36 deals into major markets for innovative drugs so far, tracking for 63 by year end (vs 57 in 2024).

With over half the year in the books, the patterns are starting to show:

• >$33B in total disclosed deal value (~$2.9B in upfronts)
• ~80% are Phase 1/2 or earlier, with ~30% preclinical
• ~50% are oncology and ~72% are oncology and I&I
• Most global deals exclude rights to Greater China
• Modalities are diverse, but antibodies dominate
• 36 deals and 36 different licensees - no repeat buyers. Even amongst Chinese licensors, only the largest names (i.e. Hengrui, Simcere, Harbour, Keymed etc.) are tied to multiple deals

A few observations:

1. Early stage reigns supreme

China is quickly becoming the West's early-stage R&D lab. They have built their model around speed to Phase 1 PoC readouts - giving buyers semi de-risked assets and compressing global development timelines.

But this is also because regulators won't accept China-only data (i.e. ORIENT-11 fallout), so late-stage trials in predominantly Chinese populations offer less signal at a higher price

But if the Ph1 data is compelling enough, you could even jump into pivotal studies right away

2. China's global reach is still limited (for now)

China's life sciences industry has made incredible progress over the last decade, but it is still not equipped to take drugs through global registrational studies & commercialization, especially in complex indications.

We can see this in the GSK / Hengrui deal itself - Hengrui is the largest Pharma in China, and yet it would rather take $500M upfront and be on the hook to run up to 11 more programs through Ph1.

Even with the cost efficiencies in China, this is still hundreds of millions of $

So as much as it seems as the West is relying on China for early-stage R&D, the reverse is equally true; China still depends on the West to realize global upside from its assets.

It's possible they grow into that role over time, but today, this is the playbook.

3. Things to watch as more deals get announced:

• The impact on $XBI and US SMID cap funding - these dollars used to go there
• Will China double down on its R&D-exporter model or try to go global?
• Will the Trump admin. take aim at these deals to protect US biotechs?