Global Firms Pursue China Deals Amid Economic Uncertainty
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As global firms navigate economic uncertainty, many are seeking strategic deals in China. This article analyzes the implications for the pharmaceutical industry.
Global Firms Pursue China Deals Amid Economic Uncertainty because pipeline gaps outweigh macro caution. Reuters-reported out-licensing from greater China hit $137.7 billion in 2025 deal value, while 2026 average deal sizes and upfront fees rose further. Concrete examples include Merck–Hengrui and other multibillion option structures.
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Key Takeaways
- Pharmcube data cited by Reuters put greater China out-licensing at $137.7 billion in 2025 deal value across 186 deals.
- As of mid-February 2026 reporting, 38 out-licensing deals were already announced, with average 2026 deal size about $1.3 billion and average upfront about $77.7 million.
- Merck’s March 2025 Hengrui license for HRS-5346 included $200 million upfront and up to $1.77 billion in milestones for rights outside Greater China.
- Drivers named in reporting include patent cliffs, R&D cost pressure, and faster China clinical innovation in obesity, oncology, and cardiometabolic disease.
What do the 2025–2026 licensing tallies show?
A February 13, 2026 Reuters report said the value of licensing-out deals signed by companies in greater China (mainland, Hong Kong, Macau, Taiwan) rose nearly tenfold from 2021 to $137.7 billion in 2025. Analysts quoted in the piece expected another surge as global drugmakers scout China-origin assets while cutting costs ahead of patent expirations.
Early-2026 figures in the same report: average deal size about $1.3 billion (up 76% versus 2025), average upfront about $77.7 million (double 2025’s $38.8 million), and 38 deals announced year-to-date at the time of publication versus 186 deals in all of 2025.
Primary: Reuters: China biotech licensing boom (Feb 13, 2026).
Which landmark deals illustrate buyer behavior?
In March 2025, Reuters reported Merck licensed exclusive rights outside Greater China to Jiangsu Hengrui Pharmaceuticals’ experimental oral heart-disease drug HRS-5346 for $200 million upfront and up to $1.77 billion in development, regulatory, and commercial milestones, plus royalties if approved. The same reporting wave cited other China-source deals, including prior Merck transactions with Hansoh and LaNova and Novo Nordisk’s weight-loss candidate license from United Laboratories International.
A June 16, 2025 Reuters analysis said U.S. drugmakers had signed 14 China in-licensing deals potentially worth $18.3 billion through June, versus two in the year-earlier period (GlobalData figures provided to Reuters), while traditional M&A volume was down.
Deal example: Reuters: Merck–Hengrui heart drug license (March 25, 2025). Broader U.S. buyer trend: Reuters: U.S. pharma China licensing surge (June 16, 2025).
Why pursue China assets amid uncertainty?
Reporting consistently links the boom to Western patent cliffs — including references to roughly $200 billion in medicines losing protection by decade’s end — and to lower early-stage acquisition costs versus domestic bidding wars. Economic uncertainty and geopolitical friction raise CFIUS, tech-transfer, and supply-chain diligence burdens, but have not stopped announced biopharma licensing volumes in the datasets cited.
For BD teams, the practical checklist is modality quality, CMC comparability for multinational Phase 3, China-only versus ex-China rights splits, and whether upfront inflation ($77.7 million average in early 2026 per Reuters/Pharmcube) still beats internal discovery NPV.
Data points for screening
- $137.7 billion greater China out-licensing value in 2025
- 186 deals in 2025; 38 deals YTD in mid-February 2026 reporting
- $1.3 billion average 2026 deal size; $77.7 million average upfront
- Merck–Hengrui: $200 million upfront; up to $1.77 billion milestones
- 14 U.S. China in-licenses worth potential $18.3 billion through June 2025 (GlobalData/Reuters)
What remains unproven
Deal-value databases include biobucks that may never pay. Geopolitical restrictions could still block some closings. Do not treat announced option value as cash proceeds or as clinical success probability.
Related NovaPharma coverage
- Biotech AI, capital efficiency, and China
- China innovation factor for pharma BD
- Friday Five including China deals
Frequently Asked Questions
How large was China-region out-licensing in 2025?
Reuters, citing Pharmcube, reported greater China-region out-licensing deal value of $137.7 billion in 2025, nearly tenfold versus 2021.
What Merck–Hengrui deal illustrates the trend?
In March 2025, Reuters reported Merck licensed Jiangsu Hengrui’s oral heart-disease candidate HRS-5346 for $200 million upfront and up to about $1.77 billion in milestones outside Greater China.
Are these deals happening despite economic uncertainty?
Yes. Reuters reporting in 2025–2026 describes U.S. and global firms accelerating China in-licensing to refill pipelines ahead of patent cliffs even while cutting broader R&D costs.
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