China pharma deals threaten U.S. biotech

A surge of recent licensing deals for Chinese drugs is sending new signals that the U.S. could be toppled as the world's biotech leader.Why it matters: A decade-long national strategy to develop its biopharmaceutical industry has left China in a position to deliver medical products faster and cheaper. It's part of a global power shift that's seen China emerge as a powerhouse in AI, chemistry and other areas, Andrei Iancu, undersecretary of commerce for intellectual property in the first Trump administration, told Axios."Any way you cut it, any way you measure, they're basically pointing in the same direction: China taking the lead, already leading, or knocking on the door in these various areas," Iancu said. By the numbers: China-sourced antibodies, heart treatments and other drug candidates will make up almost 40% of all licensing deals this year, up from less than 3% five years ago, according to Evaluate Pharma.Chinese biotech shares surged earlier this year amid an increase in licensing deals for cancer treatments, Financial Times reported in July.An analysis last week in Nature found 11 big pharma companies — including AstraZeneca, Bristol Myers Squibb, Eli Lilly and GSK — collectively committed more than $150 billion to license novel assets from Chinese sources in the last five years. GSK has the highest estimated share, with roughly 10% of its pipeline composed of assets from Asia.Between the lines: China's biotech boom comes as the U.S. is paring federal funding for biomedical research and freezing grants to universities and medical research institutes. Steep Food and Drug Administration staff cuts, the Trump administration's proposed 40% budget reduction for National Institutes of Health and its termination of $500 million for mRNA vaccine development could chill investor enthusiasm and fuel an exodus of research talent."This current retrograde step by the U.S. will allow others to catch up and likely pull ahead in the context of vaccines," Robin Shattock, professor of mucosal infection and immunity at Imperial College London, told Inside Higher Ed. "It will only take another pandemic for them to rapidly see their mistake."An independent commission in April recommended Congress and the White House dedicate a minimum of $15 billion over the next five years to unleash more private capital into the U.S. biotechnology sector.The White House and Health and Human Services Department didn't immediately respond to requests for comment.What we're watching: Congress is set to revive the Biosecure Act this fall as part of a debate on the annual defense authorization bill, which could restrict Chinese biotech "companies of concern" from participating in government-funded research.The bottom line: The way China's biotech boom coincides with a U.S. retreat could have far-reaching ramifications as drug manufacturers face a spate of patent expirations in the next five years.The question is whether pharma keeps turning east for less expensive new products.

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