Amino Observation-Original Content by Innovative Drug Group
Author | Zheng Xiao
"Selling green seedlings" was once the most criticized aspect of China's innovative drug BD field.
Many pipelines in the early clinical stages can only secure a meager upfront payment, yet they still hand over the most valuable overseas rights to foreign pharmaceutical companies. This somewhat reluctant transaction model is a true reflection of the industry's early development phase and also highlights the weak position of China's innovative drugs in the global industrial chain.
But objectively speaking, this label can no longer define the current China innovative drug BD transactions.
Data speaks for itself. According to data shared by biopharmaceutical intelligence companies Evaluate and FierceBiotech, the average upfront value (including initial payment and near-term milestone payments) of China's innovative drugs for external BD has surged from $52 million in 2022 to $172 million as of 2026, a more than 230% increase in just three years.
The upward trend continues. As of now, the average upfront payment value of disclosed external licensing transactions in 2026 is 22% higher than the annual average for 2025.
This multi-year value growth can be described as the long-awaited "small victory" in the industry, marking a critical turning point for China's innovative drugs in the global innovation landscape, transitioning from "defense" to "offense":
Rather than passively ceding rights for survival, the company now leverages its robust R&D capabilities and differentiated pipeline strategy to steadily secure fair value returns in the global market.
The key to unlocking all this lies precisely in the fruits borne from those initial 'green seedling sales'.
01. Efficiency, Cost, and Competitiveness
In 2025, China's innovative drugs will reach a new level in overseas expansion. Data shows that the number of overseas licensing deals for China's innovative drugs reached 157, with a total transaction value of $135.655 billion.
Behind this, it not only reflects the value of China's innovative assets, but also the efficiency logic recognized by the market—the engineer dividend, R&D efficiency, and cost advantages of China are hard to shake.
This logic is widely recognized in the industry. According to McKinsey's 2023 report "China biopharma – Charting a path to value creation", the preclinical R&D efficiency of domestic pharmaceutical companies is 1-2 times that of overseas pharmaceutical companies, while the clinical phase efficiency can reach up to 5 times that of overseas pharmaceutical companies.
The cost advantage stems from a well-established industrial chain and lower labor costs. For instance, the labor costs for researchers and data analysts in clinical trials are only one-third to one-half of those in the United States, which significantly reduces the total R&D costs in large-scale clinical trials.
This also makes the "China-made" fast follow molecules continue to become one of the core assets in global BD transactions. After all, as an iterative innovation strategy, the fast follow approach has long existed and remains timeless in the field of innovative drugs.
As Zhu Yi, CEO of B&H, said, European and American pharmaceutical companies have almost lost their competitiveness against Chinese pharmaceutical companies in the fast follow field.
This view was also endorsed by the CEO of Pfizer. At the beginning of the year, Pfizer CEO Albert Bourla said in an interview: "China is catching up with the United States at half the cost and twice the speed."
02. Farewell to the era of cheap workshops
In fact, the BD value of China's innovative drugs today can no longer be summarized solely by efficiency and cost advantages. The growth in transaction value in the early stage, to some extent, is a direct reflection of this change.
The reason behind this is not hard to understand: China's innovative drug companies have higher value pursuits.
As FierceBiotech noted, with the global market's sustained demand for China's innovative assets over the years, Chinese biotech companies have begun to realize that they can demand higher upfront payments and milestone-based innovation-related payments. "Chinese companies are now aligning their upfront payment levels with the expected standards in deals with companies in other parts of the world."
Behind all this lies the increasingly solid confidence of China's innovative drugs in going global.
First, China's innovative assets have become an indispensable force in the global biopharmaceutical sector.
According to Evaluate data, in the bispecific antibody field, China's assets account for 48% of all clinical-stage projects globally; in ADC clinical trials, 51% include products from China's domestic entities; 48% of chimeric antigen receptor candidate trials incorporate assets initially developed in China. Market forecasts suggest that China's advantages in these fields will continue to expand in the future.
Secondly, the credibility of China's innovative drugs is steadily improving.
Previously, one of the most pressing concerns for the market regarding China's innovators was: Are China's clinical data reliable?
The development of innovative drugs is inherently full of uncertainties, and early-stage molecules often only have early clinical data from China. Whether the results are accidental or whether there are additional interfering factors has been a concern in overseas markets.
To some extent, the continuous wave of overseas expansion is responding to these doubts about the clinical quality of China. After all, as asset importers, overseas pharmaceutical companies will inevitably conduct rigorous analysis of China's clinical data before investing real money. When responding to the billion-dollar BD collaboration with Sanyo Pharmaceutical, a Pfizer executive explicitly revealed: "China's clinical quality is reliable."
Although this statement cannot represent the whole, it is sufficient to reflect an established fact—that the clinical quality of China has achieved a significant improvement.
More importantly, the innovation quality of China is not inferior at all. In terms of target layout, in hot tracks such as PD-1/VEGF bispecific antibodies and EGFR/HER3 bispecific ADCs, Chinese companies have achieved global leadership, even leading to the phenomenon of overseas pharmaceutical companies "copying China's work."
It is precisely from the profound transformation from scale quantity to core quality, combined with multiple favorable factors, that China's innovative drugs are gaining increasing confidence in going global.
03. The Flywheel of Industrial Upgrading is Turning
Looking back to the early years, the prevalence of the "selling green seedlings" model stemmed from the nascent stage of domestic biotechnology development—limited R&D capabilities, lack of clinical advancement experience, and immature commercialization systems. To secure the necessary funding and overseas development resources for survival, it became imperative to relinquish core intellectual property rights. This seemingly passive choice was, in fact, an inevitable path during the industry's initial phase and was not devoid of value.
The growth of any industry follows objective laws. At that time, "selling green seedlings" was essentially a "breakthrough strategy" for China's innovative drugs to gain global recognition.
Through overseas licensing of early-stage pipelines, China's innovative drugs not only secured much-needed R&D funding and survival space, but also opened the door to the global market, allowing overseas pharmaceutical companies to closely engage with China's innovative assets for the first time, laying the groundwork for subsequent in-depth collaboration.
This model of 'trading equity for opportunities and exposure for recognition' has not only endowed the industry with invaluable international experience, but also laid the groundwork for its subsequent value transformation.
Now, the turning point has long occurred. China's independent innovation forces have rapidly risen in just a few years, not only building the world's most complete biopharmaceutical industry chain, but also completely reshaping the global market's perception and expectations of China's innovative drugs through continuous technological breakthroughs and quality improvements. The former label of "low-cost follower" has been completely torn off, replaced by the new positioning of "efficient innovator" and "core value provider".
The market response has been direct and enthusiastic: global pharmaceutical giants are betting on China's innovative assets, with overseas companies participating in China's innovative drug BD deals now extending to nearly all top multinational drug firms. This means the transaction is no longer a simple asset trade, but a process where multiple parties connect and form a larger community of shared interests through resource complementarity and shared risks.
In other words, the significance of China's innovative drug BD has far exceeded the simple creation of commercial value, marking the transformation of China's position in the global biomedical industry chain from a marginal participant to a core co-builder.
Although Chinese pharmaceutical companies still need more time to join the ranks of the world's top pharmaceutical companies, it is undoubtedly short-sighted to underestimate the potential of China in the field of new mechanism discovery. As mentioned earlier, the continuous growth in the pre-BD transaction value of Chinese innovative drugs is by no means an accidental fluctuation of numbers, but rather the inevitable result of a qualitative change in industrial strength. The essence of this change is that the flywheel of industrial upgrading has entered a virtuous cycle of self-rotation.
One day, China's innovative drugs will occupy the core position they deserve in the global industrial chain. What we need to do is to give this accelerating industry more patience and confidence.
Disclaimer: This article is intended solely for knowledge exchange, sharing, and popular science purposes, and does not constitute commercial promotion, nor should it be regarded as medical guidance or medication advice. For copyright infringement, please contact us for removal.
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