Western Drug Companies Continue their Investments in China’s Biotech

As mentioned last year in our news brief, more and more Western drug companies are looking for new products in China. This trend has continued in 2024 as over 19 transactions valued at more than $18 billion USD were consummated in January alone. Over the last year, the number of out-licensed drugs from China is greater than the number of in-licensed drugs by Chinese firms. Beyond pure licensing deals, in early 2024 AstraZeneca made the first outright purchase of a Chinese drug company called Gracell Biotechnologies. The purchase price was $1.2 billion for Gracell’s cancer and autoimmune portfolio. Shortly thereafter, Novartis made the second outright purchase of a Chinese biotech company called SanReno Therapeutics which has early-stage products for kidney disease.

These transactions make sense for Western drug companies who want to tap into Chinese innovation. For example, Albert Bourla – Pfizer’s CEO – has recently pointed to China as a starting point for new drugs. On the other hand, as the Chinese economy has faltered recently, capital for China’s drug development has dried up. Chinese biotech and pharma companies welcome foreign investment to push their new drug development forward. Given this recent need for foreign capital, Western drug companies may be able to cut advantageous deals.