2026 Sees China's Biotech Scene Continuing Its Ascent – But Could US Developments Mean Clouds On The Horizon?

In recent years, China's biotech scene has risen in prominence with its innovative R&D and promising pipelines commanding big pharma's attention. In this blog, we take a look at this trend, which sees China-related deals and investment continuing to flow, as well as the recent developments in the US, with draft legislation being proposed that seeks to impose restrictions which would impact transactions between US pharma companies and Chinese biotechs. 

Licensing deals flow and evolve

2026 has seen licensing deals involving Chinese biotechs continuing at pace and, what has been notable, is the significant sums involved. 

Leading the pack, AstraZeneca and CSPC struck a collaboration deal worth up to $18.5 billion ($1.2 billion upfront) to advance the development of multiple next gen therapies for obesity and type 2 diabetes across 8 programmes (including a once-monthly injectable obesity portfolio). Not far behind, Bristol Myers Squibb (BMS) and Hengrui Pharma (Hengrui) entered into a collaboration deal worth up to $15.2 billion ($600 million upfront) relating to 13 early-stage programmes in oncology, haematology and immunology. Meanwhile, Innovent has been busy, inking a $10.5 billion ($650 million upfront) oncology-focused collaboration with Pfizer and an oncology and immunology collaboration with Eli Lilly worth up to $8.8 billion ($350 million upfront).

These deals demonstrate an evolution within the broader China trend which see a movement towards more collaborative, larger scale, multi-programme / platform deals (versus a simpler out-licensing model of one or more assets for development and commercialisation outside of China). For example, the BMS / Hengrui agreement involves assets from both parties (4 oncology / haematology from Hengrui, 4 immunology assets from BMS and 5 innovative assets to be jointly discovered) with Hengrui fully responsible for early clinical development which, as per the press release, will "accelerate clinical proof of concept for these programs". The deal also provides for the potential for Hengrui to conduct certain commercialisation activities globally with BMS (which would seem, in part, driven by Hengrui's publicly stated ambitions to become a global pharma player). The Pfizer / Innovent collaboration also includes contributions from both parties - eight Innovent-originated early-stage programmes as well as four Pfizer discovery programmes.

Chinese innovation continues to draw investment interest

As predicted in our M&A Outlook Report, 2026 has also seen the on-going flow of investment into Western companies formed with pipelines that include - or are often solely - assets licensed from Chinese biotechs (the "NewCo" model, which has been increasing in popularity in recent years).

Examples include:

• Kailera Therapeutics which, following huge investment rounds ($400m Series A in 2024 and $600m Series B in 2025), completed its $625m IPO in April and is developing an obesity and related conditions pipeline licensed from Hengrui;
• AirNexis which launched with a $200m Series A and a Phase 2 therapy for COPD licensed from Haisco Pharmaceutical Group; 
• Slate Medicines, with its lead monoclonal antibody (a potential next gen migraine and other headache disorders therapy) licensed from DartsBio Pharmaceuticals, which raised a $130m Series A; and 
• Tortugas Neuroscience - with its neurology and neuropsychiatric pipeline licenced from Jiangsu Hansoh Pharma and Japan's Eisai - which launched with $106m to fund on-going R&D, including Phase 2 for its two lead candidates.

Will Washington intervene?

The ascension of China's biotech scene on the global stage has not gone unnoticed in the US and geopolitics may yet have its part to play.

Following the Biosecure Act which was brought into US law in December 2025 and the launch of the US International Trade Commission's investigation into Chinese state support, subsidies, and pricing practices in biotech in February, the more recent developments are taking direct aim at the surge in licensing deals with Chinese biotechs. 

On the 2^nd of June, the Biotech Investment National Security Act (BINSA) was proposed by John Moolenaar (Chairman of the Select Committee on China) and Congresswomen Debbie Dingell. Stating concerns relating to national / supply chain security, as well as the potential impact that China's rise could have on the US biotech sector, in its current draft from, BINSA proposes (amongst others):

• amending the COINS Act of 2025¹ to add biotechnology² to the list of sectors subject to outbound investment screening (biotechnology would include the research, development, manufacturing and commercialisation of pharmaceutical products, biological products and therapeutic compounds); and 
• making relevant licensing deals, joint ventures and equity investments subject to Treasury Department review.

The draft also directs the Treasury to issue implementing regulations within one year of BINSA passing. 

Of course, the introduction of BINSA is just the initial step in a complex and typically lengthy legislative process and whether it passes in its current form – or if at all – remains to be seen. However, pharmaceutical companies should continue to monitor these developments and be aware that regulatory changes in the US could be on the horizon. 

Footnote

1. Signed into US law on 18 December 2025, at a high level, the COINS Act allows for the prohibition or notification of certain US investments in companies engaged in specified sensitive technology activities (where affiliated with countries of concern, which includes China)