One of the largest U.S. pharmaceutical companies said this week that it will partner with a Chinese drugmaker to test some of its experimental drugs and discover new ones, a deal that could mark the next phase of coordination across continents.
Bristol-Myers Squibb announced on Tuesday the potential multi-billion dollar partnership with one of China's leading drug makers, Hengrui Pharma. The companies will work together to develop about a dozen drugs, including four that Bristol discovered and will ship to China for Hengrui to conduct early-stage clinical trials. The pair of companies will also collaborate to discover new medicines.
“It's a huge sign,” said Michael Baran, head of private investments at healthcare-focused hedge fund Affinity Asset Advisors and former partner at Pfizer Ventures. He said American drugmakers have partnered with Chinese companies to develop drugs before, including Amgen's 2019 collaboration with BeOne.
But the Bristol agreement is important because it is more reciprocal, he said. It raises the possibility that more American drugmakers could increasingly conduct early drug development in China as they try to bring treatments to market more quickly, and that Chinese companies could begin to become global powers.
The logo of the pharmaceutical company Bristol-Myers Squibb on the facade of the company's German headquarters in Munich, March 10, 2026.
Mattías Balk | Image Alliance | fake images
Bristol and Hengrui will contribute assets and work together to develop new drugs, making China look less like a source of single molecules and more like a part of the global pharmaceutical research and development operating system, Baran said.
American and European biopharmaceutical companies such as Pfizer, merck and AstraZeneca have been increasingly turning to China to find their next potential blockbusters. Just over half of Big Pharma's licensing deals have come from China so far this year, up from 39% all of last year and 5% in 2022, according to data from DealForma, which tracks deals in the sector.
Until now, the strategy of big drugmakers has mainly been to license drugs that were discovered and tested early in China, or essentially get experimental drugs out of China. Some American companies such as Eli Lilly have partnered with Chinese companies to discover and develop new drugs.
The Bristol deal differs because it sends several experimental drugs to China.
A worker checks the position of a feeding tray on a pharmaceutical manufacturing truck at Hengrui Biomedical Industrial Park in Lianyungang, China, Dec. 13, 2021.
photo | Future publications | fake images
Lieven Van der Veken, senior partner at McKinsey, said the Bristol partnership differs from others in some key ways. It's similar to a deal Hengrui recently signed with GSK that gives the British drugmaker access to some of Hengrui's experimental drugs. But with this deal, Bristol recognizes that it has drugs it can develop faster and for less money in China. And he is working together with Hengrui to generate new ideas.
“More and more companies are seeing this as a global mesh model where they are basically saying China is not a threat or a separate source of innovation, we have to leverage it from the inside out,” said Van der Veken, global leader of QuantumBlack, AI at McKinsey. “You have to participate. You have to be present. And people have tried to do it with local teams, people have tried to do it [venture capital]-based investments. “This is just the next level.”
Chen Yu, founder and managing partner of crossover fund TCGX, was one of the first leaders in bringing Chinese drugs to the U.S. He said the industry is now at a transformative moment in which more of the front-end work is moving to China, where twice as many drugs can be studied in half the time and at a third of the cost.
“For the past 25 years, American investors and entrepreneurs have had the luxury of not having to think about anyone else,” Yu said. “That won't be the future.”
By the end of the decade, Yu said, the notion of making early-stage drug discoveries in the United States may seem as realistic as making the iPhone in the United States. He believes the early stages of drug development will eventually go the way of textile manufacturing, which has largely moved to China.
Mid- and late-stage trials will still need to be conducted in the United States to gain approval from the Food and Drug Administration, he said, but conducting initial studies in China could help companies introduce drugs more quickly than they do today.
Some companies are already doing more of their early work in China. AstraZeneca is conducting most of its early studies for an experimental cell therapy in the country, said Ruud Dobber, who heads AstraZeneca's biopharmaceutical business. And he “absolutely” hopes that the British pharmaceutical company will do more with its projects.
People disagree about whether China's rise helps or hurts the U.S. biopharmaceutical industry. Some, like Yu, say making drugs faster and cheaper will help people who need them. Others, such as the industry advocacy group Biotechnology Innovation Organization, argue that China's rise could come at the expense of American companies.
There is one thing they agree on: China is here to stay as a force in drug manufacturing.
