三生制药与辉瑞达成60亿美元交易：双抗药物市场重构，中国药企全球化突围

MoFo partner Chuan Sun was quoted in an article that explores the trend of Chinese innovative pharma companies' out-licensing deals.

Chuan noted that in today’s commercial environment, Chinese pharmaceutical companies must carefully time their negotiations in order to secure satisfactory upfront payments in BD deals. On the one hand, companies should evaluate whether their products are of exceptional quality, as high-quality assets typically command greater market value. On the other, they should consider their level of dependence on the product and the pressure they face during negotiations. If a company is in urgent need of funding or a weak bargaining position, the counterparty may leverage this to lower the offer price.

“In practice, this process involves a tactical negotiation game. If you’re facing serious financial constraints and have only completed two rounds of financing, then at the negotiating table, considering that MNCs review thousands of projects each year—each facing intense competition and strict evaluation criteria—your project may not receive much attention. In this scenario, the MNC typically holds the upper hand and can use its advantage to push prices down,” Chuan explained. He added that while large domestic pharmaceutical companies are generally well-funded and command higher upfront payments, each project is unique. Still, negotiations must take into account dynamic factors such as the company’s development stage, financial health, product quality, and market potential. The capabilities of the BD team or intermediaries are also crucial, as a strong BD team is often key to success.

In 2024, the total overseas assets of China’s top 100 multinationals reached RMB 12.37 trillion, with an average transnationality index of 17.37%. This reflects the importance and complexity of MNCs’ project evaluation processes.

Chuan further pointed out that for smaller biotech startups, negotiating with large multinational pharmaceutical groups often means being in a disadvantaged position—an unavoidable reality unless the product has exceptional appeal and can attract broad interest. Under financial pressure, companies may have no choice but to accept relatively harsh terms in order to survive. Some companies do find themselves in a weaker position at the negotiating table. Over the past decade, Chinese innovative companies have been working to develop high-performance, first-in-class products—many of which stand out. However, due to earlier factors, these products are often undervalued, leading to a situation where foreign buyers may go on a “shopping spree.”

“This trend is still growing—at the very least, it hasn’t slowed—which shows that buyers truly believe there are high-quality products in China, and they find the prices reasonable enough to invest in. It’s a two-way process. Whether your negotiating position improves ultimately depends on how strong your product is and whether your company is in urgent need of cash. If your company is financially sound and not reliant on the deal, then your bargaining position will naturally be stronger,” Chuan emphasized.

Read the full article.