A paradigm shift—whether we like it or not

The pharmaceutical industry sits at the precipice of a transformation similar to what we witnessed in consumer electronics. Forty years ago, Western companies dominated electronics manufacturing. That is no longer true today. The core components of electronics have become commoditized, with China becoming the manufacturing epicenter. This transition wasn’t optional—it was inevitable as capital, know-how, talent, and regulations conspired to drive this shift.

Drug development faces a similar inflection point. Chinese biopharma companies are rapidly advancing in science, know-how, and talent. These startups can validate their science in the clinic within 18 months of discovery and produce intriguing data packages. In comparison, US & European biotechs can take 3+ years to identify a drug candidate (DC) and another one to two years of laboratory and animal studies to assess safety and efficacy—all before it reaches the clinical trial phase.

US biopharmas must take note. Having seen multiple technological shifts in biotech and tech, here are the four things I think will happen:

1. Higher Probability of Success (PoS) programs: The traditional biotech playbook of developing their own preclinical assets will change. Instead, they will in-license assets from Chinese companies that are generating robust clinical data packages at accelerated timelines. Though Western biotechs will need to perform their own clinical studies, the overall probability of success will improve as the Mechanism of Action (MoA)/program has been clinically validated elsewhere.
2. Build & buy: The scarcity of quality clinical-stage assets has constrained pharmaceutical pipelines. Chinese assets represent a substantial expansion of the available opportunity set, allowing companies to address portfolio gaps systematically and with less timeline risk. These assets may come from overseas partners directly or from US biotechs that already have advanced science in-licensed.
3. Operating models will evolve: As the cycle time to develop a promising clinical-stage asset decreases, the value in drug development will increasingly accrue at the extremes of the value chain—early-stage biological insights and target validation on one end, and late-stage developability and commercial execution on the other. Companies will have to choose what they want to excel at.
4. Blockbuster busters: Perhaps most consequentially, this new paradigm threatens the Net Present Value (NPV) of established and emerging blockbuster drugs. As we are seeing in immuno-oncology, the longevity of franchises can be cut short (Merck’s Keytruda is an excellent example). Overseas partnerships can accelerate the development of comparable (or better!) assets, so the underlying value of a blockbuster could collapse under competitive pressure.

Operationalizing your global in-licensing strategy

As this dislocation in drug development plays out over time, there are three tactical steps every mid-size to large pharmaceutical company should take.

1. Decide your attitude

You and your team need to be honest and check your bias about Chinese assets. Do you view them as transformational? A threat? Or, are they to be ignored? What is the long-term cost to your prospect if not responding to these opportunities?

2. Gird for language barriers

Assuming you’re committed to in-licensing Chinese programs, you’ll need to prepare for non-English data and documentation. While human translation can support individual analysis, search and evaluation drives substantial volume, variety, and velocity of data. Scientific teams, augmented by AI-enabled tools trained on biomedical and regulatory terminology, can provide the capacity and scale required to quickly analyze large volumes of disparate types of data at scale.

3. View data with skepticism

Diligence is about trust. Your team will need to examine and verify the data provided to develop trust in the program. Having analyzed thousands of programs, we’ve seen how world-leading teams evaluate science. Consider the completeness and consistency of the data you’re reviewing. This is easier said than done, especially with translated scientific documents.

The path forward

This paradigm shift presents both threats and opportunities to the biopharma industry. Companies that embrace this change and develop systematic approaches to identifying, evaluating, and integrating Chinese assets will gain significant competitive advantages. The future of drug development is increasingly global, and the organizations that adapt most effectively will define the next era of pharmaceutical innovation.

If you’re evaluating assets—whether for in-licensing or your own portfolio—our platform, VibeOne, serves as an AI analyst to help identify the risks and PoS of your programs. Get in touch if you’d like to discuss how we can support your drug development strategy.