Domestic Innovative Drug Licensing-Out Deals Hit Record Highs, Multi-Dimensional Policy Support Drives Valuation Recovery
Alina Collins
In H1 2026 Chinese biotechs signed 81 out-licensing deals worth ~US$110 billion, already 80% of last year's full total; a wave of regulatory and reimbursement reforms is clearing the path from approval to revenue, and brokerages see the sector's valuation recovery window opening.
What does the US$110 billion scorecard really tell us?
The 81 deals span oncology, metabolic, immunology, neurology and six other therapeutic areas; licensees come from 20 countries including the US, UK, France and Italy.
This means → Chinese innovative drugs are no longer sold into one or two markets — they are being "bulk-licensed" globally.
ICBC Credit Suisse Fund expects some firms to collect the bulk of milestone payments and sales royalties starting next year; large-scale US launches generating material royalty income are forecast for 2028–2030.
A cluster of "world firsts" — how advanced is the R&D?
38 innovative drugs were approved in H1, of which 31 — over 80% — were domestically developed.
Among them: the world's first anti-hepatitis-D antibody drug, the first solid-tumor CAR-T therapy — a treatment that re-engineers a patient's own immune cells to attack tumors — and the first rabies bispecific antibody — a single drug that binds two targets at once.
In plain terms = China used to follow; overseas labs invented, Chinese firms copied. In several fields, China is now first to file.
The drugs exist — how do they actually get sold?
Shanghai's July "15th Five-Year" health plan exempts innovative drugs from DRG/DIP payment caps — DRG/DIP is a diagnosis-based bundled-payment system that limits what hospitals can spend per case. This means → hospitals no longer face a financial penalty for prescribing costly new drugs, widening the in-hospital uptake channel.
The NMPA moved eligible cell-and-gene therapies into a 30-day fast-track review; the State Council in April backed launch pricing that matches R&D investment and clinical value.
In late 2025 the NHSA rolled out a "basic insurance + commercial insurance" dual-layer payment system, bringing high-value drugs such as CAR-T into recommended commercial coverage. In plain terms = faster approvals, freer pricing, broader reimbursement — three bottlenecks being fixed at once.
Valuations are still low — what do brokerages say?
Huafu Securities notes that A-share and Hong Kong innovative-drug valuations remain at historic lows; continued internationalization breakthroughs and improving industry conditions are jointly driving a re-rating.
Industrial Securities calls "innovation + internationalization" the core pharma theme for 2026; BD out-licensing remains the primary route to global markets at this stage, and the rise of co-development (Co-Co) deals signals growing bargaining power among Chinese drugmakers.
Which Hong Kong-listed names are in focus?
BeiGene (06160): China's most globally advanced oncology biotech; key products include zanubrutinib and tislelizumab.
Innovent Biologics (01801): product revenue has crossed RMB 10 billion with full-year profitability achieved.
Akeso (09926): a global leader in bispecific antibodies; its ivonescimab (PD-1/VEGF bispecific) out-licensing deal is valued at up to US$5 billion.
This means → whether overseas revenue materializes on the 2028–2030 timeline will be the key proof point for this valuation-recovery thesis.
Content is for reference only, not financial advice.