China's Innovative Drug Out-Licensing Hits 81 Deals ~$110 Billion in H1 2026; 38 Class 1 Drugs Approved

On July 13, the National Medical Products Administration (NMPA) disclosed that as of June 30, China had completed 81 out-licensing deals for innovative drugs, with a total transaction value of about $110 billion, reaching 80% of the full-year 2025 total and setting a new record. By another measure, the value of out-licensing transactions in the first half was $99.7 billion, roughly twice the full-year 2024 total and 73% of the 2025 total. The 81 deals spanned 10 therapeutic areas, including oncology, metabolism, immunology, and neurology, with licensees from 20 countries and regions, including the United States, the United Kingdom, France, and Italy.

Among the top ten global pharmaceutical transactions in the first half of 2026, Chinese companies held eight positions, including a $18.5 billion cooperation between CSPC Pharmaceutical Group and AstraZeneca, a $15.2 billion strategic partnership between Hengrui Medicine and Bristol-Myers Squibb, and a $10.5 billion agreement between Innovent Biologics and Pfizer. Global pharmaceutical M&A totaled $134 billion, exceeding the full-year 2025 total of $112 billion, with 33 deals exceeding $1 billion, the highest since 2019. China-related transactions accounted for about 70% of the global total.

In 2025, the NMPA approved 11 drugs with new targets or mechanisms, four of which were domestically developed. In the first half of 2026, it approved 38 Class 1 innovative drugs, comprising 20 chemical drugs, 17 biological products, and one traditional Chinese medicine. Among them, 11 drugs with new targets and mechanisms were all domestically developed. Lan Gongtao, deputy director of the NMPA's Drug Registration Management Department, disclosed that the number of innovative drugs under development in China represents about 30% of the global total, ranking second worldwide.

On June 22, the NMPA approved Lunconilontumab, an EGFR×HER3 bispecific ADC drug independently developed by Baili Tianheng, making it the first bispecific ADC drug approved globally. It is currently undergoing more than 40 clinical trials for various tumor types in China and the United States. On July 14, Dizal Pharmaceutical announced a global exclusive license agreement with AstraZeneca for Sunvozertinib, granting development and commercialization rights worldwide. Dizal will receive a one-time upfront payment of $600 million, up to $400 million in clinical development milestones, up to $500 million in sales milestones, plus a share of global sales. The $600 million upfront payment sets a new record for upfront payments in out-licensing deals for small-molecule drugs from China.

In July, Rentosertib, the world's first candidate drug discovered by AI with a new target and designed de novo, started Phase III clinical trials in China. The drug was independently developed by Insilico Medicine for the treatment of idiopathic pulmonary fibrosis. As of June 2026, the global AI-driven drug clinical pipeline has grown from four in 2017 to 179, with nine having entered Phase III. More than 170 drug pipelines designed or optimized by AI have entered clinical stages worldwide. In the first half of 2026, Insilico Medicine entered strategic partnerships with Servier, Eli Lilly, SK Biopharmaceuticals, and Takeda, with the potential total value of the four deals approaching $7 billion.

WuXi AppTec's self-developed Chemistry42 platform generated revenue of RMB 45.456 billion in 2025, with an order backlog of RMB 59.77 billion. Hengrui Medicine's self-developed AI model Lingshu has submitted a JAK1 inhibitor for marketing approval, and its HER2 ADC has been granted priority review. In the first quarter of 2026, innovative drug revenue reached RMB 4.5 billion, up 26% year-on-year. Huadong Medicine's self-built AIDD platform has completed Phase III enrollment for an oral GLP-1 drug with dual indications, with a planned NDA submission in the fourth quarter of 2026. Hanyu Pharmaceutical, in collaboration with Huawei Cloud on an AI process optimization platform, has secured cumulative orders for GLP-1 active pharmaceutical ingredients exceeding RMB 500 million in 2026.