J.P. Morgan: Thoughts on Large Cap Pharma and China Biotech Partnerships and Implications for Drug Development

Key Takeaways

• 1.China-sourced out-licensing deals have surged, surpassing $100bn in 1H26 (+46% YoY) and representing ~60% of global cross-border transaction value, driven by rapid Chinese trial execution and cost-effective pipeline replenishment for Western pharmas facing patent cliffs.
• 2.Partnerships remain concentrated in three high-impact therapeutic modalities: PD-1/VEGF bispecifics (e.g., ivonescimab, pumitamig), antibody-drug conjugates (ADCs like sac-TMT, HS-20089, HS-20093), and incretins for obesity and diabetes.
• 3.Translatability of China-only data to global clinical trials is the primary debate; translatability risk is considered low in metabolic/obesity indications but higher in oncology due to differences in standard of care and patient demographics.

Table of Contents

• Global Pharma Is Increasingly Leveraging Chinese Biopharma To Build Pipelines
• Key Questions Remain on The Oppty for China Biotech Deals
• China's Biopharma Industry Has Seen Meaningful Growth
• China Out-licensing Deal Volume/Value Continues to Climb
• Deals Originating in China Account for ~Half of Global Cross-Border Licensing Deals
• Translatability of China Data to Global Studies Remains a Key Debate
• Limited Risk With US Proposed Regulatory Changes
• Transactions Thus Far Have Centered On Select Therapeutic Areas
• Where Partnerships with Chinese Biopharmas Could Go From Here
• PD-1/VEGF
• PD-1/VEGF Bispecs Emerging As Next-Gen Immunotherapies
• What We're Watching Next – HARMONi-3
• Key Remaining Questions For PD-1/VEGF Bispecs
• Data Thus Far Points to Benefit vs PD-1 in 1L Squamous NSCLC
• Beyond NSCLC There Are A Number of Other Potential Settings for PD-1/VEGFs
• Incretins
• Incretin Market Expected to Exceed $200bn
• Elecoglipron Brings AstraZeneca Into the Obesity Space
• While Early, UBT251 Adds GGG to Novo's Pipeline
• Kailera's Ribupatide is an Attractive Partnership Candidate for Large Pharma
• Other GLP-1 Assets We Are Watching In China
• Other GLP-1 Assets We Are Watching In China (cont.)
• ADCs
• ADCs Have a Sizeable Oppty Across a Range of Indications
• Kelun Biotech's sac-TMT Represents One of MRK's Core Oncology Pipeline Assets
• sac-TMT's Profile Shows Potential For Differentiation in NSCLC
• 2026/27: Number of Updates to Watch for sac-TMT
• Hansoh's ADCs Helping with GSK's Broader Oncology Platform
• Number of Other ADC Partnerships to Watch
• Covered/Mentioned Companies

Report data

Share of Global Cross-Border Licensing Deals