The "going global" strategy has emerged as a pivotal developmental approach for Chinese biopharmaceutical companies, aimed at increasing revenues, enhancing competitiveness, and bolstering brand valueIn recent times, enterprises in the sector are setting sail towards international waters, leveraging multiple avenues such as overseas investments, establishment of research and development centers, technology transfer, and international certificationsThis multifaceted approach allows these companies to integrate into the global market landscape, effectively assimilating quality resources while optimizing diverse configurationsThe end goal is to continuously enhance their innovative capabilities on the global stage.

As we approach 2024, a myriad of biopharmaceutical companies in China is poised to seize opportunities amid the global wave of internationalizationThis strategic ambition is widely considered a significant undertaking for the industry as it searches for new avenues for growth

Analysts have pointed out that the path to global expansion for Chinese pharmaceutical enterprises hinges upon the cultivation of innovation capabilities, robust commercial pathways, and the ability to maneuver through the multifaceted cultural and corporate terrains of different countries.

Over the years, thanks to policy support and advancements in technology, many of these companies have begun to cultivate their own foundation for innovationThis development marks a shift, allowing for significant investments in R&D and enhancing their manufacturing capabilities, all while ensuring an efficient supply chain to assist in their overseas endeavors.

A prominent trend for 2024 is the focus on innovative medications making their way into foreign markets, particularly in therapeutic areas that are widening and diversifying at an unprecedented rateRecent data from Huatai Securities indicates that several key accomplishments involve transactions exceeding 1 billion USD

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This includes advancements in Antibody-Drug Conjugates (ADCs), oligonucleotide therapies, and bispecific antibodiesOf particular interest are the ADCs that have become significantly prevalent in this sphere.

Among the high-profile ADC-related developments, notable news broke in early January when Johnson & Johnson announced the acquisition of Ambrx Biopharma, which has rights to several ADC drugs in mainland ChinaAdditionally, other partnerships were inked, such as Baiyu Biopharma's collaboration with Radiance Biopharma for bispecific ADC licensingAnother significant milestone was achieved as Rongchang Biopharma's ADC RC88 received fast-track designation from the U.SFDA.

As the year draws to a close, interest in ADCs remains unabatedFor instance, on December 21, WuXi Biologics and Hangzhou DaXing Bio announced a collaboration with Aadi Bioscience, enabling the latter to gain exclusive global rights for developing three preclinical-stage ADCs

The financial details of this agreement are striking, involving an upfront payment of $44 million, with potential milestone payments climbing to a total of approximately $849 million.

According to Professor Li Jin from Shanghai Gaobo Hospital of Chinese Medicine, China’s biopharmaceutical industry has reached near global standards in three areas: small molecule targeted drugs, monoclonal antibodies, and ADCsThe country has made considerable strides, particularly in aligning with leading Western firms through the licensing of various projects this year.

Nevertheless, Li insists that relentless effort is required for Chinese firms to maintain progressHe remains optimistic that significant breakthroughs in bispecific antibodies and ADC technology will be realized in the decade to come, presenting novel treatment options for cancer patients.

The emergence of bispecific antibodies as a focal point for 2024 is also noteworthy

Preliminary statistics reveal that over a dozen projects involving these innovative drugs are ready to explore international markets, with targets spanning HER2, TROP2, B7H3, and CD3. The total transaction volume for these agreements is estimated around 80 billion RMB, predominantly focusing on oncology applications, followed by autoimmune indications.

Analyzing the individual project valuations, two standout transactions have already crossed the 100 million RMB threshold—the licensing of PD-1/VEGF bispecific antibody LM-299 to Merck by Lixian Pharmaceuticals, and the licensing of PD-L1xVEGF bispecific antibody IMM2510 from Iiming Biopharma to Instil, which includes a CTLA-4 antibody component.

However, the journey toward international markets is fraught with challengesNumerous companies have faced significant setbacks, including instances where projects have been termed "returned," reflecting the complexities of overseas expansion

At the start of 2024, Junshi Biosciences faced termination on its collaboration with Coherus over the development of the promising TIGIT monoclonal antibody—a drug anticipated to have substantial cancer treatment potential.

Adding insult to injury, in August, HBM Pharmaceuticals received a notice from partner Cullinan stating the termination of their agreement regarding HBM7008. Being at the early phases of clinical development, HBM has regained global rights to HBM7008 and is now actively seeking alternative commercialization and development avenuesThe reasons behind this decision were attributed more to a strategic pivot by Cullinan rather than product performance.

There's also the case of Henlius Pharmaceutical, which, in May, revealed it received a Complete Response Letter from the U.SFDA regarding its application for the combination of carrelizumab and apatinib for treating hepatocellular carcinoma

The FDA's letter highlighted deficiencies surfaced during inspections, indicating challenges in fulfilling the needed biological studies.

In light of these challenges, management consultant Mao Hua emphasizes the need for companies to adapt strategically, taking into consideration the complexities of various international regulatory environmentsHe recommends thorough preparative research on local legal frameworks and approval processes before embarking on overseas projects.

Despite these pitfalls, Chinese biopharmaceutical companies remain resolute in their commitment to international expansion by 2025. Analysis from Huatai Securities highlights a growing trend, with the average total value of outbound projects for 2024 reaching approximately 570 million USDThe average upfront payments made in these deals significantly increased, indicating escalating confidence from both parties involved.

Several high-stakes projects have also emerged, with notable deals surpassing the billion-dollar threshold

Among these, BeiGene stands out for its competitively priced product, Tazemetostat, which manifests a striking disparity in pricing structures between marketsWhereas the drug originated at around 10,688 RMB per 100mg in China, it currently retails for approximately 4,320 USD in the U.Smarket, reflecting adaptive pricing strategies based on regional market dynamics.

As the industry continues to evolve, the share of domestic innovation drugs within global commercial operations is expected to rise consistently, eventually positioning China as an important participant on the world drug innovation stageThe emerging NewCo model represents a significant shift from traditional licensing routes, opening up new pathways for global endeavorsNotably, companies such as Juno Therapeutics and Innovent Biologics are among those venturing this path.

As investment in NewCo models grows, more companies could find themselves poised for successful listings within international capital markets, leading the way for further engagement in the global pharmaceutical arena