US Drugmakers Deepen Ties with Chinese Biotechs
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US Drugmakers Deepen Ties with Chinese Biotechs
- US pharmaceutical companies have engaged in $53 billion worth of licensing deals with Chinese biopharma firms since 2020.
- Merck & Co. has significantly invested in Chinese partnerships, including a $2 billion licensing deal in March 2025 for a cardiovascular drug and multiple agreements with Kelun-Biotech for cancer treatments.
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US pharmaceutical companies are increasingly forging licensing deals and collaborations with Chinese biotech firms, driven by lower costs and access to innovative treatments, despite growing concerns from Washington. Since 2020, US drugmakers have collectively made $53 billion in licensing deals with Chinese biopharma companies. This trend has led to Chinese biotech companies supplying approximately one-third of new compounds entering US drug pipelines, a significant increase from a decade ago.
These partnerships are fueled by China’s advancements in clinical drug development and its capacity for faster, more affordable early-stage trials and manufacturing. For example, Merck & Co. secured a $2 billion licensing deal in March 2025 for a cardiovascular drug developed entirely in China and has multiple agreements with Kelun-Biotech for antibody-drug conjugates (ADCs) in cancer treatment. One such ADC, sac-TMT, developed with Kelun-Biotech, has shown promising results in Phase 3 trials in China for lung and endometrial cancers, with Merck pursuing 17 late-stage global studies for this drug.
However, these expanding tie-ups have raised alarms in Washington, with critics citing national security risks and a deepening dependence on China for early-stage innovation. Legislative efforts, such as the Biotech Investment National Security Act (BINSA) introduced in June 2026, aim to subject US pharmaceutical licensing deals and investments with Chinese entities to Treasury Department review. Despite these regulatory pressures, the trend of collaboration is expected to continue, with estimates suggesting the value of out-licensing agreements between Chinese biotechs and Western drugmakers could reach $240 billion in 2026, up from $136 billion in 2025.