Chinese innovative drugs will explode, with nearly 100 billion yuan in investment and financing!

Ask AI · Why Are Innovative Drug Overseas Models Shifting from Licensing to Global Collaboration?

Source I Saipeilang

Recently, the Investment and Financing Service Professional Committee of the China Pharmaceutical Enterprise Management Association released the 2025 China Biopharmaceutical Investment and Financing Blue Book.

The Blue Book shows that in 2025, driven by multiple factors—including the continued release of policy dividends, accelerated cycles of technological innovation, and the deep integration of global resources—the biopharmaceutical investment and financing market has moved beyond the previous adjustment period, exhibiting clear characteristics of “total volume rebound, structural optimization, and innovation-focused allocation.” In 2025, the overall investment and financing scale reached RMB 8B. Of this, total financing in the primary market was RMB 8B; total IPO financing in the secondary market (24 companies) was RMB 32.35B; and total follow-on financing in the secondary market (28 companies) was RMB 29.28B.

Primary-market financing heat has returned to a more rational level. In the secondary market, a dual-engine structure has formed with IPOs and follow-on financing driving together. Diversified exit channels such as License-Out and New-Co are comprehensively connected, and the synergy effects between industrial capital and financial capital are becoming increasingly evident.

This year, investment and financing logic has shifted from chasing hot tracks to deepening value, from imitation and follow-the-leader to source-driven innovation. Chinese biopharmaceutical companies are using a dual engine of engineering-based innovation and original innovation to achieve a leap in the global industrial landscape—from “running in parallel” to “taking the lead.”

**** View of the Investment and Financing Market:****

A Coexistence of Total Volume Recovery and Structural Upgrades

(I) Secondary Market: A Dual-Engine Drive of IPO Rebound and Follow-on Financing Surge

In 2025, financing in the secondary market for biopharmaceutical companies rebounded strongly. Over the full year, a total of 24 Chinese biopharmaceutical companies completed IPOs on capital markets at home and abroad, with a total fundraising amount of RMB 33.04B, up sharply year over year by 129%, reversing the downward trend that had continued for two consecutive years.

Judging by listing locations, the Hong Kong Stock Exchange, leveraging its flexible listing mechanisms, became the main venue: 20 companies listed on Hong Kong equities, raising RMB 8B, accounting for 78.3% of total IPO fundraising for the year. The STAR Market maintained a “boutique” approach, with 3 companies raising RMB 29.28B. Among them, Heyuan Bio and Beibete were the first batch of approved companies after the restart of the fifth set of standards on the STAR Market, highlighting the support strength of A-shares for unprofitable innovative drug companies. Although the Nasdaq market saw only one listed company, Ascent Pharma, raising RMB 22.93B, its path of “listing first in Hong Kong, then in the U.S.” provides an important reference for global capital operations by innovative drug companies.

The Hong Kong Stock Exchange’s explosive growth benefited from ongoing optimization of the Rule 18A—establishment of a confidentiality application mechanism and fast approval channels, which greatly lowered the listing threshold for unprofitable biotech companies. As an industry leader, Hengrui Pharma raised RMB 8.901 billion via an IPO in Hong Kong; cornerstone investors accounted for 43.04% of subscriptions, becoming the largest-scale IPO case of the year and confirming the attractiveness of high-quality innovative assets to global capital. For the STAR Market, review standards have become stricter, focusing on companies’ core technologies and clinical value. Beiuo Saitu, as a CXO company, successfully listed, marking that the capitalized path for technology-platform-type companies has been fully opened.

Number of Listed Biopharmaceutical Companies in China and Financing Situation in 2025 (RMB 5.47B)

Note: Data source is CPEA’s “2025 China Biopharmaceutical Investment and Financing Blue Book”

The follow-on financing market also performed remarkably. In 2025, biopharmaceutical listed companies completed 29 follow-on financing deals in total. The disclosed total fundraising amount was RMB 882M, representing several-fold growth compared with 2024. Financing mainly came from Hong Kong equity placements and targeted share issues on A-shares. Funds were primarily directed toward advancing core pipelines, upgrading technology platforms, and building global strategies. WuXi AppTec led with RMB 8.9B. Other companies such as SynDian Bio and Baili Tiande raised over RMB 3.0 billion each, reflecting capital markets’ recognition of sustained innovation capability and commercialization potential. In terms of timing distribution, the third quarter was the peak for follow-on financing, with single-quarter fundraising accounting for 42% of the full-year total, showing the market’s continued restoration of confidence.

Comparison of Follow-on Financing in 2024 and 2025

Note: Data source is CPEA’s “2025 China Biopharmaceutical Investment and Financing Blue Book”

(II) Primary Market: Value Focus Amid Rational Rebound

In the primary market, in 2025 biopharmaceutical financing exhibited the characteristics of “an increase in the number of enterprises” and “higher capital concentration.” Over the full year, a total of 343 biopharmaceutical companies obtained primary-market financing, up slightly from 340 in 2024. Among them, 171 companies disclosed their total financing amounts, totaling RMB 8B. Although the disclosed total financing amount decreased slightly compared with 2024, considering that the proportion of companies with undisclosed amounts in 2025 reached 50% (22% in 2024), overall market activity is clearly higher, and the industry’s rebound trend is clear.

Comparison of Primary-Market Situation for China Biopharmaceutical Companies in 2024 and 2025

Note: Data source is CPEA’s “2025 China Biopharmaceutical Investment and Financing Blue Book”

**** Tracks and Targets:****

From Chasing Popularity to Deep Differentiated Development

(I) Therapeutic Areas: Tumor Leads, Coordinated Growth Across Multiple Tracks

In 2025, the investment and financing tracks for biopharmaceuticals took shape as “steady progress in oncology, with emerging tracks rising quickly.” The oncology field remained the focus of investment and financing, with primary-market financing amount reaching RMB 33.04B, accounting for 43.6%. Among them, innovative therapies such as ADCs, bispecific antibodies, and CAR-T attracted significant attention; companies such as Invenio Biotech and Kelun-Biotech continued to win capital favor through differentiated pipelines.

The immune system disease area achieved explosive growth, with financing reaching RMB 6.93B, a surge of 315.22% from RMB 2.3 billion in 2024, jumping to become the second most popular field. Rheumatoid arthritis, systemic lupus erythematosus, atopic dermatitis, and other conditions became key areas for planning; companies such as Xiaolu Bio and Quanxin Bio obtained large-scale financing.

The endocrinology and metabolic disease area continued to heat up, with financing amounting to RMB 8B, up 29.20% year over year. Driven by the commercialization of weight-loss drugs, obesity, NASH, diabetes, and so on became hot spots for investment and financing. Projects including HRS-9531 from Hengrui Pharma and UBT251 from Federal Pharmaceutical received capital support. Notably, UBT251 became the benchmark in the field through a License-Out transaction worth USD 2.0 billion. In addition, financing scales also saw significant growth in neurological diseases (RMB 32.35B) and cardiovascular and cerebrovascular diseases (RMB 8B), making the track’s diversification even more pronounced.

(II) Target Layout: Optimizing Mature Targets and Exploring Emerging Targets in Parallel

In 2025, the logic behind target selection in the investment and financing market was “optimize mature targets and seek breakthroughs with emerging targets.” Mature targets with clear commercial pathways—such as MET, PD-1, and VEGF—still remained favored. Among them, the MET target topped the financing list with RMB 1.17 billion. Companies often pursue differentiated innovation by leveraging technologies such as bispecific antibodies and ADCs to avoid homogeneous competition.

Efforts to explore emerging targets continued to intensify. Over the full year, 100 new targets were added into the investment and financing spotlight, spanning fields such as cancer, autoimmune diseases, and neurodegenerative diseases. Chinese scientific teams made outstanding contributions in discovering and advancing clinical development of new targets such as GPT1 and Listerin, highlighting coordinated progress between basic research and industrial transformation. At present, China’s domestic FIC pipelines under research have reached 920, maintaining a leading position as the world’s second and providing ample reserves for target innovation.

In terms of technology platforms, financing activity was active in cutting-edge areas such as AI drug discovery, nucleic-acid drugs, and cell and gene therapies. Innovent Biologics—Innoviz? (No, the text says 英矽智能) As the first AI drug-discovery company to list in Hong Kong, Haiteng? (No) Actually it is “英矽智能.” The AI drug-discovery platform is described as “英矽智能” raising RMB 61B upon its Hong Kong listing. JingTai Technology’s AI drug discovery platform, via a License-Out transaction worth USD 5.99 billion, refreshed industry records. The commercialization path for technology-platform-type companies has been fully opened.

**** Going Overseas and Exits:****

Reconstructing the Closed-Loop Value Chain Through Diversified Mechanisms

(I) Upgraded Overseas Model: From Asset Licensing to Global Collaboration

In 2025, China’s innovative drug overseas strategy entered a “qualitative change” stage. It evolved from a single License-Out approach to the coordinated development of multiple models such as License-Out, New-Co, and Co-Co. Over the full year, 158 License-Out transactions were completed, and the total value first exceeded USD 100 billion, reaching USD 145.9 billion. The upfront payment size rose to USD 7.5 billion, up 82.9% year over year. Qide Pharma ranked first with a total transaction value of USD 13.0 billion; the licensing of its FGFR3 ADC drug and ADC technology platform covering 21 targets demonstrates the global competitiveness of domestic foundational technologies. For Cinda Bio’s three ADC/bispecific antibody pipeline programs authorized to Takeda for USD 11.4 billion; Sansheng Biopharmaceutical’s PD1/VEGF bispecific antibody licensed to Pfizer for USD 6.05 billion—together showing the international premium capability of high-quality assets in the mid-to-late stages.

Number and Value of China’s License-Out Transactions in 2020–2025

Note: Data source is CPEA’s “2025 China Biopharmaceutical Investment and Financing Blue Book”

In 2025, the New-Co model moved from conceptual exploration to large-scale implementation. A total of 16 transactions were completed over the full year, involving 15 companies, with a total transaction value exceeding USD 16.3 billion. Cinda Bio and Takeda set up a new company and adopted a risk-sharing model of “sharing costs on a 40/60 basis and sharing profits.” Rongchang Biopharmaceutical and Vor Bio reached a strategic cooperation transaction with total value of USD 4.23 billion. They obtained warrants allowing subscription for 23% equity in Vor Bio, achieving deep cooperation characterized by “asset licensing + equity binding,” signaling that Chinese pharma companies are transforming from “pure licensing” to “global collaborative development.”

For independent overseas expansion, BeiGene’s zanubrutinib achieved global sales of USD 3.9 billion in 2025, including USD 2.8 billion from the U.S. market. It became the first domestically developed innovative drug to truly achieve successful global commercialization, providing an important reference model for the independent overseas expansion approach.

(II) Diversification of Exit Channels: IPO, M&A, and Licensing Authorization Working Together

In 2025, biopharmaceutical capital exit channels expanded across the board, forming a diversified pattern of “IPO as the core, M&A as a supplement, and licensing authorization as an important alternative.” IPOs remained the most important exit path. For early investors, 24 listed companies provided clear exit windows. For Baoji Pharma, the return multiple for C+ round investors after listing exceeded 3x. For Yinno Pharma, the exit return rate for Pre-A round investors exceeded 300%.

Industrial acquisitions remained active. China Biopharmaceutical acquired 95.09% of the equity of LiXin Pharma for RMB 8B, obtaining its key anti-bispecific and ADC core pipelines. Fosun Pharma acquired Green Valley Pharma for RMB 14.12B, improving its layout in neurological diseases and promoting consolidation of industry resources.

Licensing authorization became an important alternative exit path. In 2025, Taizhou Bozhirui repurchased 49% equity in Taizhou Jiaojiang Financial Investment Co., Ltd. for RMB 9.55B. Zhons? Actually it is “众生睿创” with “7家机构股权.” Specifically: “Zhongsheng Ruichuang” repurchased equity of 7 institutions for RMB 0.38 billion, providing investment institutions with flexible exit choices.

**** Policy and Capital Synergy:****

Build an Innovative Development Ecosystem

(I) Continued Release of Policy Dividends, Optimizing the Investment and Financing Environment

In 2025, at the national level, policies supporting the biopharmaceutical industry continued to be rolled out. Trillion-level venture capital guidance funds were implemented. The central government leveraged social capital to form scaled, long-term, patient capital. Local governments established biopharmaceutical industry funds in clusters; industrial clusters such as the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Beijing-Tianjin-Hebei region accelerated formation, providing ample funding support for enterprises in their regions.

On regulatory policies, the NMPA continued to optimize the drug review and approval processes. Throughout the year, 289 applications for new drug marketing authorizations were approved. Among them, 65 domestically developed Category 1 new drugs accounted for 85.5%, with homegrown innovation becoming an absolute main force. The Hong Kong Stock Exchange formally implemented Chapter 18C, providing a listing pathway for unprofitable advanced technology biotech companies. The restart of the fifth set of STAR Market standards further broadened the capitalized path for unprofitable innovative drug companies. At the same time, medical insurance negotiations and centralized procurement (tender) policies continued to be optimized. While compressing profit margins for generic drug manufacturers, they also guided capital to concentrate in the innovative drug sector, promoting high-quality development of the industry.

Category 1 New Drug Approval Situation

Note: Data source is CPEA’s “2025 China Biopharmaceutical Investment and Financing Blue Book,” and literature reports.

(II) Optimization of Capital Structure, Deep Integration of Industry and Finance

In 2025, the capital side showed a pattern of “industrial capital-led, with financial capital coordinating.” The activity of strategic investments by pharmaceutical companies increased significantly. Leading companies such as Hengrui Pharma and Fosun Pharma laid out high-quality upstream and downstream projects through industrial funds, forming a closed-loop ecosystem of “R&D—investment—M&A.” On the financial capital side, VC/PE institutions focused more on long-term value investing. Investment cycles were extended from 3–5 years to 5–7 years, better matching the R&D cycle of innovative drugs.

The S fund market (full name: Private Equity Secondary Market Fund, also known as Secondary Share Transfer Fund; a fund focused on investing in the Private Equity Secondary Market) developed rapidly. In 2025, transaction scale in the biopharmaceutical sector increased by 60% year over year. This provided mid-course exit channels for early investors and improved capital circulation efficiency. Meanwhile, long-term funds such as insurance funds and social security funds continued to increase their allocation to the biopharmaceutical sector, injecting a stable source of capital into industry development.

**** Challenges and Outlook:****

Seize Long-Term Opportunities Amid Innovation Breakthroughs

(I) The Main Challenges Faced Today

Although the market shows a recovery trend, biopharmaceutical investment and financing in China still faces multiple challenges. First, international competition is intensifying. Global innovative drug companies are increasing their presence and layout in China, and domestic companies face pressure from both local and global competition. Second, R&D risks are prominent. The characteristics of low success rates, long cycles, and high investment for innovative drug R&D have not changed. Some early-stage projects face the risk of being overvalued. Third, homogeneous competition has not been fully alleviated. Repeated layouts in popular targets and tracks still exist, and innovation differentiation remains insufficient. Fourth, international regulatory and intellectual property risks have become more prominent. Companies going overseas need to address regulatory differences across countries and regions, and intellectual property protection is an important issue.

(II) Future Development Outlook

Looking ahead, China’s biopharmaceutical investment and financing will show three major trends.

First, innovation will become more focused at the source. FIC and BIC drugs will become the core areas investors pursue. Coordination between basic research and industrial transformation will be further strengthened. It is expected that within the next 5 years, FIC pipelines under research will break through 1,500.

Second, track layout will become more segmented. In addition to traditional popular fields, more investment opportunities will emerge in niche tracks such as rare diseases, infectious diseases, cell therapy, and gene therapy. Precision medicine will become an important direction.

Third, globalization will deepen. Companies will transform from “exporting products overseas” to “globalizing R&D, production, and commercialization.” Models such as New-Co and Co-Co will become mainstream approaches for overseas expansion, and companies’ global innovative resource integration capabilities will become their core competitive strengths.

Number of China’s FIC Drugs Under Development

Note: Data source is CPEA’s “2025 China Biopharmaceutical Investment and Financing Blue Book,” and literature reports.

The biopharmaceutical investment and financing market in 2025 is both the starting point for a cyclical recovery and the beginning of innovation restructuring. Driven by multiple factors—policy, capital, and technology—China’s biopharmaceutical industry is moving away from homogeneous competition and entering a new development stage centered on clinical value, powered by original innovation, and staged in the global market. For investors, it is necessary to pay even more attention to companies’ core technology barriers, pipeline differentiation advantages, and global operating capabilities. For companies, only by adhering to long-termism and deeply cultivating innovation can they break through in global competition and jointly promote high-quality development of the industry.

Note: The data and core viewpoints in this article refer to the “2025 China Biopharmaceutical Investment and Financing Blue Book” released by the Investment and Financing Service Professional Committee of the China Pharmaceutical Enterprise Management Association.

Editor-in-charge | Wang Peng