YTD23 SEPT OUTLOOK:
CHINA BIOPHARMA GLOBAL TRANSACTION
INSIGHTS, TRENDS & ANALYSIS
Cross-licensing deals are expected to rebound in 2024. In 2023, small and medium-sized biotech companies have become more prudent with in-licensing. Global (Ex-China) out-licensing continues its growing trend from Chinese biotech.
Chinese companies will continue to search for true cutting-edge tech to differentiate in the market
More pre-clinical deals are made
Low-hanging fruits are gone
Oncology continues to dominate, as other disease indications are emerging
Chinese biotech companies are showing more interest in metabolic, inflammation/autoimmune and infectious disease pipelines
Diversified IPO platforms allow Chinese companies and JVs to assess more capital
7 major IPO markets for Chinese-based healthcare/biopharma companies to go listed
Average IPO size ~USD120M in 2023 (to date)
Market Highlights:
34 cross-border out-licensing deals were closed in 9M 2023 (Jan-Sep) vs 42 in 2022FY, a record high for the first 9 months
20 cross-border in-licensing deals were made by Chinese companies in 2023 (to date) vs 70+ in 2022FY. Due to Capital Market constraints, Chinese Biopharma is more prudent in buying foreign assets
31 China-originated IPOs in 9M 2023 (on par with 2019) raised a total of $3.5 Bn, avg. deal size dropped ~40%
MNCs show strong confidence in partnering with Chinese companies, evidenced by increasing collaborations between MNCs and Chinese companies
The number of China-to-West deals per year ranged from 9-14 from 2017-2020 VS the last three years had a range of 23-30 per year.
Western biopharma companies are increasingly turning to China for innovation.
Cross-border collaboration structures become more flexible
Chinese companies are continuing to search for cutting-edge technology to differentiate themselves in the market. A trend is continuing involving Preclinical and Phase I deals being made, indicating a focus on early-stage research and development. While the low-hanging fruits in the market have already been identified, companies are continuing to look for new opportunities distinguished by the mechanism of action and disease state. Oncology remains a dominant field, but there is also growing interest in metabolic, inflammation/autoimmune, and infectious disease pipelines.
Chinese biotech companies are diversifying their IPO platforms to access more capital with seven major recent IPOs averaging around $120 million in 2023. Cross-border licensing deals have reached a record high in the first nine months of the year, indicating increased collaboration between Chinese and foreign companies. Western biopharma companies are also turning to China to drive innovation as several MNC’s have tapped regional China pharmaceutical companies to augment their R&D capabilities. Through this drive for innovation, cross-border collaborations are becoming more flexible based on deal structure and scale.