Of the recurring themes that tend to circulate in the drug development discourse, China is a uniquely fascinating and polarizing subject. Perspectives vary tremendously, ranging from those who view China as an expansive opportunity of which we are just beginning to scratch the surface, to those who see China as the single largest single threat to the health and viability of the US and European biotechnology industries.
In this blog, I’d like to offer a perspective from the lens of a CEO of US small biotech company, in particular regarding early-stage clinical development in China. This builds on a number of themes covered in Arthur Tzianabos’ recent blog, Ex-US Clinical Trials: Tribulations, Preparations, and Expectations.
The dramatic shifts in biomedical innovation in China that have occurred over the past few years are no secret: China significantly outpaced the US by 17% in 2024 in Nature’s Index of leading scientific publications, while 49% of global BD&L deals in 2025 were transacted on Chinese-originated assets. Moreover, numerous recent notable transactions (Roche/Qyuns, GSK/Rapt, AZ/CSPC) included assets from China as key centerpieces, highlighting the quality and innovative nature of molecules emerging from the country.
On the one hand, the perception of China as a threat to the conventional biotech model is easy to understand – in terms of developing innovative therapies, they are – relatively speaking – a newer player in town. With these recent successes in hand, there’s no reason to doubt that many more differentiated, novel, and even first-in-class therapies may emerge from the territory and play the role of direct competitor to US-or European-originated drugs. Sitting in the large pharma or venture capital ‘buyer’ seat, molecules developed in China often have substantial human “proof of signal” datasets available well in advance of ex-China competitors.
But I’d raise that even as a small biotech, the framing of China solely as a threat is incredibly limiting – looked at from a different angle, China offers tremendous opportunity across myriad stages of the drug development process. While US/EU companies have long relied on China for chemistry, biology support, etc., opportunities across a broader stretch of the drug development cycle remain untapped, including early clinical trial enrollment and execution in China. Rather than undermining the global biotech industry, Peter Kolchinsky, a Managing Partner at RA Capital Management, offered the perspective that China could be a source for innovation and achieving human proof of concept, while other stages of drug development, such as the conducting of global registrational trials and local manufacturing, ultimately ensure the protection of global industry and drug access.
As the model for working with China expands beyond contract research and CDMO relationships, it important to remember that conducting synthetic chemistry in China is dramatically different to executing a clinical trial within China and within a Chinese patient population. As is the case whenever any experimental drug is dosed to anyone, ethical and risk/reward balance is paramount, and a China-focused clinical development strategy should similarly keep this top of mind.
There is an opportunity to develop a long-term, sustainable plan to bring new agents to the Chinese population, whether directly by the sponsor or via a relationship with an established Chinese partner. Big picture, at the core of our industry is a desire to improve the lives of people on a global scale by bringing forward drugs to the patients who need them. A strategy that opens the door to development within China works not only to benefit the drug developers, but the very same global patient population we are collectively working to benefit.
At a surface level, from a clinical development standpoint, China offers very clear and straightforward opportunities, including speed of patient enrollment and cost efficiencies, but a series of challenges lie below the surface:
Opportunity
Access to large patient populations
Rapid recruitment rate (enabling speed to data read-out)
Cost savings
Challenges
Dynamic regulatory process
Distinct background medications
Differences in patient reported outcomes (including AEs)
Trial execution oversight given geographical distance
Cultural differences
For those in a small biotech without a direct link to China, the hurdles to operating within the geography are that much more significant. With the resource constraints inherent to small biotech, a necessary priority is quality clinical trial management absent large on-the-ground infrastructure. While small biotech companies are used to contracting with global CROs to conduct clinical studies in countries where they do not have a physical presence, this type of arm’s length model is unlikely to work well in China. Despite the large accessible patient population, the competition from local Chinese biotech companies is intense, leaving small foreign biotech companies are at a significant disadvantage. Not only do western companies face heightened scrutiny, the potential PR ramifications of adverse events associated with a clinical study conducted by a foreign sponsor mean that not all Tier 1 hospitals in China are readily taking on these risks.
There’s no doubt that the environment in China is evolving rapidly and remains highly dynamic. The regulatory environment, for example, for bringing innovative therapies to patients in China has become dramatically easier and faster recently as the Chinese government has sought to stimulate biomedical innovation through smart regulatory reform. Of note, the IIT (Investigator-Initiated Trial) framework has been a significant accelerant for cell and gene therapies, as well as the new 30 working day regulatory review for innovative drugs that meet certain criteria.
Against this backdrop of regulatory innovation, the FDA is experiencing unprecedented turbulence amidst a high degree of personnel turnover, including Vinay Prasad’s (second) departure from FDA, as well as overall regulatory uncertainty (take Moderna’s efforts to gain approval for their flu vaccine as just one recent example). Additionally, the new harmonized European approval process (CTIS) and UK Health Authority timelines have deteriorated over recent years.
With these moving pieces in mind, it seems to me the question has turned on its head… Can high growth biotech afford not to be enrolling patients in China… And if not, how should we as small, non-Chinese companies be thinking about executing in China? Two existing models come to mind:
Establishing a local presence – although still relatively rare in small biotech, we have started to see a handful of companies establish wholly-owned subsidiaries in China (Candid Therapeutics, as one example). These companies are building local teams with the requisite CRO project management, medical monitoring, and physician engagement to succeed.
Co-development – a number of companies have executed deals with local Chinese biopharma companies granting them access to Chinese clinical development infrastructure in exchange for cash and co-development & commercialization rights within China.
While the first local presence approach offers some clear advantages in terms of close oversight and controlled management, there are fundamental challenges to this path as well. For one, there’s a real time and monetary cost to building out a team and infrastructure in a wholly new territory, particularly one so far removed physically from a company’s headquarters. Moreover, finding strong, local talent remains a huge barrier, with the vast majority of the top-tier candidates employed at established Chinese biopharmas or CROs.
Investors such as RA Capital and Hillhouse Investment Management are tackling this challenge head-on on behalf of their portfolio companies. RA Capital, in partnership with Qiming Venture Partners, has formed a joint venture called Swiftbridge, which is providing development infrastructure within China for its portfolio companies. Hillhouse has constructed a similar entity for a number of its companies, alongside a strategy to consolidate clinical development infrastructure in China through its roll-up acquisition of Emerald, Wuxi Clinical and Wuxi MedKey.
The second co-development approach solves a number of the access and know-how issues, but stakeholders have mixed perspectives on the value/cost associated with Chinese product rights. At present, particularly in the current political climate of escalating rhetoric emerging from Washington, these rights may be of limited current value, but the reality of the size of the Chinese patient pools, means that there is a fundamental risk to ceding such rights and potential future profits so early in the development cycle. In small biotech companies, we are used to weighing significant short vs long-term tradeoffs like this: is three-fold faster enrollment, and critical human data a year sooner, worth it? In many cases it will be, but it is important to recognize that finding the right Chinese co-development partner is a long, complex and highly time-consuming endeavor (12+ months for many deals).
Stepping back, neither approach offers a simple model for a small non-Chinese biotech company to bring new drug candidates to China, nor do we yet have the benefit of a well-trodden path that can be followed. There is however a massive unmet need of innovative companies looking to do exactly this and I am certain that we are going to see multiple ‘first movers’ over the next 12 months.
If you agree with me, I’d like to hear your ideas and work with you on building solutions that can benefit the entire ecosystem so patients across all geographies, including China, can benefit from the innovation that we are all spearheading.
