If you are a U.S. company that does not yet have a China strategy…you need to get moving or risk missing out on a potentially big market,” Brad Loncar, CEO of Loncar Investments, wrote after attending this year’s China Healthcare Investment Conference.

Trip reports like these are rolling in, reaffirming what is becoming more and more apparent: Chinese biotech companies are actively looking for cross border licensing deals—especially early-stage assets. Despite the current trade dispute, that market dynamic is not likely to change any time soon.

China’s government remains committed to radical healthcare reform. In turn, Chinese companies are aggressively looking to acquire key U.S. assets to fuel their biotech industry growth, which analytics firm IQVIA projects to reach upwards of $175 billion by 2022. These days it’s not uncommon to see 20 Chinese companies wrestling over the same asset, according to CStone CEO Frank Jiang.

Given that China has the world’s largest population, a considerable and rapidly-growing elderly population as well as 4 million new cancer patients each year, it’s not surprising that China has set such a high priority on healthcare. For example, the government has instituted acute regulatory reforms to facilitate rapid change.  Consequently, the time it takes to get a drug approved in China has significantly decreased.

“Three or four years ago if we were trying to bring a new product into China, we would be required to spend 3 to 5 years for local clinical trials. Now, new policies are in place that quicken the process,” Dr. Shao “Rocky” Yan, CEO of China Grand Pharmaceutical, said in an interview.

Drug approvals can be obtained even faster via a Priority Review pathway if central authorities deem the drug essential to the public. This is a game changer. These market and regulatory conditions make it a very good time for U.S. firms to pursue asset licensing in China. The benefits of these licensing agreements include:

  • U.S. companies can get an attractive non-diluting upfront infusion of capital from a Chinese partner to help fund their operations and R&D pipeline.
  • Although prices tend to be lower in China, U.S. companies are likely to find the sheer volume of demand in China offsets the lower price/patient ratio.
  • Aligning with a Chinese drug developer helps level the playing field, mitigating government favoritism of domestic firms over foreign competition from the U.S.
  • Local partners are more adept at navigating the Chinese culture and the business model, which differs greatly from the West’s.

While Europe remains an attractive market, price pressures have reduced profit margins there. As such it is time to reprioritize China, the second largest pharmaceutical market in the world.

Not sure how to approach this market? Have a small, overburdened business development team? Interested in a different market entirely?  No problem. This is why KYBORA is here: to introduce clients to new partners, to guide them in unfamiliar markets, and to provide extra business development bandwidth when needed.

Contact KYBORA today to learn how your company can benefit from KYBORA’s extensive life sciences experience and global network.

Note: Information for this article was aggregated from a variety of sources, including: bloomberg.com; CNBC; the Rhodium Group 2019 report prepared for the U.S.-China Economic and Security Review Commission; Pharmaceutical Technology; the Pharma Letter; LoncarFunds.com; among other online sources.


About the author.


20 years of experience in international business development in the pharmaceutical industry. Head of commercial operations and business development for Bristol-Myers Squibb in 16 Latin American countries. Global management consultant. Speaks French and Spanish fluently. Completed nine transactions in global markets in the past three years.

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