BERNSTEIN：中国制药与生物科技-授权许可热潮，能否持续

Summary of China Pharma and Biotech Conference Call Industry Overview - The focus is on the China Pharma and Biotech sector, particularly the out-licensing activities and their sustainability in 2025 [1][7]. Key Insights - Out-licensing Growth: As of June 17, 2025, the total value of China's out-licensing deals reached $54 billion, surpassing the $47 billion total for the entire year of 2024. This indicates a significant increase in deal-making activity [1][9]. - US-bound Deals: Historically, about half of China's licensing deals have been with US partners. In 2025, 57% of the deal value is attributed to US-bound deals, suggesting that geopolitical tensions have not significantly impacted these transactions [1][9][11]. - Global Licensing Trends: The total value of global license transfers has been steadily increasing, with a notable contribution from China. In 2025, China's outbound deal value exceeded that of developed markets for the first time [2][13][15]. Emerging Drug Classes - New Favorites: The PD-1/VEGF bispecific and GLP-1 drug classes have emerged as the new favorites in out-licensing, with the former attracting deals worth over $20 billion and upfront payments exceeding $3 billion [4][38]. - Historical Context: Previous booms in 2020-2021 were primarily driven by PD-1 and TIGIT drugs, which ultimately faced saturation and deal terminations. The current growth drivers may also face similar risks of overheating and saturation [3][5][39]. Market Dynamics - R&D Efficiency: China's R&D efficiency has improved significantly, with clinical trial costs being approximately 1/5 of those in the US. This has led to a substantial increase in the size and quality of local players' pipelines [7]. - Investment in R&D: Despite market challenges, top pharma and biotech players in China continue to invest heavily in R&D, leading to a growing number of first-in-class assets [7]. Deal Activity - Mega-deals: There have been 23 license transfers to global players with total deal values exceeding $500 million, with over two-thirds of these deals valued at $1 billion or more [8][9]. - Upfront Payments: The average upfront payment for China's outbound deals is lower than that of developed markets, with a typical range of 3-5% of total deal value compared to around 10% in developed markets [2][14]. Future Outlook - Cautious Optimism: While long-term growth in out-licensing is expected, there are short-term concerns regarding the sustainability of the current boom, particularly with the potential saturation of key drug classes [5][39]. - Market Share Potential: Despite the significant role of top 20 multinational corporations (MNCs) in China's out-licensing deals, China's share of these MNCs' licensing deals remains low, indicating potential for market share gains [44][50]. Conclusion - The China Pharma and Biotech sector is experiencing unprecedented growth in out-licensing activities, driven by improved R&D efficiency and strategic partnerships, particularly with US firms. However, the sustainability of this growth remains a concern as the market evolves and potential saturation looms for key drug classes.