Navigating Biotech Collaboration in China: Irene Hong on Dealmaking in a Shifting Landscape
ChinaBio Thought Leadership Series
Brian Yang
When Irene Hong began covering China’s healthcare sector in the early 2000s, few could have predicted how rapidly the market would evolve. Once known for generics, China is now becoming a powerhouse of biotech innovation—drawing increasing attention from global players eager to collaborate with local firms.
“Today, if you’re not in China, you’re at risk of missing something big,” said Hong, Founding Partner at CEC Capital, in an exclusive interview ahead of her keynote panel at the upcoming ChinaBio® Partnering Forum in Shanghai on April 23. Her panel, Global Biotech Perspective: Navigating Innovation and Collaboration in China, will explore how foreign companies can work more effectively with Chinese innovators.
China’s Innovation Ascent
The numbers tell a compelling story. In 2024, one-third of all global biotech assets licensed by Big Pharma originated from China, with most focused on oncology, diabetes, and immunology. That marks a sharp departure from 2017, when Johnson & Johnson’s licensing of a BCMA CAR-T therapy from Nanjing Legend was met with skepticism over data quality and clinical rigor.
“Perceptions have shifted dramatically,” said Hong. “The attitude toward China-originated innovation has really changed. Now, collaboration is the norm, not the exception.”
Mirroring the success of Chinese electric vehicle brands—now accounting for 62% of global EV sales—and the emergence of DeepSeek, China is rapidly gaining a reputation for the ability to innovate “cheaper and faster.” China’s biotech sector is now stepping confidently onto the world stage.
Opportunity Amid Headwinds
This rise comes even as the U.S. government tightens restrictions. Policies like the BioSecure Act and America First Investment Policy are designed to limit U.S. exposure to China’s strategic industries, including biotech. Meanwhile, the National Security Commission on Emerging Biotechnology recently recommended $15 billion in federal investment to bolster the U.S.’s competitive edge.
Still, Hong believes that geopolitical tensions haven’t significantly dampened cross-border biotech activity.
“The door hasn’t closed,” she said. “Despite the geopolitical pressures and rhetoric, deals are still happening. The capital market is challenging and China biotech needs to survive, and to do that, they must get their assets to the clinic. That means they’re eager to consider various structures, including commercial partnership, licensing, JV, and acquisition.”
Domestic funding for Chinese biotechs dropped 50-60% in 2024, while foreign capital fell by more than 80%, creating a funding crunch that makes external partnerships more critical than ever.
The Rise of the NewCo Model
One increasingly popular model is NewCo formation: U.S.-based financial investors license assets from Chinese firms and establish new U.S. companies to develop them. While not a new concept, its resurgence signals a practical workaround for assets that aren’t quite ready for full acquisition.
“It’s a step short of selling to multinationals, who often need more data before deciding to invest in an asset,” Hong explained. “NewCo gives promising but unproven assets a chance to mature.”
The model also reflects the broader Chinese push to “go global,” or Chuhai, by leveraging international capital, expertise, and regulatory infrastructure. There can be a misperception Hong notes, however, “NewCo’s are not about taking a China asset and re-branding it to look non-Chinese. It’s about taking an asset and passing the baton to a highly experienced foreign team, supported by foreign capital, to stack the deck in its favor in this highly competitive environment.”
Many U.S. investors have utilized the NewCo model to acquire innovative assets from China, some of the NewCos have been successfully launched, including Jiangsu Hengrui and Hercules’s Kailera Therapeutics, Keymed and Genor’s merged entity Belenos.
Bridging the Cultural Divide
CEC Capital has been working on cross-border deals for over 25 years. While many of the large pharma companies have strong search and evaluation teams on the ground, as well as transaction teams, Hong finds that there are many smaller mid-cap companies that are interested in navigating partnerships with Chinese biotechs.
According to Hong, success depends on more than term sheets and science. Understanding cultural and business norms is critically important. “There is extreme subtlety and nuance when negotiating and thinking about how to structure a deal, and the challenges go far beyond language,” she said.
She cautioned that while China’s biotech ecosystem is vast and fast-moving, it’s also opaque in places. Many strong, under-the-radar companies and assets exist, but finding them requires on-the-ground expertise and local connections.
“Dealmaking in China can be incredibly rewarding, but it demands patience and local insight. Don’t rush it.”
Looking Beyond Blockbusters
Hong notes that collaboration opportunities are also expanding beyond the typical blockbusters. While immuno-oncology and GLP-1 assets remain hot, there’s growing interest in going beyond the hotly pursued antibody-drug conjugates (ADCs) to venture into infectious disease therapies and early-stage immunology programs.
“Not every deal has to be a mega blockbuster,” she said. “Sometimes, the right fit lies in more specialized or platform-based innovations.”
China’s biotech innovation is more diversified and merits dedicated attention that goes beyond blockbusters (see related coverage: China a hotbed for innovation despite potential pollical upheaval says experts)
Advice for Both Sides
For foreign companies: do your due diligence, identify the right partners, be patient and don’t rush it, and commit to understanding how China does business.
Doing business in China requires a long-term view, deep understanding of the local business culture and practices, and a desire to be persistent becuase the process can be taking months and months.
For Chinese firms looking to attract global attention: prepare your data, communicate clearly and regularily, and understand what Western partners expect.
“China has assets. China needs capital. That creates the foundation for synergistic partnerships,” said Hong. “But as always in biotech, you don’t know until you look.”
[Editor’s Note: CEC Capital’s founding partner Irene Hong will moderate the Keynote Panel discussion on global perspectives on innovation and collaboration during ChinaBio Partnering Forum, to be held in Shanghai on April 23 to April 24. Secure your spot Now. Click link here. We hope to see you in China soon!]
Brian Yang is a health journalist who has covered China's rising biotech sector for over 12 years. He writes for STAT News, In Vivo, among others.