Core Insights - In 2025, China achieved a record high in overseas business development (BD) transactions for innovative drugs, with 157 deals totaling $135.655 billion, including an upfront payment of $7 billion [1][3][16] - The year 2025 marked a significant shift in the BD landscape, transitioning from a "1.0 era" of simple asset sales to a "2.0 era" characterized by deeper partnerships and higher value creation [5][16] Transaction Overview - The top three BD transactions in 2025 included a $13 billion deal between Qide Pharma and Biohaven & AimedBio, a $12.5 billion deal between Hengrui and GSK, and a $11.4 billion deal between Innovent Biologics and Takeda [2][11] - China accounted for 49% of the global total for BD transactions in 2025, surpassing the United States for the first time [2][11] Financial Metrics - The total upfront payments for BD transactions in China reached $7 billion in 2025, nearly doubling from $4.1 billion in 2024, with individual transaction upfront payment ratios increasing to approximately 5.2%-6.7% [7][16] - Milestone payments also saw significant activity, with at least 10 transactions triggering milestone payments in 2025, indicating a trend towards more structured financial agreements [9][16] Therapeutic Areas and Pipeline Stages - Oncology remained the primary focus of BD transactions, accounting for 51.4% of deals, although other areas such as immunology and metabolic diseases gained traction, rising to 34.1% [11][13] - The distribution of pipeline stages showed a shift towards later-stage projects, with 22% of transactions involving Phase III or marketed products, reflecting a preference for assets with established clinical data [13][16] Collaboration Models - The "Co-Co" model, which emphasizes joint development and commercialization, emerged as a new strategic direction in 2025, complementing traditional "License-out" and "NewCo" models [15][16] - This evolution in collaboration models indicates a trend towards deeper partnerships, allowing for shared risks and rewards, and enhancing the overall value proposition of BD transactions [15][16] Future Outlook - The demand for Chinese innovative drugs is expected to remain strong in 2026, driven by the approaching patent cliffs and increasing global competition, suggesting continued activity in BD transactions [21][22] - The industry is anticipated to further mature, focusing on quality and value in BD transactions, with an emphasis on long-term collaboration and mutual benefits [21][22]