Goldman Sachs Says China Biotech Is Where Big Pharma Is Shopping Now

Big Pharma's Shift to China Biotech

Big pharma is sourcing assets from China biotech as $440 billion of drugs lose patents through 2032, Goldman Sachs says. This shift is driven by the need to replace patents on existing drugs and to develop new medicines. Chinese rivals could shorten product cycles at Western drugmakers, according to Salveen Richter, the bank's lead US biotech analyst.

Chinese Biotech's Growing Influence

Chinese biotech companies are increasingly partnering with Western firms, with AstraZeneca agreeing to invest $2 billion in US-listed Summit Therapeutics. Overseas licensing deals for Chinese drugs have reached over $120 billion in total value this year, Xinhua reported. This represents a 36% increase from the previous year.

Challenges Ahead

However, Richter notes that most Chinese work still builds better versions of existing drugs, which could flood the market. Chinese developers are also aiming for a foothold in obesity, the market behind Eli Lilly's stock rally. Richter says acquirers could pay smaller premiums over market value for biotechs outside China. Despite this, she believes that best-in-class first-in-class innovation around the world will still get rewarded.

Testing Chinese Data in Western Patients

Richter points to Summit's HARMONi-3 lung cancer trial against Merck's cancer drug Keytruda. The trial will test whether Chinese data holds in Western patients. Summit expects the next data from squamous tumors, a lung cancer subtype, in the second half of 2026. An April interim analysis delivered no early win, and Summit shares opened 24% lower the next day. Richter says Chinese drugmakers already partnered with Western firms may become the next multinationals. She would follow them as biotech investment opportunities.

China's Pharma Plan

Under the plan, 50 pharmaceutical companies would top 10 billion yuan ($1.5 billion) in annual revenue by 2030, Xinhua reported. Historically, China's industry has been a supplier of drug ingredients, but now it describes itself as shifting toward exporting new medicines.