CHINA Trends and Developments Contributed by: Min Zhu, Ya-ling (Michelle) Gon, Yang (Aaron) Gu, Chai Lu, Ying Li and Shiye Yuan, Han Kun Law Offices
Introduction In 2025, China’s pharmaceutical industry achieved a steady recovery, driven by an improving capital envi- ronment and an accelerated pace of internationalisa- tion. Investor confidence in high-quality biopharma- ceutical assets continued to rebound, leading to a visible revival in financing and IPO activities. At the same time, cross-border collaborations increased in both frequency and depth, leading to highly active licence-out transactions. Novel deal structures have emerged – notably, option packages as well as co- development and co-commercialisation (Co-Co) mod- els. Pharmaceutical Industry Transactions in 2025 Licence-in/out 2025 witnessed a significant increase in both the num- ber and size of licence-out transactions. According to industry statistics, the aggregate disclosed deal value of licence-out transactions by Chinese innovative drug companies in 2025 reached approximately USD135.7 billion, with upfront payments totalling approximately USD7 billion and a total of 157 transactions being recorded during the year, compared with USD51.9 billion across 94 transactions in 2024. This significant expansion reflects multinational pharmaceutical com- panies’ growing appreciation of the value in Chinese innovative drug assets. In terms of transaction focus, the bispecific antibody segment continued to command strong interest, par- ticularly assets such as PD-1/VEGF bispecific anti- bodies that demonstrate clear clinical value and broad potential for indication expansion. In May 2025, 3SBio entered into a global licensing collaboration with Pfiz- er, with an upfront payment of USD1.25 billion, setting a record for upfront consideration in a Chinese innova- tive drug licence-out transaction. In addition, block- buster transactions valued in the multi-billion-dollar range were observed across small-molecule drugs, antibody therapeutics and nucleic acid therapeutics. Structurally, beyond the traditional single-asset licence model, multi-pipeline portfolio licensing and platform-level collaborations became key drivers of large-scale transactions. Novel transaction structures such as option package arrangements and Co-Co models have gained significant traction. For example,
the multi-pipeline transactions between Hengrui Phar- maceuticals and GSK, as well as between Innovent Biologics and Takeda Pharmaceutical Company, each reached total deal values exceeding USD10 billion. These developments indicate that Chinese pharma- ceutical companies are transitioning from one-off asset sales to deeper participation in global develop- ment and commercialisation. Chinese innovators are accelerating the development of their own global R&D and commercialisation capabilities by leveraging the mature infrastructure and operational experience of established multinational pharmaceutical companies, and are increasingly positioned to capture a greater share of the global pharmaceutical value chain. IPOs The Hong Kong pharmaceutical and biotechnology IPO market experienced a pronounced rebound in 2025, characterised by both increased volume and improved quality. A total of 26 healthcare/biotechnol- ogy companies (including eight medical device and healthcare service companies) were listed in Hong Kong during the year, representing an increase of 17 compared with 2024. Total funds raised reached approximately HKD29.265 billion, representing a year- on-year increase of 751.7%. Pre-revenue biotechnology companies were the pri- mary drivers of fundraising activity. 16 pre-revenue biotech companies were listed under Chapter 18A of the Hong Kong Exchanges and Clearing Limited Listing Rules, raising a combined HKD13.771 billion, accounting for 47.06% of total IPO proceeds. This marks a dramatic resurgence from 2024, when only four Chapter 18A listings were completed. Meanwhile, the A-share market also showed marginal recovery, with three pharmaceutical companies completing IPOs on the STAR Market and the Main Board, rais- ing a total of CNY5.466 billion. From a market structure perspective, Hong Kong remains one of the most active global IPO markets for biotechnology companies. For Chinese innovative drug enterprises in particular, Hong Kong’s role as an international financing platform and branding gateway has become increasingly strategic. As of the end of
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