Amid the wave of changes in the global pharmaceutical industry, BD transactions are becoming a key engine for Chinese innovative pharmaceutical companies to break through.

In 2025, BD transactions in the field of innovative drugs will show explosive growth. A deep game about technology, capital and market is unfolding, and Chinese innovative pharmaceutical companies are standing at the forefront of this change with their outstanding performance.

The heat storm behind the data

According to incomplete statistics, in May 2025 alone, at least six domestic innovative pharmaceutical companies officially announced BD transaction orders, and most of them were cross-border cooperation between Chinese and foreign pharmaceutical companies. This high frequency of transactions is not accidental, but a microcosm of the hot trend of innovative drug BD transactions in 2025.

Data shows that from the beginning of 2025 to date, the total transaction amount of innovative drugs going overseas has reached US$45.5 billion, and the down payment has reached US$2.2 billion. The annual transaction volume is expected to break the historical record. Looking back at 2020-2024, the total transaction amount of innovative drug BD soared from US$9.2 billion to US$52.3 billion, and the down payment amount also increased from US$600 million to US$4.1 billion, showing a strong growth momentum.

Behind these figures are blockbuster deals that have shaken the market. On May 20, 3SBio announced a collaboration with Pfizer on the global (excluding mainland China) development, production, and commercialization rights of the PD-1/VEGF dual antibody SSGJ-707, with a potential total amount exceeding US$6 billion.

On the day the news was announced, 3SBio's stock price surged 32%, and 3SBio's stock price rose by two consecutive daily limits on May 20 and 21. Although the transaction is still in the negotiation stage, CSPC Pharmaceutical Group revealed that the total amount of each of the three potential transactions is about US$5 billion. This news also stimulated the stock price to rise by more than 12% during the intraday trading on May 30, and finally closed up 6.3%.

According to Oriental Wealth Choice data, innovative drug-related sectors were also driven by these blockbuster transactions. The Shanghai-Hong Kong-Shenzhen innovative drug ETF in the A-share market rose 2.74% on the day, fully demonstrating the strong catalytic effect of BD transactions on the secondary market.

Logical decoding for each user

In the global BD transaction market, the two parties to the transaction have formed distinct and complementary role positioning.

Buyers are usually internationally renowned pharmaceutical companies with abundant cash flow, such as Johnson & Johnson, Roche, and Merck. Although these giants have extensive sales networks, strong financial strength, and mature R&D systems, they also face severe market challenges. Take Merck's star product K drug as an example. Its core patent will expire in 2028, and it will inevitably face fierce competition from biosimilars. In order to maintain market competitiveness and find new growth points, supplementing new product pipelines has become their top priority.

Most of the sellers are innovative pharmaceutical companies that are still in the clinical research stage. In recent years, the financing environment of the primary market for innovative drugs has cooled. Data shows that the reported financing amount in the primary market for innovative drugs increased from 3.6 billion yuan in 2013 to 62 billion yuan in 2021, and then dropped sharply to 39.3 billion yuan in 2022, a year-on-year decrease of 36%.

For these innovative pharmaceutical companies, continuous R&D investment requires a lot of financial support. BD transactions are not only a key means to obtain cash flow to maintain the R&D process, but also an important way to gain global recognition for innovative results. As overseas pharmaceutical executives said, BD is a market behavior. For small biotechs, it is a matter of survival. Only by surviving through BD transactions can they continue to stay in the innovative drug track.

Data shared by a pharmaceutical professional at a public meeting also confirmed the inevitability of such cooperation: the proportion of multinational pharmaceutical companies' external procurement pipelines from Chinese companies has increased year by year, from 10% in 2020 to 29% in 2023, and further increased to 31% in 2024. With their cost-effective innovative drug assets, Chinese innovative pharmaceutical companies are gradually becoming attractive partners in the eyes of multinational pharmaceutical companies.

Transaction highlights

In the BD transaction landscape in 2025, the two major fields of ADC (antibody-drug conjugate) and GLP-1 (glucagon-like peptide-1) performed particularly well and became the focus of the transaction market.

The ADC field has set off a deal boom since the beginning of the year. On January 8, Innovent Biologics announced that it had signed an exclusive license agreement with Avenzo Therapeutics. Avenzo Therapeutics will obtain the exclusive rights to develop, manufacture and commercialize DB-1418/AVZO-1418 worldwide (excluding Greater China). Innovent Biologics will receive a down payment of US$50 million and will be eligible for development, registration and commercialization milestone payments of up to US$1.15 billion. On January 2, Innovent Biologics granted Roche exclusive rights to develop, manufacture and commercialize IBI3009 (a new generation ADC candidate targeting Delta-like ligand 3 (DLL3)) worldwide, and will receive an upfront payment of US$80 million, as well as potential development and commercialization milestone payments of up to US$1 billion.

According to incomplete market statistics, at least 14 ADC drugs will reach overseas transactions in 2024, and nearly half of them have a total transaction amount of more than US$1 billion. ADC drugs can accurately deliver cytotoxic drugs to tumor cells, with both targeting and lethality, showing great potential in the field of cancer treatment, making it a hot track for pharmaceutical companies to compete for layout.

The GLP-1 track is also hot. The assets traded by Sunway and Verdiva Bio are a GLP-1 product portfolio. The transaction includes an initial payment of nearly US$70 million, potential development, registration and commercialization milestone payments of up to US$2.4 billion, and tiered sales commissions after the product is commercialized. With the increasing incidence of metabolic diseases such as obesity and diabetes, GLP-1 receptor agonists are not only effective in lowering blood sugar, but also show broad application prospects in areas such as weight loss. The market demand for GLP-1 drugs continues to grow, driving this track to become a hot area for BD transactions.

Innovative models emerge

In the BD transaction practice in 2025, in addition to the traditional License-out model, the NewCo model has gradually emerged, bringing new ideas for the cooperative development of innovative drugs. The NewCo model refers to the establishment of a new company led by an investment fund, which invests funds and forms a team. At the same time, Chinese local pharmaceutical companies authorize the overseas rights of the drug to the new company. In addition to obtaining conventional financial returns such as down payments, milestone payments, and sales commissions, local pharmaceutical companies can also obtain part of the equity of the new overseas company, and can exit in the future through the listing of the new company or mergers and acquisitions.

In January 2025, Conoya Bio announced a cooperation agreement with a down payment of US$30 million and recent payments, as well as an additional payment of up to US$340 million. This was Conoya's third NewCo deal in a year and the first NewCo deal in the new year. On the same evening, Kelun Biotech and Hebo Pharmaceuticals jointly announced that they had signed a licensing agreement with Windward Bio for the innovative anti-thymic stromal lymphopoietin monoclonal antibody SKB378/HBM9378. In this NewCo transaction, the down payment and recent milestone payments totaled US$45 million, including cash payments and equity in Windward Bio's parent company.

This model breaks the single cooperation form of traditional transactions. Through equity binding, it enables local pharmaceutical companies to participate more deeply in the overseas development and commercialization of drugs, which helps to improve the development and commercialization efficiency of innovative drugs in overseas markets and provides innovative pharmaceutical companies with a more diversified development path.

Conclusion

The explosive growth of BD transactions in 2025 is an important milestone for China's innovative drug industry to move towards the global market. It not only demonstrates the improvement of the technological strength of local pharmaceutical companies, but also reflects the trend of global pharmaceutical resource reorganization.

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