Chinese biotechnology companies are stepping up their global ambitions by increasingly turning to a new licensing structure that separates international development from domestic operations. Known as the “NewCo” model, this approach allows companies to create overseas entities dedicated to specific drug assets, enabling them to pursue global clinical trials, regulatory filings, and financing—while preserving equity and control in their core businesses.
More than 13 such NewCo deals were recorded in the first half of 2025, with a total estimated value exceeding $10 billion (¥72 billion CNY). The trend marks a shift from traditional out-licensing agreements, giving Chinese firms more flexibility in shaping their global strategy and attracting foreign capital.
“In the past, many Chinese companies would license their compounds outright. Now they’re choosing to spin off the asset into a NewCo structure, often based in the U.S. or Europe,” said an investment analyst at a Hong Kong-based healthcare venture fund. “It gives them a seat at the table in downstream development and commercialization, while de-risking their exposure.”
The model reflects China’s maturing biotech sector, where innovation is no longer limited to generic manufacturing but includes first-in-class and best-in-class drug candidates. These include novel antibody-drug conjugates, cell therapies, and AI-designed molecules.
Earlier this year, 3SBio signed China’s largest biotech licensing deal to date with Pfizer, transferring ex-China rights to its bispecific cancer antibody SSGJ‑707 in a deal worth up to $1.5 billion (¥10.8 billion CNY). The agreement includes $1.25 billion (¥9 billion CNY) in upfront payments and equity, with the potential to form a NewCo around the asset in Europe or North America.
Other firms, such as Sciwind Biosciences, are in talks to license out their GLP‑1 receptor agonists to U.S. firms following promising Phase III results for their obesity treatment candidate. Meanwhile, diagnostics companies like Burning Rock Biotech and Connect Biopharma have seen increased attention from U.S. investors, with both posting double-digit gains in ADR trading during July.
In parallel, capital markets in Asia remain active. Over 30 mainland Chinese biotech companies filed for IPOs on the Hong Kong Stock Exchange in the first half of the year, signaling continued demand for public funding as pipelines mature and cross-border ambitions grow.
In Wuxi, Dizal Pharma gained attention after the U.S. FDA approved its lung cancer drug sunvozertinib, making it the first China-originated innovative treatment to be added to the U.S. National Comprehensive Cancer Network (NCCN) guidelines. The approval followed pivotal data showing efficacy against EGFR exon 20 insertion mutations.
At the infrastructure level, AI-driven drug discovery firm XtalPi is expanding its global footprint with new partnerships in the Greater Bay Area, while Chinese investors continue to back cell therapy developers such as NK CellTech, which raised $14 million (¥101 million CNY) in fresh funding in July.
Industry observers say the NewCo trend is part of a larger evolution in Chinese biotech strategy: build at home, scale abroad, and do it on their own terms.