5 days ago
China's Biotech Is Quietly Eating Big Pharma's Lunch
Chinese biotech is no longer playing catch-up it's becoming the main event. In 2024, more than 1,250 innovative drugs entered development in China, nearly overtaking the US and leaving the EU behind. This isn't just a numbers game. Chinese firms like Akeso (AKESF) are now developing therapies that are outperforming global blockbusters like Merck's Keytruda in head-to-head trials. The quality leap has been fast, fueled by regulatory reforms, foreign-trained scientists, and an R&D machine that moves at blistering speed. Data from Norstella shows China now earns more expedited drug reviews than the EU a signal that Western regulators are paying attention.
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Multinational pharma isn't waiting around. Pfizer (NYSE:PFE) just cut a $1.2 billion upfront deal with 3SBio. Summit Therapeutics paid $500 million for rights to Akeso's cancer therapy. These aren't niche plays they're big bets on the future. And with China's massive patient pool and streamlined hospital network, companies can run trials in half the time (and at a fraction of the cost) compared to the US. That speed lets Chinese firms launch multiple shots on goal and global players are lining up to license the winners. From cell therapies to obesity drugs, the East is becoming the place where the drug pipeline gets built.
But approval is still a long game. US regulators aren't greenlighting drugs based solely on China trial data not yet. And with rising geopolitical tension, some in Washington are sounding alarms over biotech dependencies. Still, the shift is underway. In just five years, the number of top-ranked Chinese drug innovators has quadrupled. Investors watching this space aren't asking whether China will lead the next wave of biotech innovation. They're asking how soon.
This article first appeared on GuruFocus.
