Over the past decade, there has been a notable change in China and its level of pharma dealmaking. By 2024, 26.7% of all development-stage drugs involved Chinese R&D. The country now spends more capital on R&D than the European Union (EU) and is edging closer toward US levels.
Consequently, the topic of China as a true innovator and main player in the space was a dominant talking point at this year’s BIO-Europe Spring. “China has really risen as a hot bed of innovation,” Martina Molsbergen, CEO of C14 consulting, told the audience in Milan, Italy today.
Molsbergen’s statement prompted panelists to discuss their respective outlooks on China and how they are interacting with Chinese companies within their organization.
“China is clearly a force in the biotech world,” said Matthias Mullenbeck, senior vice president, head of global BD & alliance management at Germany’s Merck KGaA. He described how the firm fully relies on its local teams when it comes to inking deals with Chinese companies because there is a “need to have people who know the market very well” and understand the players operating there.
While the dealmaking activity between Chinese products and western markets remain hot and ever expanding, Mullenbeck highlighted how Merck also thinks “about it from a risk-balancing perspective.”
He made it clear this is not about assets being different, but rather the “need to balance the portfolio” so the firm is never in a position where they are solely relying on a specific country or company.
Nick Gagnon, vice president and head of oncology global partnering at Ipsen, agreed with the sentiment of China being a true innovator. He said it is “relatively easy to find really great stuff” and told delegates “China is a very important source of innovation for us.” However, like Mullenbeck, Gagnon stressed that Ipsen is focused on other regions beyond China.
Political possibilities
The new US administration has introduced a certain level of uncertainty in the pharmaceutical space. President Donald Trump’s tariff policies have already affected some players in the sector. Last month, his additional 10% tariff on Chinese imports led to DNA sequencing firm Illumina – along with others– finding themselves placed on China’s “unreliable entities list” by the Ministry of Commerce.
The potential tariff shakeup could change how pharmaceutical companies operate geographically. Fabrizio Conicella, vice president, center of open innovation and competence at Chiesi Group, noted that “politics can influence” how pharma companies make decisions, despite the current level of uncertainty surrounding economic measures.