Global Drugmakers Eye More China Biotech Deals After Record Year

Chuan Sun, managing partner of Morrison Foerster’s Shanghai and Hong Kong offices, was quoted by Nikkei Asia on the evolving dynamics of cross-border biotech transactions involving Chinese companies.

Chuan noted that the rising value of licensing deals reflects a shift in the balance of power between Chinese biotech firms and global partners. "Quite a number of Chinese biotechs are probably no longer short of cash, meaning they are in a better position to negotiate," he told Nikkei Asia on the sidelines of the ChinaBio Partnering Forum Shanghai conference.

Drawing on his recent deal experience, Chuan highlighted how transaction outcomes have evolved in recent years. "We were able to get significantly better terms" in last year's transaction, he said.

He also pointed to a broader trend toward greater selectivity in the market. "It makes sense for sponsors to become a bit more selective, rather than rushing to get companies listed," said Sun.

Chuan further emphasized the importance of more rigorous diligence by investors and sponsors. "You obviously wanted to ask hard questions that they probably should have asked a few years ago," he said, "such as whether the science and technology are genuinely differentiated compared to competitors, whether there is a strong, experienced management team that can execute corporate strategies, and whether the development plan is actually credible."

These observations reflect a maturing Chinese biotech sector, with companies better positioned to negotiate and stakeholders taking a more disciplined approach to transactions and investments.

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