Opening Introduction: In the first half of 2026, the total overseas licensing transaction volume of China’s innovative drugs will exceed $110 billion, accounting for 80% of the total for the entire year of 2025; Among the top ten global BD transaction volumes, Chinese pharmaceutical companies hold 8 spots.

Behind the numbers, a deeper qualitative transformation is underway—Chinese innovative drugs going global are bidding farewell to the traditional early licensing model and moving toward a new global win-win paradigm of “joint development and shared profits.”

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1. Limitations

of Traditional Models A few years ago, the mainstream approach for Chinese innovative drugs going global was to grant overseas rights to multinational pharmaceutical companies early in R&D to obtain upfront and milestone payments.
Although this model can quickly recoup funds, Chinese pharmaceutical companies usually lose substantial involvement in global product development and commercialization decisions after the deal is completed, and they give up most of their future earnings. Within the industry, this model is vividly called “selling green seedlings”—the saplings are sold before they mature, and by the time they grow into towering trees bearing fruit, they have nothing to do with Chinese pharmaceutical companies.
The fundamental problem with this model is not “selling,” but “selling and it’s gone.” The true value of a drug is unleashed in late clinical and commercialization stages, partly in multi-billion dollar market returns. Meanwhile, Chinese pharmaceutical companies have long relied solely on the “down payment” package, with no opportunity to accumulate global clinical development experience, establish overseas registration capabilities, or build multinational commercialization teams. Over the past decade, pipelines have sold quite a bit, but the company’s core capabilities have not grown.

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2. Three New Models

for Going Global Amid the difficulties of traditional models, a group of capable companies have begun to explore new cooperation methods. In 2026, three new models will be launched simultaneously.

(1) The cooperation model has changed—Co-Co model: From licensing to joint development
Under the traditional License-in/out model, domestic companies typically authorize multinational pharmaceutical companies for product development and commercialization rights in specific regions to receive upfront payments, milestone payments, and sales commissions, but their involvement in global development and commercialization decisions is usually limited.

By 2026, this model is undergoing a fundamental transformation.
The collaboration between Innovent Biologics and Pfizer is a typical example of the Co-Co model. Both parties adopt a tiered equity model: the four core projects are jointly developed globally, sharing development costs and co-commercializing and profit-sharing in the US and Europe, while Innovent Biologics retains rights for Greater China.
This marks the second time Innovent has deeply partnered with an international pharmaceutical giant through a Co-Co model, following its $11.4 billion strategic partnership with Takeda Pharma in 2025. In previous collaborations, Cinda and Takeda jointly commercialized in the U.S. market and shared profits at a 40/60 ratio. This collaboration further expands to the two major markets of the United States and Europe, together accounting for 75% to 80% of global innovative drug profits.
Hengrui Medicine has also completed a $15.2 billion partnership with Bristol-Myers Squibb, giving Hengrui the option to jointly develop specific projects and the opportunity to collaborate with BMS on a global commercialization scale. Zhang Lianshan, Director and Executive Vice President of Hengrui Medicine, commented: “Any cooperation is for a strong alliance and strategic alliance.” ”
The core value of the Co-Co model lies in finding a balance between “short-term payment collection” and “long-term capability.” For most Chinese pharmaceutical companies, the threshold for building their own overseas commercialization teams is extremely high—BeiGene has established its own sales and medical access teams in more than 40 countries across Europe, America, and Asia-Pacific, with overseas revenue expected to reach 26.185 billion yuan by 2025. However, this model is costly and not all companies can replicate it. The Co-Co model allows Chinese pharmaceutical companies not to bear all overseas risks alone and to deeply participate in global profit distribution.

The actions of these two leading Chinese pharmaceutical companies illustrate a trend: the Co-Co model is no longer an attempt by a few companies, but is becoming one of the mainstream paths for going global.

(2) The transaction model has changed—NewCo model: From product licensing to asset operation
. In addition to the Co-Co model, the NewCo model will also appear frequently in 2026.
According to statistics, as of June 25, 2026, at least 13 European and American NewCo companies based on Asian asset licensing have been established, of which 9 own assets from Chinese companies.
The essence of NewCo is the upgrade of Chinese innovative drugs going global from “single product licensing” to “asset-based corporate operations.” Its breakthrough lies in breaking away from the traditional linear revenue framework of BD transactions with upfront payments + milestones. By packaging the pipeline as an independently operating company entity and binding overseas professional investment institutions and operations teams, Chinese pharmaceutical companies can simultaneously reap multiple returns: licensing revenue, equity appreciation, and long-term commercialization returns.
Hengrui Medicine is a pioneer in this model:
in May 2024, Hengrui licensed GLP-1 assets to Kailera Therapeutics, established by Bain Capital, receiving a $100 million upfront payment and a 19.9% stake. Since then, Kailera has raised over $1 billion in total funding and is scheduled to go public on Nasdaq in 2026, recording a gain of over 60% on its first day of listing.
Hansoh Pharmaceutical’s NewCo operations are more sophisticated:
in June 2026, Hansoh licensed its oral peptide IL-23 inhibitor to the U.S. company Avere Therapeutics, receiving a $120 million upfront payment and a milestone payment of up to $2.18 billion. Subsequently, Hansoh became a major shareholder of Avere through convertible bond investments, and Avere soon announced a merger with Nasdaq-listed NextCure for a backdoor listing. After the merger, Hansoh appointed two directors to Avere Therapeutics, reflecting this deep governance involvement—Chinese pharmaceutical companies are no longer just passive choices, but remain continuously involved in subsequent asset development strategies through corporate governance structures.
Under the NewCo model, Chinese pharmaceutical companies simultaneously gain multiple return paths: licensing revenue, equity appreciation, and long-term commercialization profits, shifting the income structure from “linear” to “multidimensional.”

(3) The transaction phase has changed—preclinical projects can also be sold at high prices
. In major deals in 2026, many projects remain stuck in early-stage R&D or even preclinical stages.
Hengrui’s 13 early-stage projects in collaboration with BMS, and 12 early-stage oncology pipelines in cooperation with Innovent and Pfizer, have all completed billion-dollar licensing with early-stage assets.
Hisco’s case is even more typical: in August, Hysco licensed a preclinical self-immunity program to Sentivera Therapeutics in the US, receiving an upfront payment of about $75.89 million (including $40 million in cash and a 17.5% equity interest equivalent to $35.89 million), as well as a milestone payment of up to $1.46 billion. This is already Hisco’s fifth BD deal since 2026.
Behind the early batch of asset launches is a systematic improvement in the quality of China’s innovative drug R&D. Of the 38 Class 1 innovative drugs approved in the first half of 2026, 11 are globally first-of-the-world target drugs, all independently developed domestically.
At the 2026 ASCO Annual Meeting, 94 research projects related to China’s innovative drugs were selected for oral presentations, including 12 selected for the latest breakthrough abstracts, all setting new records. Akeso Biologics’ independently developed PD-1/VEGF bispecific antibody Ivoxil was selected for ASCO’s highest-level plenary session, marking a new breakthrough in the academic history of China’s innovative drugs.
The deeper meaning of this shift is that multinational pharmaceutical companies’ trust in Chinese innovative drugs has upgraded from “trusting data” to “trusting science”—in the past, they were only willing to pay for clinically validated molecules; now, they are willing to bet on projects that have not yet entered clinical trials but sound scientific logic. This is the core change behind the “early asset listing.”
The combination of these three models points in the same direction: Chinese pharmaceutical companies are shifting from “selling products” to “building capabilities.” From selling out equity to joint development, from obtaining upfront payments to holding equity, from waiting for clinical data readouts to early global pricing—each step corresponds to a structural enhancement in capability.

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3. Risk Warning

under the New Model The three new models have indeed changed the pattern of China’s innovative drugs going global, but they also come with corresponding risks.
The Co-Co model demands extremely high capital and operational capabilities. Co-development means Chinese companies must bear the costs of overseas clinical development—a global multicenter Phase III trial can easily cost hundreds of millions of dollars. For smaller biotech companies, this can be a heavy burden. Innovent Biologics’ ability to complete consecutive Co-Co transactions is closely tied to the cash flow it has accumulated commercially in recent years—not all companies meet this condition.
There is uncertainty in the fulfillment rate of milestone payments. From a clinical advancement perspective, the success rate from Phase II to Phase III is only 28.9%, and many milestone payments ultimately remain difficult to deliver. Among the “potential total amounts” in the tens of billions of dollars, the ones that truly materialize are usually down payments and early milestone payments. This year’s semi-annual report coincides with the first “closing period” of BD transactions, with large amounts of down payments and milestone payments confirmed, becoming a key window to assess the “gold content” of each company’s BD.
NewCo’s equity value carries a risk of a bubble. Among the 13 NewCo companies, not every one managed to go public as successfully as Kailera and record gains exceeding 60%. The essence of NewCo is “trading pipelines for equity.” If NewCo’s subsequent financing fails or clinical data falls short of expectations, the equity held by Chinese pharmaceutical companies could shrink significantly, and the final return may not be as high as the upfront payment of traditional BD transactions.
Early-stage asset trading carries higher scientific risk. Multinational pharmaceutical companies are willing to “trust the science” and bet on early-stage projects, but scientific assumptions do not always translate into clinical success. The better the preclinical data, the greater the loss in clinical failure. For asset holders, early trading can quickly recoup funds, but it also means giving up much of the value later on—if the project ultimately succeeds, the early grantee can only receive milestones and revenue shares, not all profits.
Co-Co, NewCo, and early overseas expansion—each new model has its own applicable scenarios and costs. While embracing the new model, Chinese pharmaceutical companies need to make clear choices based on their own financial strength, risk tolerance, and strategic goals.

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4. Conclusion
The transaction data
of hundreds of billions of dollars marks a new stage for Chinese innovative drugs going global. From simple rights transfer-based licensing in the past to today’s Co-Co joint development, NewCo asset corporatization, and early-stage pipeline mass exports, Chinese pharmaceutical companies are transforming from asset exporters into profit participants and rule-makers in the global innovation chain.

For domestic pharmaceutical companies, the choice of cooperation path ultimately depends on their R&D capabilities, financial strength, and long-term strategic positioning. In the next 2 to 3 years, a batch of major collaborative pipelines will gradually see key clinical data readouts. The real turning point wasn’t at the signing site, but at the moment the data was released. Clinical data is the ultimate measure of this wave of overseas expansion.

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