Deal dynamics between Chinese biotechs and global pharma companies are changing fast, with the biotechs seeking higher upfront payments and the Big Pharmas seeking more expansive platform deals.
Biotech innovation from China is no longer cheap as both sides become savvier in the dealmaking process. China-based companies are pushing for higher upfront payments to boost their internal pipelines, whereas Big Pharmas—aware that the low hanging fruits have already been picked—are willing to wait out the clinical risk and pay more.
Indeed, the average deal size involving Chinese biotechs has risen dramatically—up 74% compared to 2025, according to mid-April data from pharmaceutical industry intelligence firm Evaluate.
“China is no longer what you would call the bargain basement anymore,” Li Watsek, a senior biotech analyst at Cantor Fitzgerald, told BioSpace. She observed that total deal value for China-developed assets has caught up to similar deals outside the country since the second half of 2025.
China is also striking some big-ticket deals, such as Pfizer’s oncology deal with Innovent, worth up to $10.5 billion.
“Even though there are a lot of assets in China, the reality is good quality assets still remain limited,” Watsek said. “So there’s a bidding war going on there.” Chinese biotech companies have realized that they can extract a much higher valuation if they have what Big Pharmas want.
Negotiating a higher upfront payment has become the dominant, if not only, goal of Chinese biotech companies, according to Cui Cui, head of Asia Healthcare Research at Jefferies. Cui’s observations are based on a recent conversation with a major biotech company, one of her clients in mainland China.
While Innovent’s deal with Pfizer was backloaded, the Chinese firm still nabbed $650 million upfront. And Hengrui Pharma certainly succeeded in front loading its deal with Bristol Myers Squibb, which offered $600 million of the $950 million total in an upfront payment.
Big Pharmas are also starting to throw in their own assets to sweeten the deal—as Pfizer did with Innovent and BMS did with Hengrui. By offering their assets to be marketed by China-based companies in their country, pharmas can boost credibility for the smaller biotechs.
China’s steady climb
China has become a remedy for Big Pharmas facing increasing pressure to cut prices, along with blockbuster patent expirations that began in 2025. Analysts believe that Chinese biotechs are reshaping the global biopharma landscape, as assets from China could alleviate that pressure affordably and quickly. For Chinese biotechs, partnering with a Big Pharma is the most direct route to globalization while gaining industry validation of their science and platform.
Total deal value for China-based companies this year as of March 29 is $60 billion, and the final total will likely top the 2025 record of $130 billion, according to a state media quote from China’s NMPA. The 2025 value was double what was achieved in 2024.
The U.S. remains the largest buyer of Chinese biotech assets. In 2025, Big Pharmas and biotechs from the U.S. completed 47 deals in China, totaling $45.1 billion. Twenty of these were mega-deals exceeding $1 billion in value. The pace has accelerated sharply in 2026, with 19 announced deals in the first four months representing $28.4 billion, with six mega-deals as of mid-April. The spree hasn’t slowed down, with Lilly offering nearly $3 billion to Haisco for five programs on Monday.
2026 is on track for roughly a 20% increase in annualized deal count, Puru Gaur, a senior analyst at Evaluate, told BioSpace.
Total deal value for the full year between China and the U.S. is projected to reach as high as $85 billion, with a base case around $70 billion, depending on whether early-year mega-deal momentum continues, Gaur said.
Structural changes
In contrast to their U.S. counterparts that prioritize an exit via M&A, many Chinese biotechs aim to become full-scale companies, pushing drug candidates through all clinical phases on their own.
“This is a fundamental difference,” Cui said. “And this is why biotechs from China and the U.S. are choosing completely different exits.”
From the Chinese biotech’s side, it could take decades for all the milestones to pay out. For now, cash from upfront payments is what they need to push forward their ongoing pipelines to satisfy investors.
Average upfront payments for China-based deals have increased 36% from $123 million to $167 million this year, according to Evaluate. In addition to Pfizer and BMS, the largest 2026 upfronts include AbbVie’s $650 million to RemeGen, Eli Lilly’s $350 million to Innovent and $115 million to Insilico, and AirNexis’ $108 million to Haisco.
Eli Lilly has become the most aggressive U.S. buyer in the 2025–2026 window, closing five major deals in the last five months—including Haisco—for a total commitment of potentially more than $13 billion.
While upfront payments continue to swell, there is one key indicator quietly dropping down—the initial royalty payment, a key sharing design of post-approval sales. Data from Evaluate shows that the average royalty floor has decreased from 7.1% to 5.5% in the first four months of 2026.
Chinese biotechs are willing to agree on a lower royalty floor in exchange for a higher upfront payment, according to Cui. Royalties in such licensing deals have typically been double digit, from 10% to 13%, based on data from three years ago. But now, many Chinese biotechs are telling Cui that to bump up the upfront payment, they would accept a diminshed single-digit royalty—as low as just 2% to 3%.
What pharmas want
Big Pharmas are no longer as eager as before to cut deals on early clinical candidates with Chinese biotechs. In Cui’s view, that’s because the low-hanging fruits there are pretty much all picked.
Cui found that deals involving early-stage candidates have decreased since the second half of 2025. As China continues growing its pipeline of diverse modalities, Big Pharmas can simply wait and choose after more certainty is achieved in the clinic, particularly as recent M&A deals elsewhere have eased pressure for many facing looming patent cliffs, Cui said.
Another shift in the U.S.-China licensing deals is the transaction model. Platform deals now have replaced single-asset licensing from earlier waves and become the dominant transaction model, as noted by analysts.
Rather than acquiring rights to one drug candidate, U.S. companies are increasingly licensing entire technology platforms covering multiple preclinical candidates simultaneously, Gaur told BioSpace. These include AI drug discovery engines, proprietary antibody discovery systems and siRNA program suites. Such deals include the Madrigal—Ribo deal for six siRNA programs, the Eli Lilly—Insilico AI deal that covers multiple therapeutic areas and the GSK—Hengrui deal for 12 drug candidates.
Platform deals give U.S. buyers multiple shots on goal under a single agreement, distributing risk across a portfolio of candidates while securing exclusive access to the underlying discovery infrastructure. This commands significantly higher aggregate valuations, providing fuel to develop and commercialize the rest of a Chinese biotech’s pipeline, Gaur said.
