– This is the script of CNBC's financial news report for China's CCTV on September 18, 2025.
At the beginning of this year, China's AI model DeepSeek captured global attention for its low development cost and strong performance. Now, a similar "DeepSeek moment" is unfolding in the biotech sector: Chinese pharmaceutical companies are moving from the era of generic drugs into an era of innovative medicines, drawing a wave of international collaborations.
That moment first appeared last fall, when Chinese biotech Akeso announced its cancer drug Ivonescimab had outperformed Merck's blockbuster Keytruda in a study. The drug had already been licensed in 2022 to U.S. biopharma company Summit Therapeutics for $500 million. When the results were released, Summit's stock price surged, briefly adding billions of dollars to its market value.
Since then, more global drugmakers have announced partnerships with Chinese firms—The main form of collaboration is licensing — meaning the foreign partner obtains rights to develop, manufacture and commercialize the Chinese drug or technology outside China.
On a macro level, data from U.S. biopharma analytics firm DealForma published in May show that Chinese biotech firms now account for 42% of all major global licensing deals — those with upfront payments of $50 million or more. That's up sharply from 27% last year and 20% the year before.
Examples include Pfizer paying $1.25 billion upfront in May for overseas rights to a drug from 3SBio. In the first half of this year alone, AbbVie, Merck, and Regeneron signed licensing agreements worth several billion dollars with Chinese biotech firms.
Notably, British drugmaker AstraZeneca has signed licensing deals with more than 10 Chinese biotechs over the past two years.
Pascal Soriot
CEO
British pharmaceutical giant AstraZeneca
"We believe in our industry China will be a fundamental part of innovation in the future, and so we decided to expand our research and development presence in the country so we can better tap into this innovation, better connect with the local ecosystem."
So why are global drugmakers so optimistic? Industry experts point out that the recent breakthroughs in China's biotech sector are the result of years of sustained investment by both the government and companies. It is this foundation that has enabled Chinese pharmaceutical firms to develop high-quality innovative drugs.
Wong Kok Hoi
Founder
APS Asset Management
"The policy makers, know that they must encourage the biotech companies to invest in innovation. And this is really been done. This has been done for quite a number of years. So in coming years, I think we'll see a lot of success and progress from these sectors."
Another factor that cannot be overlooked is the efficiency and lower costs of Chinese drugmakers in R&D. Bloomberg has reported that in early-stage cancer and obesity trials, patient recruitment in China takes only half the time compared with the United States
From the perspective of global pharma companies, Jefferies analysts point out they are under pressure from falling drug prices and the looming expiry of patents on blockbuster drugs.
That is why one cross-border licensing deal after another has emerged. And and that has fueled a rally in the stock market.
So far this year, Hong Kong's Hang Seng Biotech Index has surged nearly 80%. By contrast, the S&P Biotechnology Select Industry Index has fallen about 2% over the same period.
Finally, industry insiders caution that if China continues to develop drugs comparable to those in the U.S. at a fraction of the cost, the Trump administration could view it as a potential threat and move to block such transactions. They stress, however, that from the patient's perspective, greater global competition in biopharma is a good thing, and international collaboration should be protected.