Part II – The Pivot: China’s Biotech Shift with Oncology at the Core, Policy at the Edge

The risk ledger for cross-border biotech is shifting as oncology opportunities collide with policy, regulatory, and trade headwinds. Multinationals are embedding deeper into China’s cancer start-up scene through incubators and licensing, but the revival of the BIOSECURE Act under the 2025 NDAA, new FDA limits on exporting U.S. biological materials, and tariff uncertainty are reshaping how those collaborations operate. What was once efficient outsourcing or seamless trial design is now weighed against security concerns and geopolitical risk, leaving licensing as the most flexible route while large-scale capital commitments remain on hold.

Incubators and Licensing Deals Cement Cancer as China’s Core Cross-Border Asset

Oncology continues to anchor multinational activity in China, with incubator footprints and licensing deals tightly linked to cancer assets. AstraZeneca has established an innovation center in Shanghai and announced a second in Beijing, aimed in part at tapping into the city’s growing oncology start-up scene. Lilly’s first overseas incubator, launched in Beijing in March 2025, prioritizes ventures developing novel cancer therapeutics alongside other high-value indications. Roche’s Shanghai-based Roche Accelerator, opened in 2021, now houses more than 20 start-ups; of the 500-plus applications it has reviewed, a significant share has been oncology-focused, leading to 10–15 research collaborations in areas such as tumor immunology, cell therapies, and targeted biologics. 

These initiatives illustrate how multinational drugmakers are recalibrating their China strategy around oncology by engaging far earlier in the asset life cycle. Rather than waiting for late-stage validation, companies are embedding incubators and accelerators within Shanghai and Beijing to monitor, shape, and selectively de-risk innovation as it emerges. The approach dovetails with the surge in oncology-anchored licensing, such as GSK’s $12 billion multi-program alliance with Hengrui and Pfizer’s $1.25 billion upfront plus equity deal with 3SBio around a PD-1/VEGF bispecific. By combining physical footprints with portfolio-style transactions, multinationals secure privileged access to first-in-class and best-in-class cancer assets—ranging from ADCs and bispecific antibodies to cell therapies—that are increasingly competitive with Western pipelines. This dual strategy not only accelerates promising candidates into global clinical development but also helps hedge against pipeline gaps and the looming patent cliff in their core markets.

How the Model Is Changing Business Development

For years, cross-border biotech partnerships were built on a familiar rhythm: Chinese firms licensed drugs in from the West, adapted them for local markets, and occasionally spun out global-ready programs. That script is flipping. Now, U.S. and European investors are increasingly treating Chinese clinical trials as an early proof-of-concept engine—a way to derisk assets before rerunning pivotal studies to FDA or EMA standards.

The appeal is speed. Trial recruitment in China is cheaper, faster, and often more comprehensive than in the U.S., with treatment-naïve patient pools that allow programs to reach key readouts months, sometimes years, ahead of Western counterparts. Venture groups and Big Pharma strategics are leaning into this “China first” approach, where early-stage human data becomes a moat: whoever ties up an asset quickly can carry it into global development with a stronger starting hand.

But it’s not just about speed anymore. The largest 2025 deals show a shift from asset shopping to pipeline access. Instead of buying one promising molecule, companies like GSK are securing multi-program portfolios—in respiratory, immunology, and oncology—hedging not only technical risk but also geopolitical friction in one stroke. The idea is simple: spread the risk across multiple shots on goal, while ensuring a sustained flow of China-derived assets that can be plugged into global pipelines.

Recent deals illustrate the model in motion. Bain Capital and Atlas Venture launched Aiolos Bio and later Kailera Therapeutics around Hengrui-developed molecules, securing mid-stage data from Chinese trials before Western regulators ever weighed in. Within months, GSK bought Aiolos outright for $1 billion up front—an outcome that compressed timelines and returns in ways that traditional U.S. biotech pathways rarely deliver. Similar portfolio-style deals followed, with Pfizer and AstraZeneca tying themselves into multi-asset agreements that emphasize long-term pipeline visibility rather than one-off bets.

For U.S. biotechs, the dynamic is double-edged. On one side, Chinese trial data offers a shortcut to validation and fresh licensing opportunities. On the other, the sheer pace of programs entering the clinic in China means competition for targets is intensifying, raising valuations and crowding once-clear pathways.

The result is a new operating logic for business development: speed plus scale. Move early to capture assets validated in China, and secure broad portfolios instead of single molecules. That combination is becoming the default strategy for pharmas trying to fill looming pipeline gaps while navigating geopolitical uncertainty.

The Risk Ledger: How Policy Now Could Shape Pipelines

For cross-border biotech, the risk ledger is shifting fast. In Washington, the BIOSECURE Act has returned from dormancy. Revived through the 2025 NDAA, it targets reliance on Chinese CROs and CDMOs. What once looked cost-efficient now appears as a national security liability. Sponsors must rethink where and how sensitive work is performed.

Meanwhile, the FDA’s June decision added new pressure. It halted or reviewed trials exporting U.S. patient cells to “hostile countries.” Sample logistics, data transfers, and site selection suddenly became strategic choices. Developers are rerouting biological flows or reworking protocols to keep regulators satisfied. The alternative is delays—or worse, cancelled trials.

In addition, trade and tariff debates complicate planning. Supply-chain “de-risking” now collides with long-term capital strategy. Biotechs hesitate to commit to greenfield manufacturing in China due to tariff uncertainty. Instead, they lean on cross-border licensing as the safer lever. Licensing delivers speed, flexibility, and fewer geopolitical tripwires. Capital expenditure lags, but business development stays hot.

Ultimately, the risk calculus has expanded. Science, capital, and timelines no longer define the equation alone. Security, politics, and trade policy now sit at the center. Executives and investors must treat regulatory signals and tariffs as active variables—not background noise—in portfolio and partnership planning.

Bottom Line: Cross-Border Licensing as the Playbook

China has become a net exporter of drug innovation and BD value. The combination of local clinical speed, capital efficiency, and a maturing regulatory regime is pulling more western pipelines eastward for replenishment—and pushing competitors to adapt. The opportunity is significant; so are the policy unknowns. For now, the most durable strategy is targeted cross-border licensing, tight operational controls, and a wider search lens across China’s next wave of oncology and metabolic programs.

Author

Bernice Lottering