China is emerging as a major supplier of innovative drug technology, rapidly reshaping the global pharmaceutical and biotech landscape.
Licensing deals signed by Chinese pharmaceutical and biotech companies this year have already surpassed last year's total, and the annual figure is within reach of 200 trillion won. China is also closing the gap with the U.S. in the global clinical trial market, shifting the center of gravity in drug development.
With China's licensing revenue approaching 10 times that of Korea and global drugmakers lining up to license Chinese assets, Korean pharmaceutical and biotech companies face urgent pressure to strengthen their drug development capabilities and licensing competitiveness.
Licensing deals by Chinese pharmaceutical companies totaled $139 billion, or about 184 trillion won, this year, already exceeding last year's full-year figure of $135.7 billion, or about 179 trillion won, according to Reuters and other outlets on the 25th. By comparison, licensing deals by Korean companies this year totaled $14.7 billion, or about 19.5 trillion won, according to the Korea Pharmaceutical and Bio-Pharma Manufacturers Association. Two additional Korean licensing deals did not disclose their value, but the overall total remains far below China's.
Companies that have licensed Chinese drug candidates include global majors such as AstraZeneca, Pfizer, Eli Lilly, AbbVie and Novartis.
Individual deal sizes are also growing. The average value of a Chinese licensing deal this year was about $700 million, or roughly 926 billion won, more than 10 times the 2018 level.
Chinese companies accounted for eight of the 10 largest pharmaceutical deals worldwide in the first half, according to an analysis by the Korea Biotechnology Industry Organization citing a Deloitte China report. The largest was an agreement between CSPC and AstraZeneca in January. AstraZeneca signed the $18.5 billion deal, or about 25.5 trillion won, to license platform rights covering extended-release drug delivery, in which a drug's active ingredient is released gradually, and artificial intelligence-based peptide discovery.
"The global market is reassessing China's innovation capabilities, driven by higher-value assets, proven exit routes for investors and growing support from academia," the association said.