China flips to drug supplier

In the first five months of 2026, Chinese biotech companies struck 169 cross-border licensing deals worth roughly $93 billion combined, an 87% jump on the same stretch of 2025, according to an HSBC research note surfaced this month. About $75 billion of that was out-licensing — Chinese-discovered drug candidates sold to Western pharma. As recently as 2020 that figure was essentially zero.

The average deal has reached $1.3 billion — up 76% in a year and roughly six times the 2021 level.

The reversal is the story. For years China was a buyer of foreign drugs; now global pharma shops there for its pipeline. AstraZeneca agreed to pay up to $18.5 billion for a weight-loss drug from CSPC Pharmaceutical; AbbVie committed up to $5.6 billion to RemeGen for a tumor treatment. The average deal has reached $1.3 billion — up 76% in a year and roughly six times the 2021 level. China now accounts for about 90% of the world's licensing of antibody-drug conjugates, one of oncology's hottest formats, and has more than 1,200 novel candidates in clinical trials.

Several forces are stacked behind this at once: a patent cliff pushing Western firms to cut discovery costs, a decade of Chinese investment in oncology molecules, and — more narrowly — a wave of AI-driven drug design. The AI thread is real but easy to overstate. One concrete case: Metis TechBio, an AI drug-design firm, signed a US cross-border deal less than two months after its Hong Kong IPO. It is one driver among several, not the engine.

What a shrinking pipeline of home-grown candidates means for Western labs is now a strategic question, not a curiosity — and it is why US regulators have begun weighing scrutiny of exactly these deals.