US Drugmakers Eye China's Pharma Goldmine with Licensing Boom
U.S. drugmakers are increasingly licensing molecules from China, with deals reaching $18.3 billion through mid-2024. This strategic move helps them rebuild product pipelines by accessing high-quality, cost-effective Chinese assets. Despite geopolitical tensions, these agreements remain lucrative amid declining traditional mergers.
In a strategic pivot, U.S. pharmaceutical companies have turned towards China for licensing molecules, securing access to potentially lucrative treatments at favorable costs. Figures reveal 14 such deals valued at $18.3 billion so far this year, up dramatically from just two in the comparable period last year.
This marked increase signifies a shift in U.S. strategies to rebuild decelerated drug pipelines, particularly as they face the impending expiration of patents on $200 billion worth of existing medicines by the close of the decade. Notably, analysts and industry insiders underscore the affordability and high-quality of Chinese pharmaceutical assets as key drivers of this trend.
The migration towards licensing, as opposed to traditional mergers and acquisitions, emerges as Chinese biotechs continue climbing the pharmaceutical value chain. With roughly a third of U.S. pharmaceutical assets being licensed from Chinese firms in 2024, the transactional landscape reflects an adaptation in the face of evolving international trade policies.
(With inputs from agencies.)
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