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China is becoming an increasingly influential player in the global biotech market. More than a third of U.S. licensing deals this year have involved assets sourced from China, underscoring how central the country has become to innovation and dealmaking.
At the same time, U.S. companies are navigating growing regulatory and policy pressures, including Most Favored Nation (MFN) pricing proposals, global tariffs, and changes at the Food and Drug Administration (FDA). To kick off the inaugural BIO Investment and Growth (BIG) Summit, panelists examined how investors and companies alike are balancing global opportunity with rising trade and policy risk. The experts identified the need for clear, consistent signals of certainty to sustain long-term capital investment in the U.S. biotech ecosystem.
The US-China dynamic
“I’m really interested in the topic of this panel, because five or six years ago, it wouldn’t have existed,” started Arda Ural, Americas Life Sciences Leader at Ernst & Young LLP.
China has seen an explosion of innovation and out‑licensing revenue, which rose from around $1 billion in 2000 to $95 billion today. Clinical trials are a major driver of that growth.
“There were more clinical trials in partnership with universities in China than the U.S. last year—39% in China, 32% in the U.S.—and they are on the way to catching up to the total number of clinical trials this year, if not next year,” said Ural. “And the quality, timing, and how fast they’re coming to the market, in degree of deregulation, is stunning.”
Biotechs are considering collaborations in China now that the country has changed their processes to expedite clinical trials, according to Anthony Japour, CEO and President at iTolerance, Inc., a regenerative medicine company. Biotechs aren’t the only ones paying attention to China’s potential—lenders are, too.
“We’ve actually opened our own office in China because the opportunities there aren’t just the deals themselves,” explained Daniel Brog, a Managing Director at global investment bank Locust Walk, but also “the level of innovation, the quality of programs, and how quickly certain Chinese biotechs have moved—both emerging Chinese biotechs and, in some cases, even larger legacy Chinese generics and organizations that have invested in innovation and even pioneered some spaces.”
The effects of MFN and tariff pricing
Meanwhile, in the U.S., biotechs face major regulatory and policy challenges—such as the threat of Most Favored Nation (MFN) pricing and the price controls under the Inflation Reduction Act.
That, combined with the ongoing tariff disputes, has created pricing and policy uncertainty that is forcing some American companies to pause before jumping into global partnerships.
“We have seen more and more companies say the regional deal may not be worth it,” added Brog. “If the U.S. company now has to worry about destroying the value of the U.S. market by agreeing to a much lower price elsewhere, they’re not going to give that right up.”
FDA and clinical trials
Changes at the FDA are also shaking up clinical trial dynamics both domestically and abroad.
“The FDA has been the gold standard for the rest of the world,” said Ural. “You cannot just change the rules of the game in year 11 and expect a different outcome.”
Clinical trial and development cycles simply don’t tolerate rapid shifts well. As a result, a void is being created, and countries like China are eager to fill it.
“What China’s really accelerating the most is their ability to get into the clinic very quickly, run those studies very cheaply, and get to human data in an incredibly fast and capital‑efficient way,” explained Brog.
For example, it can often take 6–12 months to negotiate clinical trial contracts with academic institutions in the U.S. In China, on the other hand, processes “can go very quickly from the approval to the regulatory agency right into phase one,” Japour noted.
How do U.S. biotechs stay resilient?
A biotech’s resiliency comes down to three considerations.
Companies can’t control policy, but they can manage exposure. In the face of the threat of tariffs, some companies have backed away from international partnerships that might have considered otherwise. “The threat of tariffs was absolutely enough for us to really prioritize what seemed to be a safer option,” said Brog. In this case, that meant recommending that a client partner with a more expensive American Contract Development and Manufacturing Organization (CDMO) over a cheaper (and perhaps faster) CDMO in China.
“Even a tail risk that makes commercial products untenable in the U.S. is something that we have to take seriously,” he explained.
Brog recommended that companies maintain three levers: policy awareness, supply‑chain decisions, and capital/ownership structure. Specifically, he recommended that companies set up “with a relatively clean cap table,” find investors who won’t create governance issues, and establish an offshore geography to avoid tariffs and other global regulatory challenges.
Smaller biotechs, meanwhile, still have a basic need to prove their science works.
“We’re just trying to do proof of concept,” said Japour. “You can have great science and a great invention, but translating that invention into innovation, which is a commercialized product, is really the challenge we face.”
The challenge is even greater when shifting trade, pricing, and regulatory policies create uncertainty. Ultimately, panelists said, fewer of these headwinds and greater certainty are needed to ensure a strong biotech sector and continued innovation.
