Did Chinese Cross-Border Biotech Licensing Deals Slow in the First Half of This Year?
China's drug industry is seeing R&D transition to a best-in-class strategy by leveraging its engineering capabilities. The number of out-licensing deals from Chinese companies could continue at pace and grow the number of out-licensed assets to more than 30 per year, with in-licensed investments at ~50 per year.
We found that 533 assets were in-licensed and 122 assets out-licensed. Out-licensing activities garnered attention in 2020. We counted 25 out-licensed assets in 1H22, suggesting 2022 could become a noteworthy year for the number of out-licensed assets.
Out-licensing provides key validation to a Chinese company's R&D capabilities. About 60% of assets are out-licensed to US companies. A new drug modality―bispecific antibody―is the third popular modality to be out-licensed. We've identified four leaders in terms of out-licensing deal value.
In 1H22, based on our search, Chinese companies in-licensed ~27 assets, at a similar level to 2020/2021. We see an increasing proportion of clinical-stage assets being in-licensed in 2020-1H22 vs. prior periods (Ph3 assets increased the most, followed by Ph1 and Ph2 assets). In contrast, the proportion of approved & NDA/BLA filed products lowered significantly. In contrast, the balance of pre-clinical assets has stayed relatively stable.
We believe differentiated assets can continue to be out-licensed to ex-China partners, namely:
- Potential first-in-class drugs in the top 3 globally in terms of development stage.
- China-approved but not yet globally approved drugs.
- Differentiated molecules or modalities or drugs with good commercial prospects.
Given the FDA's increasing requirement for multi-regional clinical trials (MRCT), we believe drug candidates with overseas clinical data could be out-licensed more easily.