Pharma Giants Bet Big on Early-Stage China Biotech Deals in 2026
Multinational pharmaceutical giants are accelerating their investments in early-stage biotech assets from China, with Merck, Novo Nordisk, and Novartis leading the charge in 2026. The three companies recently signed deals exceeding $300 million in upfront payments, targeting preclinical assets that span diverse modalities such as RNA-encoded T cell engagers, KRAS molecular glues, and GLP-1/GIP dual agonists. This surge in activity marks a significant shift from previous years, with the number of deals already surpassing the total from 2025, and the focus shifting to earlier-stage, innovative science.
The latest wave of deals highlights a broader trend in the pharmaceutical industry, moving beyond traditional antibody-based therapies and oncology to include novel approaches like RNA-encoded T cell engagers. For example, Novartis's agreement with Abogen involves an asset with limited clinical data, while Merck and Novo Nordisk are investing in preclinical assets. This trend underscores the industry's confidence in the potential of these early-stage technologies, despite the lack of clinical validation.
However, the rapid pace of these deals has raised political concerns in Washington. The focus is not on asset acquisition but on co-development arrangements that transfer knowledge and capabilities to Chinese partners. Treasury officials are considering more restrictive biotech rules under the COINS Act, which could impact future co-development deals. Additionally, the episode touches on the legal battle between Beam Therapeutics and YolTech, which centers on a complex trade secret case involving 'negative know-how' and a 2020 public poster.
The broader implications of these deals extend to the global biotech landscape. While Chinese assets are going global, the emergence of a truly global Chinese biotech company remains uncertain. Experts suggest that until a Chinese company owns its U.S. P&L, the path to becoming a global player may be slower than anticipated.