China poised to eclipse US innovators with surge in global licensing

With growing R&D output and global dealmaking, China is challenging America’s long-held biotechnology leadership, reshaping supply chains and the dynamics of the contract development and manufacturing organization (CDMO) market. That’s the consensus of a panel session held this week at the INTERPHEX conference in New York City.

“Nearly 40% of global pharma licensing originated from Chinese innovation and if that momentum holds, China is poised to eclipse U.S. innovators in the not-too-distant future,” according to Brian Scanlan, managing partner of Freedom Bioscience Partners, who moderated the panel discussion.

China has built a CDMO and contract research organization (CRO) infrastructure of “staggering scale and sophistication” that “now rivals, and in many cases surpasses, its Western counterparts,” according to the panel abstract.

Scanlan warned that China’s biotech ecosystem is rapidly evolving — mirroring the meteoric rise of its CDMOs and CROs — with the shift raising “profound” questions, including where the development and manufacturing of these therapies will take place for such highly complex modalities as antibody-drug conjugates and multi-specific antibodies.

GlobalData in an October 2025 report found that China continues to make strides in innovative drug development and has accelerated its first-in-class capabilities, demonstrating the country’s successful transition into a global hub for innovation. “As a result, global biopharma organizations are more incentivized to partner with China-based organizations for innovative therapies,” according to the report.

In the first quarter of 2026, Scanlan called out the fact that 90% of the licensing activity from Chinese innovators has been centered around early innovations with pre-clinical and Phase 1 assets. 

Looking at clinical trial starts by sponsor headquarter location, Scanlan said China has grown significantly in its overall contribution to drug development over the past five years and is “on par with U.S. clinical trial activity.”

The bottom line: China is now a global leader when it comes to drug development and manufacturing, setting the stage for a geopolitical and industrial showdown with the U.S.

Bifurcated global ecosystem

Stella Vnook, CEO of Kaida Biopharma, was among the INTERPHEX panelists and said the implications for the biotech ecosystem are significant as it’s no longer just about cost or capacity but where innovation originates, where development happens, and who ultimately controls the value chain.

“We are seeing the early stages of a bifurcated global ecosystem,” Vnook wrote in a LinkedIn post this week, with innovation increasingly originating from China, development pathways potentially following geography, and policy and regulatory frameworks shaping access and flow. “The future of biotech will not be defined by science alone. It will be defined by strategy, infrastructure, and geopolitical alignment.”

Gil Roth, president of the Pharma & Biopharma Outsourcing Association (PBOA), commented that on the policy and regulatory front the U.S. has tried over the past few years to “slow down” China but those efforts are not working.

“We hear a lot about reshoring and whether or not the policies are the right policies in place to generate more manufacturing and more innovation here in the U.S. — or at least on a more competitive scale in terms of speed and cost,” Scanlan added.

Congress charged the National Security Commission on Emerging Biotechnology (NSCEB) with developing recommendations to advance America’s biotech leadership. In April 2025, NSCEB issued its final report calling on the U.S. government to spend a minimum of $15 billion over the next five years in the sector to maintain global dominance.   

“In biotechnology, America is at risk of losing its edge,” the report said, noting that China is quickly ascending to biotech dominance. “The U.S. government has not prioritized biotechnology as a strategic sector like it has semiconductors and artificial intelligence.”

WuXi AppTec grows US sales

The NSCEB warned that China has made biotech a strategic priority for 20 years and that Chinese contract developers and manufacturers such as WuXi AppTec have “benefited greatly” from government support.

At this week’s INTERPHEX panel, Scanlan pointed out that WuXi AppTec reported record revenue in 2025 despite U.S.-China geopolitical tensions, with the company’s revenue generated from the U.S. market increasing more than $34% year-over-year.

“It was all driven by U.S. sales,” Scanlan said, while noting that WuXi AppTec’s sales from Europe and China declined last year compared to 2024.  

Allison Vavala, senior director of business development at Flamma, said she is not surprised that WuXi AppTec continues to thrive in the current geopolitical environment with the U.S. as an increasingly important market.

“On the early-stage preclinical/Phase 1, it’s hard to compete [with WuXi AppTec] from a cost and time perspective,” Vavala said. “They just have so many more FTEs [full-time equivalents] that they can put on a project.”