Big pharma in the United States seems to be pivoting to China for their biotechnology and manufacturing needs. According to the global market research firm DealForma on Feb. 17, over 30% of contracts worth more than $50 million in the pharmaceutical and biotechnology industries in 2024 involved Chinese companies. This is a 20% increase from 2023, showing that more investments in the pharmaceutical sector are going to China.
The increasing focus of U.S. pharmaceutical companies on the Chinese market is evident in recent strategic collaborations and investments, highlighting the sector’s growing interdependence.
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In December 2024, Merck & Co. signed an exclusive global license agreement with Chinese pharmaceutical company Hansoh Pharma for HS-10535, an oral glucagon-like peptide-1 (GLP-1) receptor agonist being developed as a treatment for obesity. This collaboration, valued at up to $2.8 billion, includes upfront payments, milestone fees, and royalties on future sales.
The drug is designed as an oral alternative to popular injectable weight-loss treatments like Novo Nordisk’s Wegovy. Merck aims to expand its presence in the growing obesity treatment market, which is expected to reach $150 billion by the early 2030s.
Meanwhile, Moderna is focusing on expanding its presence in China, particularly with its mRNA technologies. The company has entered into collaborations, including one with CARsgen, a Chinese biotech firm, to develop cancer treatments.
Moderna is also planning to build a manufacturing facility in China to produce mRNA-based therapies, including its COVID-19 vaccine. This strategic move aims to tap into China’s growing pharmaceutical market, despite the ongoing geopolitical tensions between the U.S. and China. The move reflects Moderna’s efforts to secure a foothold in one of the largest markets for biotechnology and vaccines.
Bain Capital, a U.S. private equity firm, has increasingly invested in the Chinese pharmaceutical sector. In 2023, Bain secured rights to an asthma drug from Jiangsu Hengrui Medicine and launched Aiolos Bio with a Chinese partner. This joint venture was later acquired by GSK for up to $1.4 billion, demonstrating Bain’s success in capitalizing on China’s pharmaceutical growth. These deals reflect the growing interest from U.S. firms in China’s expanding biotech industry.
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These collaborations reflect the desire to leverage China’s market potential, access cutting-edge research, and expand manufacturing capabilities. Despite challenges, including geopolitical tensions, U.S. companies are recognizing China as a crucial hub for innovation and growth in the pharmaceutical industry. As these partnerships continue to evolve, they are shaping the future of global drug development and distribution, demonstrating the interconnected nature of the global healthcare sector.
The pharmaceutical industries in China and the U.S. are shaping the future of global healthcare through an increasingly interconnected relationship. U.S. companies are tapping into China’s vast market and innovative biotech scene, while Chinese firms are quickly advancing in drug development and manufacturing, drawing significant attention from American investors.