of 2026, following Akeso’s China-only HARMONi-6 results showing PFS hazard ratio of 0.60, or 0.72 with additional follow-up, and overall-survival hazard ratio of 0.66. For Kelun Biotech and Merck’s TROP2 ADC sacituzumab tirumotecan, positive China Phase 3 data in first-line NSCLC improve visibility for the sac-TMT plus Keytruda regimen. In the PD-L1-positive subgroup of OptiTROP-Lung05, the report highlights a PFS hazard ratio of 0.35, a potential median PFS of more than 15 months and improved tolerability relative to Phase 2 observations. Goldman Sachs expects detailed OptiTROP-Lung06 data to clarify whether the combination can outperform Keytruda plus chemotherapy, which Merck management considers a high benchmark. The report cites overall-survival hazard ratios of 0.45–0.53 in late-line EGFR-mutant NSCLC and triple-negative breast cancer registrational studies, alongside 17 ongoing global Phase 3 trials and an initial wave of global readouts over the next 12 months. Despite growing early-stage importance, late-stage global validation remains limited. Only about 7% of China-originated candidates—40 of 543 Phase 3 or registrational-stage assets in China—have been evaluated in global Phase 3 trials or are under FDA review. Since 2019, the FDA has approved 520 new molecular entities and biologics, of which 12, or about 2%, were developed by Chinese pharmaceutical or biotechnology companies. Goldman Sachs points to Brukinsa and Carvykti as examples of China-originated products with practice-changing profiles. Brukinsa demonstrated superiority to Imbruvica in the Phase 3 ALPINE study, with PFS hazard ratio of 0.65, and was prescribed to 50% of new CLL patients after becoming the global BTK inhibitor leader in the third quarter of 2025. Carvykti generated $657mn in second-quarter 2026 sales and has shown overall-survival benefit in multiple myeloma. Beyond oncology, the report sees immunology and inflammation as the second major opportunity. The therapeutic area represented 29 of 128 China out-licensing deals year to date, while China’s share of immunology and inflammation trials rose to 13% in 2026 year to date from 4% in 2015. Goldman Sachs expects more attention because global immunology and inflammation spending is estimated at $271bn in 2030. It cites AstraZeneca’s ex-China licensing deal for Sino Biopharm’s Phase 3 PDE3/4 inhibitor TQC3721, worth up to $1.9bn with a $200mn upfront payment, and Avere’s licensing arrangement with Hansoh for HS-20118, worth up to $2.3bn including a $120mn upfront payment. However, the institution notes that translation of China clinical data may be more difficult in immunology than in oncology because many immunology endpoints depend on physician-assessment scorecards rather than imaging-based tumor-progression measures. The report also highlights obesity and cardiometabolic disease as an increasingly active licensing area. Examples include AstraZeneca’s January 2026 agreement with CSPC for eight experimental obesity and type 2 diabetes programs, worth up to $18.5bn with a $1.2bn upfront payment, as well as multi-agonist and longer-acting programs from United Laboratories and Hansoh. Goldman Sachs also notes Hengrui-linked Kailera’s global Phase 3 injectable GLP-1/GIP program, with oral Phase 2 data showing weight loss of up to 12.1% at 26 weeks. Policy is the principal offset to the otherwise constructive industry view. The proposed Biotech Investment National Security Act would expand the COINS Act to subject certain cross-border biotechnology licensing deals, joint ventures and intellectual-property transfers to Treasury review. The report notes approximately $136bn in China in-licensing deals in 2025 that could be relevant to these policy discussions. It also flags the US International Trade Commission’s investigation into Chinese biotechnology trade practices, with findings due January 22, 2027; the Treasury Department’s proposed-rulemaking deadline of March 2027; and PDUFA VII’s September 30, 2027 expiration as potential catalysts for China-related policy measures. In parallel, the report notes potential restrictions on cross-border genomic and clinical-trial data under the US Department of Justice’s Data Security Program, proposed US restrictions on FDA acceptance of China-generated clinical data, and Chinese scrutiny of offshore restructurings and equity-linked structures. Goldman Sachs concludes that MNC sourcing from China should continue, but the scope of future policy restrictions and evidence of global clinical-data translation will determine the durability and breadth of cross-border dealmaking.

Analysis framework

Goldman Sachs combines industry deal data, clinical-development and modality comparisons, examples of licensing transactions, management commentary from multinational biopharma companies, and policy analysis. It assesses China’s role from early-stage drug discovery through global late-stage validation, then considers how clinical evidence, pipeline needs and regulatory restrictions could affect future cross-border licensing.

Methodology notes

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Cross-border biopharma innovation sourcing and licensing transmission

  The report connects China’s R&D and clinical-development output with multinational companies’ pipeline needs, licensing activity, global development and commercialization.

• Industry AnalysisSupply-demand framework

  Global demand for replacement innovation versus China’s supply of drug candidates

  Goldman Sachs uses impending losses of exclusivity and global pipeline demand alongside China’s growing asset output to explain the rise in licensing and partnership activity.

• Event-Driven and Behavioral FinanceEvent-driven analysis

  Clinical readouts and policy milestones as catalysts

  The report identifies global trial readouts, Treasury rulemaking, the ITC investigation and PDUFA reauthorization as events that could change views on dealmaking and data translatability.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Akeso / Summit Therapeutics — ivonescimab

  A key test case for China-to-Western clinical-data translation in PD-1/VEGF bispecific antibodies.

  Strengths

  Encouraging China Phase 3 HARMONi-6 PFS and overall-survival data; global HARMONi follow-up supported improved translation evidence.

  Weaknesses

  Initial China versus ex-China PFS results showed a larger-than-expected difference.

  Comparison

  The global HARMONi-3 readout will be compared with Akeso’s China-only HARMONi-6 study.

  Risks

  Global Phase 3 results may not confirm the level of clinical benefit or China-to-Western data translatability.

• Kelun Biotech / Merck — sacituzumab tirumotecan (sac-TMT)

  A China-originated TROP2 ADC with global-development relevance in NSCLC.

  Strengths

  Positive China Phase 3 data, PFS hazard ratio of 0.35 in the PD-L1-positive subgroup, and 17 ongoing global Phase 3 trials.

  Weaknesses

  Global validation remains pending.

  Comparison

  The report assesses potential positioning against Keytruda plus chemotherapy.

  Risks

  Detailed Lung06 results and upcoming global trial readouts may not establish superiority or confirm translation.

• Innovent Biologics

  A prominent China innovator and participant in large global oncology partnerships.

  Strengths

  Pipeline of more than 30 assets, IO+ADC strategy and a Pfizer collaboration covering 12 early-stage oncology programs.

  Weaknesses

  Early-stage assets require continued clinical development and global validation.

  Comparison

  The Pfizer agreement illustrates broader platform-based partnerships rather than traditional single-asset licensing.

  Risks

  Cross-border policy restrictions and clinical-development risk could affect partnership value.

• Hengrui

  A leading China biopharma company participating in portfolio-scale global partnerships.

  Strengths

  Broad modality capabilities and a Bristol-Myers Squibb collaboration on 13 early-stage programs worth up to $15.2bn.

  Weaknesses

  The report does not provide company-specific financial forecasts or a rating.

  Comparison

  Its BMY transaction is presented as one of the largest China licensing transactions to date.

  Risks

  Policy scrutiny of licensing, joint ventures and intellectual-property transfers could create regulatory friction.

Key data

• China out-licensing deal value$118bn year to dateVersus $136bn for full-year 2025
• China share of global clinical-stage drugs37%As of August 2026, versus 35% in 2025
• China share of new molecular entities entering the clinic51%Global year-to-date share
• China share of global licensing-deal value~38%Year to date
• Oncology China out-licensing deals51Completed in 2026 year to date
• China-originated late-stage assets evaluated globally~7% (40 of 543 assets)Assets in global Phase 3 studies or under FDA review
• Global biopharma revenue at risk from loss of exclusivity~$440bn annuallyFrom 2028 to 2032
• Carvykti quarterly sales$657mnSecond quarter of 2026

Impact & implications

The report expects multinational biopharma companies to continue sourcing assets from China as they address pipeline needs and loss-of-exclusivity exposure. Larger, multi-asset partnerships and growing recognition of complex Chinese modalities support that view, but broader dealmaking depends on globally transferable clinical data and the eventual scope of US and Chinese regulatory constraints.

Risks

• US legislation or Treasury action could extend outbound-investment screening to biotechnology licensing deals, joint ventures and intellectual-property transfers involving China.
• Restrictions on cross-border genomic and clinical-trial data, or limits on FDA acceptance of China-generated trial data, could weaken the rationale for some licensing transactions.
• China-to-Western clinical-data translatability remains uncertain, particularly for immunology and inflammation trials using physician-assessment endpoints.
• China-originated assets have a relatively limited presence in global late-stage development, leaving substantial global-validation risk.
• Chinese scrutiny of offshore restructurings and equity-linked structures could add friction to NewCo and joint-venture deal structures.

What to watch

• Summit’s global Phase 3 HARMONi-3 frontline squamous NSCLC readout for ivonescimab in the second half of 2026.
• Detailed OptiTROP-Lung06 data and the first wave of global Phase 3 sac-TMT readouts over the next 12 months.
• The ITC investigation findings on Chinese biotechnology trade practices due January 22, 2027.
• Treasury’s Notice of Proposed Rulemaking, due by March 2027, for clarity on covered biotechnology technologies and transactions under COINS.
• PDUFA VII reauthorization ahead of its September 30, 2027 expiration.
• Whether clinical evidence and data translation support further large-scale China out-licensing across oncology, immunology and cardiometabolic disease.