China Pharma Pulse: Innovation, Reform & Global Dealmaking Surge

Weekly Digest — August 5, 2025

A curated snapshot of the latest in China's biopharma ecosystem — from recent disclosures and policies to major licensing, IPOs, and pipeline trends. Covers developments through July and early August 2025.

🚀 1. Innovation & Licensing Boom Fueled by Policy Tailwinds

China is powering a global pharma deal surge in 2025:

• 456 global licensing transactions in H1 2025 (+32% YoY)
• $11.8B in upfront payments (+136% YoY)
• $130.4B in total deal value (+58% YoY)
• Chinese firms contributed ~50% of global deal value and 30%+ of total deal count

These numbers reflect China’s rising profile as a source of innovative pipelines and differentiated assets, as global pharma turns eastward for BD.

🔧 Domestic Policy Momentum

A wave of reforms is transforming China’s innovation landscape:

June 30, 2025:
NHSA & NHC released “Measures to Support High-Quality Development of Innovative Drugs” — a 16-initiative policy package targeting drug R&D, pricing, access, and reimbursement.

Key highlights:

• 30-day IND approval timelines
• Value-based pricing for first-launch innovative drugs
• Expanded basic reimbursement access
• New “Category C” commercial insurance coverage
• Permission to use insurance-hospital data for drug development
• Official rejection of “involution” (zero-sum me-too R&D), encouraging genuine innovation

July 16, 2025:
NHSA launched its 11th round of national drug procurement, alongside updates to medical service price controls. Themes include preventing bid-rigging and countering “involution.”

July 31, 2025:
NHSA published trial regulations for instant basic insurance settlement — enabling real-time claims processing, cross-provincial coverage, and smarter auditing.

💬 Critical View: These reforms send a strong signal that policy is aligned with long-term innovation, not just affordability. But execution — especially in reimbursement timelines and price negotiations — will define success.

💼 2. Big-Ticket Outbound Licensing Accelerates

Two standout deals highlight China’s rise as a pipeline exporter:

• 3SBio + Pfizer (May 20, 2025):
  Global rights (ex-China) to PD-1/VEGF bispecific SSGJ 707, Phase III
  → $1.25B upfront, up to $4.8B in milestones + $100M equity
• Hengrui + GSK (July 28, 2025):
  Global rights (ex-China) to pipeline incl. HRS 9821 (COPD)
  → $500M upfront, up to $12B total deal value incl. royalties

💬 Critical View: Deal volumes are surging, but repeat success depends on clinical data quality, IP clarity, and commercial differentiation beyond China.

⚖️ 3. Valuation Uplift: Investors Take Notice

As of August 1, China’s pharma and biotech sector trades at:

• P/E ratio: 39.1× (5-year average: ~32×)

Valuations reflect investor optimism — fueled by licensing momentum and pro-innovation policy.

🧬 4. Weight Loss: Licensing Frenzy Hits China

Global appetite for metabolic innovation is spilling into China.

Recent China deals:

• BrightGene + CR Sanjiu (Aug 1):
  China rights to BGM0504 (GLP-1/GIP dual agonist), Phase III
• CSPC + Madrigal (July 30):
  Out-license of SYH2086, oral GLP-1 in preclinical. Read More

Product pipeline updates:

• Innovent: Launched masitideptin
• Hengrui: HRS9531 posted strong Phase III topline
• Zonsen: RAY1225 completed full Phase III enrollment

💬 Critical View: Local players are moving fast, but global GLP-1 incumbents (e.g., tirzepatide) set a high bar. Formulation innovation and access strategies will be key to market share.

💹 5. Hong Kong Capital Markets: Biotech Listings Revive

IPO Highlights:

• Duality Biotherapeutics (April 15):
  Raised $211M; stock jumped ~130% on debut
• Leads Biolabs (July):
  Raised ~$189M; shares rose 50%+ on listing day

💬 Critical View: Strong performance underscores renewed capital interest in biotech — especially for licensing-driven, platform-rich firms.

🧪 6. CRO/CDMO (CXO) Demand Bounces Back

• 72 outbound licensing deals in H1 2025, already over 50% of 2024’s total
• 16 deals exceeded $1B in value

WuXi AppTec H1 Results:

• Revenue: +24.2% YoY
• Backlog orders: +37.2% YoY

Early R&D acceleration:

• 186 first-class INDs approved in Q1
• 30-day IND review timelines driving preclinical and CMC outsourcing

💬 Critical View: Policy clarity and IND acceleration fuel early-stage CXO demand — but U.S. geopolitical pressure on WuXi and others remains a lurking risk.

🔄 7. Trispecific T Cell Engagers (TCEs): New Frontier

• AbbVie + IGI (July 10):
  Trispecific (CD3/CD38/BCMA)
  → $700M upfront, $1.2B+ in milestones
• AbbVie + Simcere (Jan 13):
  Rights to SIM0500 (GPRC5D/BCMA/CD3)
• Zejing’s ZG006 (ASCO 2025):
  ORR: 58–62% in SCLC under breakthrough designation

💬 Critical View: The TCE race is global and capital-intensive — clinical differentiation and safety will determine winners, especially in solid tumors.

🌿 8. Autoimmune Pipeline Gains Momentum

Key Deals:

• Rongchang Bio + Vor Biopharma (June 25):
  Out-licensed taiposib (BLyS/APRIL fusion), fast track in SLE/MG

R&D Snapshot:

• Livzon’s LZM012 beat secukinumab in Week 12 PASI 100
• Dozens of oral TYK2, IL-17/IL-23 programs in mid-to-late stage

💬 Critical View: Chinese autoimmune biologics are maturing, with early signs of differentiation. Licensing interest is rising, but Phase III design and safety will shape global reception.

📚 References

• NHSA & NHC, Policy Measures for High-Quality Drug Innovation, June 30, 2025
• China Fortune Securities Strategy Weekly, August 4, 2025
• GSK–Hengrui Deal Report, The Times, July 28, 2025
• Duality Biotherapeutics IPO Coverage, Business Times, April 15, 2025
• 3SBio–Pfizer Deal, ET Pharma, May 20, 2025
• NHSA Procurement & Insurance Reforms, July 2025