August 13, 2025 • 33 mins
Dealmaking between Western and Chinese biopharmas has been one of the year’s bright spots, as a maturing biotech landscape in China converges with Western demand for innovative assets, driving record deal flow. At the same time, the Hong Kong stock exchange has emerged as the hottest market for biotech IPOs, at a time when the NASDAQ window remains shut.
These themes will be in the spotlight at the 12th BioCentury-BayHelix China Healthcare Summit Oct. 22-24 in Shanghai. On this special edition of the BioCentury This Week podcast, a trio of biopharma leaders join BioCentury’s analysts to discuss the landscape: McKinsey's Franck Le Deu, former BD executive Ji Li, and HBM Holdings' Mike Patten.
BioCentury, BayHelix and Insights Partner McKinsey & Company invite you to visit Shanghai for the 12th China Healthcare Summit at the St. Regis Shanghai Jingan. For more information, click here; to apply to join the 2025 Class of Presenting Companies click here.
View full story: https://www.biocentury.com/article/656773
#ChinaBiotech #CrossBorderDeals #HongKongIPO #BiotechInvesting #LifeSciencesFinance
00:00 - Introduction
02:09 – Key Trends
06:03 – View from McKinsey
13:36 – Evolution of Deal Landscape
20:24 – Learning from China
24:00 – China-China M&A & NewCos
To submit a question to BioCentury’s editors, email the BioCentury This Week team at podcasts@biocentury.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
[ AI-generated transcript ]
Jeff Cranmer (00:01):
Dealmaking between Western and China
biotechs has been one ofthe bright spots of 2025.
As the maturing biotechlandscape in China converges
with Western demand forinnovative assets leading
to record deal flow.
At the same time, the HongKong stock exchange has become
(00:22):
the hottest market for thebiotech sector at a time when
the IPO window remains shut.
On Nasdaq, the themes of China'sburgeoning biotech innovation,
deal making strategies, andgreen shoots of financing are
central to what we here atBioCentury, and at McKinsey And
(00:43):
at BayHelix will be discussing,with, friends, colleagues, VCs.
top deal makers from theWest and East on stage in
the hallways and at thenetworking receptions of the
BioCentury BayHelix ChinaHealthcare Summit this October.
And McKinsey once again willbe our Insights Partner.
(01:07):
On today's BioCentury thisweek podcast, we've invited
a few, uh, special gueststo join us to talk about.
How China is.
Well, China's hot at the moment.
Joining me are Franck Le Deu,a senior partner at McKinsey,
where he co-leads the firm'sAsia healthcare practice.
(01:28):
Ji Li, a former top BD executiveat Biopharma, such as Merck in
Beijing, now known as B one.
G is now a consultanton cross border deals.
And we also have MikePatten, the, recently
installed Chief StrategyOfficer at Harbour BioMed.
(01:48):
Mike, was formerly thehead of equity and venture
capital at BMS, and fromthe BioCentury side, we're
joined by Josh Berlin.
He's the head of BD forBioCentury and VP and Editor in
Chief Simone Fishburn, who ofcourse is something of a fixture
on both of our podcasts Okay.
(02:09):
I'd like to bring inSimone now to kick us off.
Simone, you just completedan analysis of nearly
200 East West deals.
we will be digging into thatin a bit, but I wanted to ask
you upfront, what are some ofthe key trends that you saw
while doing that analysis?
Simone Fishburn (02:25):
Thank you Jeff.
and really what funto be on this podcast.
I'm not talking tennis today,which most of our people know
is, is a recurring feature,but I will say there are some
really good Chinese tennisplayers coming through.
But anyway, moving on to deals.
Right.
Well, the reason we didthis analysis is that.
(02:46):
You know, it's sort ofaxiomatic now that China is
really a source of innovation.
And so what we really wantedto do was to dig into the
details underlying it andwho's buying what and how much.
I'm just gonna give youthree highlights that I, I
want people to think about.
So for us and many peoplewho read it, one of the big
(03:10):
surprises is the numbersof Western biotechs rather
than MNCs doing dealswith China licensors.
So it's well known thatthe MNCs, the pharmas, have
been out shopping for deals.
But actually two thirds of thedeal volume with China license
source, was to western biotechs.
(03:33):
And I thought that wasreally interesting.
So that's a new dynamic thatis, is reshaping, I think,
global bd, not a big surprisefile under, not a big surprise.
The second thing, and that isthe increase in number of deals.
This is going backto the start of.
2023. Okay.
But the increase in numberof deals in immunity and
(03:54):
inflammation and morerecently in obesity.
And why is thatnot a big surprise?
Because anybody, Franck, I knowyou're gonna talk about this,
anybody who's been watchingChina knows if there's a hot
area they're gonna go in andthey are gonna get in fast and
they are going to, you know,you're gonna see tremendous
value created for all thereasons we are gonna go into.
(04:14):
and I want to point outthat those obesity deals.
We're mostly north of $2billion in total deal value.
So these are notnickel and dime deals.
Right.
And the third one I'm gonnafile under, not a surprise for
us, but maybe a little bit ofa surprise for some people.
(04:35):
Who still continue to believethat China is a sort of
fast follower environment,the proportion of first in
class assets in those deals.
So first, what we callfirst order innovation
is coming from China.
Anybody who thinks that that isnot happening head in the sand.
So about 40% of thedeals that disclosed to
(04:57):
target were potentialfirst in class products.
The biggest group was newmodalities, which means
people, for example, taking anew, like a bispecific or an
ADC to create a therapy thatwould be better than something
where there's, let's say, a, amonoclonal or a small molecule.
But the last thing I wannasay is it does not stop there.
(05:19):
A substantial number ofthe first in class assets
were novel targets.
And this is something I'm quiteoften asked, like, yeah, yeah,
there's innovation, but dothey really, you know, explore
new biology and new targets?
And the answer is yes.
And so China, I think it'snot so much a questioning of
the biology, but a questionof the risk appetite.
(05:41):
And so what we see is thatChina innovators are willing
to take risks on new targets,and so are their licensees, the
people they're partnering with.
So I'm gonna stop there, Jeff.
Those are my three, um, threetake homes, if that's
Jeff Cranmer (05:55):
Excellent.
And we'll, we'll tuck into someof the numbers and, other, uh,
ways in which you slice and dicethose data, in a little bit.
But I wanna bring inFranck now, Franck.
Is a, frequent guest onthe podcast, and, he, has
been instrumental in helpingus put on several of our
conferences the years.
And, uh, if you follow hisLinkedIn, you'll know that He
(06:17):
has been, uh, picking apartthe different deals that he is
seeing, it almost feels like,uh, every day at this point.
And so, Franck, I, I'd justlike to ask you from your
perspective, what are youseeing in terms of what's
going on with these EastWest deals in particular
with, the larger companiesfrom the West, the MNCs.
Franck Le Deu (06:36):
Sure, Jeff, uh, Jeff and, and more the
team here on, on the podcast.
Thanks for having me again.
Always a pleasure tojoin you guys and share
some of my thoughts.
I think first maybe it's,it's helpful maybe to, uh,
to step back a little bit.
I know, that Simone talkedabout this new trend in 2025,
or at least accelerating trend,I guess, and I, I know that.
JP Morgan this year was a wakeup call for many people in
(06:59):
the industry, but for us andwho've been following this for
a decade now, this wasn't farfrom being a surprise, right?
We actually have seenheavy interest from some
multinationals for quitesome time now in China.
I think what has changedis that this interest
is now broad based.
Like all top 20 or top25 multinationals are now
(07:20):
showing interest in sourcing.
Innovation from China andactually morely from Asia and
talk about it and are takingaction behind it, putting goods
on the ground specifically.
in Mainland China.
But we also see, as you saidearlier, uh, Simone, a lot
of biotech companies aretrying to take advantage
of the opportunity.
If we step back.
This is driven really by, Iguess converging, converging
(07:42):
trends, that are perfect matchOn one hand, multinationals and
biotech are clearly looking forways to, enrich their pipelines.
We know that there's asignificant, uh, patent expiry
cliff, uh, coming up in 2020.
I think by some estimate,over $200 billion of
revenues will disappear.
So that creates a need forcompanies to transform their
(08:05):
R&D engine, including planningmore sources of innovation,
clearly as well, geopolitics.
We won't talk much aboutgeopolitics today, but
even though it's hanging inthe background, it hasn't
yet, deterred companiesfrom taking action, right?
They still see a path toactually sourcing innovation
from China and even thecurrent, uh, US China context.
(08:25):
also, quite frankly, thetrack record of the first
deals in between 23, 24, evenbefore that, has given more
confidence to some of theearlier player that there
was something real in China.
And I, I would say that, to someextent, a, a fear of missing
out are starting to creep in, inthe rest of the multinationals.
And as well a few successstories, for biotech
(08:45):
companies has created, anurge for a broader set of
biotech to jump in, right.
And make sure that theydon't miss something.
And then let's not forget on thelocal side, there's an urgent,
acute need to find partners.
And yes, the Hong KongExchange is better.
but frankly crashed.
So it's just a recoveryfrom a low point.
Yes.
The IPO window is, openagain, which is great, but
(09:08):
local companies are stillstruggling to find means to
support their development.
And for them, the stream ofrevenues they can get from
upfront payment, in particularin deal making is vital.
The, the Chinese market forinnovation itself, while it's
growing, is still not at thescale that you would need
to support a full innovationecosystem of local companies.
(09:29):
Pricing is is an issue still.
competition is cutthroat.
It is very expensive tocompete in China, which means
that only at scale companiescan take advantage of that.
So that's the context.
Then what do we see and whydo we believe this is actually
a trend that will reshape theglobal biopharma industry?
We see six reasons actually.
And my colleague in our Chinapractice just released a report
(09:50):
on that, that, I will justgive you a takeaway first.
I think as Simone shown,this is way beyond oncology.
This is expanding intonew therapeutic areas,
metabolism, neurology,immunology, et cetera.
Two, it is beyond ADCs andMABs like, you know, people
talked a lot about the ADCpower of China, but this
is actually going now intonext generation platforms,
(10:12):
cell engine therapies,RNA therapies, radioligand
therapies, et cetera.
So way beyond ADCs.
It is also beyond fastfollowing, and we start to
see the cultivation of novelbiological discoveries.
China is catching up withGermany and Japan, for example,
on the number of high qualityresearch papers that are seated
(10:32):
in the top tier journals.
We believe that there is apotential for first in class
assets to come from China,not today, August 13th, 2025,
but certainly in the nearfuture beyond labor cost.
China R&D is just faster,and as you know, speed in
R&D is extremely important.
Why is China faster?
We looked into the topic.
(10:53):
We think that they havere-engineered basically
end-to-end, how to develop drugsfrom discovery to, clinics.
And they do that in avery systematic, way.
they leverage a very agileclinical research ecosystem that
has no equivalent in the world.
And also they apply a focusedexecution mindset, but is
also quite unique if youthink about their work ethics.
(11:17):
the ability to reallymobilize beyond clear goals.
two more points.
I.
Simone F (11:21):
Franck, lemme jump in.
to ask you and theother panelists this.
we know about the energy inChina and the commitment, but I
wanted to know couple of things.
One is how much do you thinkthis is a feature, the deal
making, the success of theability to go very fast into the
clinic, and how much of a sortof leg up does that provide?
(11:43):
China researchers?
Over their counterpartsin the west.
and then the other questionis this, there's sort of.
This notion that I'veheard that there was a lot
of money that went in in1919, sorry, wrong century.
Um, 2020.
um, this is sort of eeverybody, you all may
wanna respond to this.
A lot of money went in,in, in 2019, 2020, 2021.
(12:07):
Created a lot of new companiesand now we're actually starting
to see the fruits of that moneyin these companies bringing.
assets and programsthat can be partnered.
So who wants to pick that up?
But I don't, I don't know,Franck, if you've got a
response and then maybe I've,I've ruined your plan, Jeff.
I know,
Franck Le Deu (12:24):
No, no, no, no worries.
I was just like going to quicklytouch on, I got your point.
I probably went over a littlebit, but on point of number
five, clinical trial, Chinais expanding beyond China.
Right?
And that's very importantto, to make the assets more
attractive for global partners.
And also beyond the bench, Chinais scaling robotics and AI.
We probably wont talk about thattoday and to your two questions.
(12:45):
I think the speed is thename of a game, right?
when assets actually havelimited differentiation.
When China is able to bringassets that are really
competitive on many aspectsof their clinical profile, the
speed is the name of the game.
We believe that the speedof China means that.
unlike what we have seen in thepast where you need, basically
need to be in the top threeto reach a market for any
(13:05):
new, new type of, drug class.
And maybe the speed of Chinawill allow more competitors
to join the market.
And we may be seeing that inmetabolic already, for example.
And we saw it in PD-1, on thematuration of the pipeline
of companies that werecreated a few years back.
I think that's both right.
And, but we also seecompanies that were set up
very, very recently actuallycome up with interesting.
Assets that are also available.
(13:27):
And there's also a large numberof companies who actually have
failed in virtualize ecosystem.
We, we talk less aboutthose ones, but there
are some as well.
Right?
It's not all success.
Ji Li (13:35):
so Franck, just to follow up regarding the,
the speed of China, right.
So, so that generated twogeneral responses from different
categories of company inthe multinational circle.
There's a belief that,they pretty much give up
to do anything internally.
If something get published ina paper you know, if, if they
(13:55):
wait for the internal bureaucratsystem to get this up and
running, the joke was, you know,you go to China, they give you
a clinical candidate already.
So they pretty much, resignedto the fact that you go to
China to find these things.
But on the other side of theecosystem, the earlier stage,
central capital incubatingnew company, it generate fear.
(14:16):
Because they do not want todisclose what they're working
on, knowing once that becomethe public domain, they will be
swamped by dozens of, you know,projects that go past them.
So that's a really interesting,effect that have, my,
observation in, in the last,I would say year or two.
(14:38):
it, it's become very obvious.
It is indispensable for Chinato be part of our ecosystem.
Right?
but that thing has evolvedin the last, I would
say, six to 12 months.
What you can see is beside thebiopharma biotech that you've
seen that has been fundedin the last five, 10 years,
the major domestic farmer inChina has entered the fray.
(15:01):
And these people aremuch more well financed.
Much more capable in termsof clinical development.
So all of a sudden they'regenerating Post-POC or
even later stage programthat has created fierce
competition among the MNC.
Try to acquire theseprogram, try to fill their
late stage pipeline gap.
And that is something, reallybecome competitive in the
(15:24):
late stage deal making.
In contrary in the earlystage where, you know, we
talk about a lot of the newcodes and VC backed, uh, uh,
biotech, those remain prettymuch in the favor of the
buyer, if you will, becausethere are hundreds of company
competing in the same space.
You really need tobe standing out.
(15:45):
To be, a winner like whatHarbour has done recently.
Right.
so it is become atwo different trend.
I see.
They're both competitive.
I think in the late stage.
Some of the program hasgenerated or command,
very little discount.
I would argue they, they'restarting to generate premium
while in the early stage youcan still find bargain you
(16:06):
know, at a discount if you will.
Josh Berlin (16:08):
Ji, this is Josh.
Maybe I'll, I'll jump in also.
And, and Mike, I, Iwanted to sort of turn the
conversation to you as well.
'cause, you know, one of thethings I think we're seeing is,
um, also a move to, strategiccollaborations as well.
there's been a, a, a couple ofreally high profile, examples
of that, and I think one of theearlier ones, I saying early,
(16:29):
but only five months ago.
That's, I guess,China speed for you.
But I thought, um, you know,one of the earlier, ones,
at least this year thatsort of pointed towards, a
strategic collaboration wasthat deal you guys did with.
With AstraZeneca, back in,in March, I believe it was.
So, can you tell us a littlebit about that deal and what
the thinking was for Harbourand, and how you see that,
evolving, in the, uh, youknow, are, we're gonna see
(16:50):
more of these sort of strategiccollaborations, in other words.
Mike Patten (16:53):
Absolutely.
Yeah.
thank you.
Thank you Josh andthe BioCentury team.
It's a pleasure to join youtoday and, and indeed, you
know, this is really excitingtimes at at Harbour as you
know, as you've highlightedin the discussion, but also
in your, your recent analysis.
And, yeah, I mean, I thinkAstraZeneca, our, you
know, our collaborationwith AstraZeneca is.
Exciting obviously for Harbour,but it's also significant for
(17:16):
the region, you know, fivemonths ago and really being
the first major collaborationof its type in being a, you
know, multi-program, multi-yearresearch collaboration
focused on the discoveryof the next generation
multispecifics, focused onalso oncology and immunology.
In terms of the structure ofthe deal, this is five year
(17:36):
initial, term with the optionto extend by another five
years, and also included asignificant equity investment of
over a hundred million dollars.
So really representingsignificant commitment to the
relationship and also the futureof of Harbour by AstraZeneca.
You mentioned this was,you know, five months ago.
and really that was sort ofthe marker of deals to come
(17:59):
and, and really as we're seeingis, just been the beginning
of significant collaborations,not just for Harbour, but
also for peers in our region.
And as, mentioned by, Franckand Ji, I think, you know,
I think Ji mentioned aboutChina speed that we're seeing
a rapid evolution of, of thesedeals and the collaborations
as those groups are reallysophisticated in, in deal
(18:20):
making and looking at how theregion can really support, you
know, Western development and,and other regions that I think
we're going to see, aspectsof the stage of the deals
as we talked about clinical.
research and how Chinaand, working in China
can help leverage that.
And I think we'll see moreand more of that being a key
component of collaborationsgoing forward and that we
(18:43):
will really see a real shiftaway from these transactional
one asset programs tomulti-asset collaborations
as we go forwaR&D.
And so I, I expect thatwhen we meet again in
a year's time, we'll betalking about completely
different, deal structures.
Simone Fishburn (18:57):
So Mike, that is interesting one of the
things that we found when welooked to this analysis as,
as Jeff said, it turned outthat there were 198 deals.
Right now, about 90% of themwere focused on products.
They may be multiple productsfocused on products, but a
growing trend is actuallypartnering to, what we
(19:17):
call enabling technologies.
So you might go license anantibody in order to make an
ADC we are starting to see muchmore different kinds of deals
than exactly what you said.
Not just go and in, get theasset go home kind of thing.
Actually, I have a kindof a question for you all.
You know what we hear hereall the time, we hear from
VCs and we hear from pharmas.
(19:39):
I'm spending much more timeon the ground in China.
So in China, are there VCs ofpharmas like walking around
notably much more than before?
Is it, is it somethingpalpable that you see, is
there that kind of energywalking around an interest, you
know, when you did your deal,was there a lot of inbound.
Mike Patten (19:58):
I think absolutely.
I think, I think everybody is,has some, some presence in China
and I think, certainly from.
my experience, I think you'reseeing that companies who don't
have an established footprintin China are finding out very
quickly that they need tohave that to be successful.
I'm sure Ji, and and Franckhave have observations
on that as well.
Simone Fishburn (20:19):
Or they need to come to conference.
Franck Le Deu (20:23):
It's very clear Simone, and know,
uh, being in our positionin China know we, we, get.
Request frequently fromsome of our clients or non
clients who ask us, okay,what's the best way to
set up a BD team in China?
and we see as well manyof our colleagues or
ex-colleagues being actuallypoached or approached to to
fill this type of position.
We also see almost on a weeklybasis, some of the bigger
(20:44):
names hold, annual biotechconference in China where
they actually, you know, bringtogether the network of biotechs
and present what they do as acompany, what they want to do.
Which is, as youmentioned, beyond just
sourcing particular asset.
It's now about sourcingtechnology and also the
next frontier I thinkis about partnering to
(21:04):
actually impact the way thebig pharma works in R&D.
I think there's a lot ofinterest for some of the global
health R&D worldwide to figureout what is it exactly that
China has as a secret saucethat could help transform the
global R&D organization, whichare often seen as a little
bit bloated, inefficient.
And maybe in need of aninjection of China speed.
(21:25):
And that I think to me, isone of the most interesting
topic that will playout in the few years.
Ji Li (21:30):
just to follow up in terms of the, on the ground,
I'm sure Franck can tellyou, I mean, the joke is
if, if a particular week, ifthere's not an MNC in town in
Shanghai, something is wrong.
That was a joke.
So they go through everyweek and plus all kinds of
local partnering conference.
So, so it's really a superactive, scenes there.
(21:51):
But getting back to,regarding, technology or
platform collaboration.
I think if you look at someof the newly emerged platform,
Next generation RNAi, invivo CAR T, you name it.
You know, these are thingsactually that Chinese
biotech are at the forefront.
the gap between them and the,the western counterparts are,
(22:12):
you know, I think narrowingor even in many cases,
they're leading, you know,in the case of in vivo CAR,
I'm sure you guys saw that.
so I think, the ecosystemwill continually evolve and,
uh, I wouldn't be surprised,like Simone said earlier,
the truly first in classasset will emerge and more
and more as we go forward.
Josh Berlin (22:31):
So, Ji, let, let me ask you this.
Um, you know, you're, you'redealing with, you know, a lot of
clients, you're, you're involvedin a lot of negotiations
with deals ones, we'veseen the press releases on.
Sure there are a bunchof others that didn't
come, come to fruition.
But how are you seeing, um, thedeal terms, evolving over time?
You know, as the demandhas, continued to increase
(22:52):
for, finding, assets,de-risked assets in China,
you know, is that leadingto to China biotechs being
able to get better terms?
Are there, are therethings you're seeing.
in the negotiations that are,you know, maybe different
now versus, versus a year agoor six months ago in terms
of leverage on deal terms.
Ji Li (23:10):
Yeah, no.
as I said earlier, especiallythe sort of late clinical
stage assets are very rare.
oftentimes, the Chinesebiopharma will be able
to bring us assets with.
Is hundreds if not thousandsof patient experience.
You just don't see that anymore.
most of the small biotechin the western part of world
(23:31):
couldn't quite deliver thatsort of a data package.
Therefore, that gave us a lotof leverage in the negotiation.
In terms of not just, you know,the pure cash up front, but
also the whole package, right?
Oftentimes involve moreparticipation and equity,
et cetera, et cetera.
So I think, these late stageassets become increasingly
(23:51):
competitive for the MNCs.
And, they all openly talk aboutthere's no more China discount.
Josh Berlin (23:58):
Yeah.
one more trend.
You know, Franck,Jeff plugged your, uh.
Your LinkedIn site earlier,which I agree is, is one that
folks should be, following.
But, um, you know, there wasa, a, a deal recently that you
commented on that, uh, we werealso sort of kicking around
at BioCentury, which was, thetakeout of, the China biotech
LaNova by, Sino Biopharma.
You know, historically therehasn't been a whole lot of M&A
(24:21):
within in the China market.
And here, you know, is a, Ithink a great example of, um,
more traditional China pharma.
acquiring a China biotech, isthat, is that something you guys
are expecting to see more of?
Is, is that somethingMcKinsey's been following?
Franck Le Deu (24:35):
it was not a surprise to us to see that
type of deal finally comethrough because, I mean, I can
be corrected by Mike, Ji, orSimone, but I think this was
actually the first sizable,China-China deal, right?
Uh, as an M&A, I think it'swelcome by the industry because
it offers another exit forthe biotech entrepreneur.
some of those large traditionalChinese pharma companies
(24:56):
have very deep pocket.
Many of them are in the processof transitioning from largely,
largely generic businesses toinnovation businesses, whether
they are state on enterprisesor private companies like for
example, Hengrui, which isone of the most active name
and probably ahead of manyother companies in terms of
making that transformationtowards innovation.
So, no, it's not a surpriseand it's a welcome, a welcome
(25:18):
addition, I guess, to the,ecosystem because we do need
a capital market that works.
We do need an m and a marketthat works, and this cannot
just be a channel to the west.
There also needs to bea, a healthy channel to
China, ecosystem emergingin terms of transactions.
Ji Li (25:34):
Actually for the longest time you, you
don't see much M&A, withinthe domestic, ecosystem.
And just simply becausethe traditional pharma has
really hard time to valuethese early stage assets.
If you have something veryclose to the market, they
can tell you what wouldbe the market penetration.
Their, they can give youa good, sales forecast.
But for these early stagestuff, they, typically struggle.
(25:57):
So that's
Simone Fishburn (25:57):
gee, they've been doing, they've been doing
early stage deals with westernbiotechs forever, so they do
know how to put a value on them.
They may have a different riskprofile or something depending
on, I don't know, geopolitics.
But, they've been doinga lot of early stage
deals for a long while.
Ji Li (26:16):
Um, you know, many of these probably are early
technology and stuff like thatin terms of like pipeline.
if you ask the domesticpharma today, they're most.
Looking for close tomarket stage, you know,
opportunity X China.
so that's why this dealis very significant.
and also it's more significantin light of the very, very hot
(26:37):
Hong Kong stock exchange, right?
Because, a company like,you know, but they do have
the other paths for exit andthey chose to be acquired
by a domestic farmer.
Josh Berlin (26:47):
One, you know, one, one other, hot topic obviously
that we haven't talked aboutyet is, is sort of the NewCo
model and, the NewCo deal flow.
love to hear yourguys' thoughts on that.
Mike, I know you guys wereinvolved in the Windward
deal, for instance.
You any, sort of insights onwhat people should think about
in terms of, opportunities forNewCos versus licensing deal.
Mike Patten (27:07):
Yeah.
No, we were very excited tobe part of, of Windward and
to, to see that company grow.
the opportunities there.
I mean, I think, I think there'sstill opportunities for NewCos.
I think as you, you'vehighlighted it in your
analysis, obviously the marketis, changing again quickly.
And so the opportunitiesfor groups who would
back, NewCos are changing.
And, and I think that's.
(27:27):
Also an opportunity forHarbour and we're, you know,
we're speaking with groupsto really think about what's
the next phase for NewCos.
I think there's still anopportunity there and it's
really, completes the circleof the conversation is really
that with China biotech,there's a lot of opportunities
for flexible deal structures,a lot of synergistic ways of
working with venture biotechall over to really ensure that
(27:50):
we're progressing innovativetherapies for patients.
And so I think that you'llstill see them, but the nature
of those NewCos will, willbe changing in terms of how.
the underlying deal structureof maybe licensing the
stage that they happen.
And as we've also talkedabout how the nature of
those collaborations andthe involvement potentially
(28:11):
of the Chinese biotech orAsian biotech will be is
that NewCo matures as well.
so that's I think a, aninteresting space, uh, to
watch and, and hopefullywe'll have some more news
from Harbour in the coming,in the coming months.
Ji Li (28:23):
the other new phenomena in recent, because
of . The Hong Kong stockexchange performance.
Many of the China privatebiotech are trying to go public.
as Franck know, thereis a strict, you know,
guideline in terms of whatthey need to do to qualify.
So therefore, that's startingto affect if they would do a
partnership to give away theirlead asset because they need
(28:43):
to have like a phase two asset.
you know, so sometime theywill say, Hey, we need to
keep our lead asset becausewe're qualified to go public.
So that becomes, you know,whether that's a NewCo or
a, a regular partnershipthat's starting to have an
effect on, you know, themanagement and, and, and
board of these company whenthey think about partnership.
So it'll be interestingto see how this evolve.
Jeff Cranmer (29:05):
Yeah, it's, been a great year
for IPOs in Hong Kong.
there's also been someactivity in Korea, and I
think together they outstrip.
what's been happening onNasdaq and how's, how's
the environment for followon financing in Hong Kong?
Ji..
Ji Li (29:19):
Well, that's an interesting thing.
You know, Franck, maybe you havemore data point in that regard
when you guys do your analysis.
I think as you said,this is coming out of a
multi-year goal, right?
I don't know where is theexpectation is when these
follow up financing startedto happen because, you know,
many of the stock, I look atit this year, they not only,
(29:40):
double, they triple, theyquadruple from their loan.
So, you know, at some point Iwould think they will leverage
the market to, to put in some,uh, money from the market.
Yeah.
Franck Le Deu (29:50):
Yeah, no, we don't have data yet.
We, our team is stillworking on the report.
We'll present in, inShanghai end of October.
So you have to be at theSummit, I guess, too.
It an answer to that question.
Jeff Cranmer (30:01):
Excellent.
Simone Fishburn (30:01):
a layout for you that.
Jeff.
Jeff Cranmer (30:03):
That's a layup for me.
I mean, uh, gosh.
Uh, this has been a lot of fun.
Um, I, I would justlike to say, uh.
There's still time toregister for the conference.
it kicks off on October 22ndand it runs until the 24th.
If you can't make it toShanghai, you can register
to attend digitally.
head to BioCentury Chinato register and learn
(30:26):
more about the program.
I am still recruiting,presenting companies.
We'd love to.
get some companies from theU.S., from Europe, from Canada,
out to see firsthand what'sgoing on, and we pride ourselves
on having the right people inthe room at our conferences.
And it'd be a great place totalk deals, to talk financings
(30:48):
and, you know, you get to meetJosh and talk tennis with Simone
on top of everything else.
And, and Josh didn't we justadd a, pre-event networking.
Josh Berlin (30:58):
that's right.
Jeff Cranmer (30:58):
what, what, what is that?
It's like visiting some kind ofcool research park, isn't it?
Josh Berlin (31:03):
we will, yes.
So on the first day we're gonna,our first morning before the
the conference starts, we'regonna take a, uh, a bus tour
of Zhangjiang Park, which istop science, the technology
park there in Shanghai.
you know, we're big believersin, you gotta see it.
I, think you really have to see.
what's happening in China?
See the scale.
See how, so many differentcompanies, from MNCs to China,
(31:24):
biotechs to CDMOs, are alllocated there in the park.
So, that's a benefitof, attending the event.
And, as, Franck also alludedto, you know, McKinsey, which
is our longtime insightspartner, will be releasing
its conference report.
You know, always a lotof data that folks like
to get their hands on.
So that'll also be a, akey feature of the event.
(31:45):
And, you know, lots of.
Networking and, andopportunities for partnering
and learning as well.
So we hope to see you out in,uh, Shanghai, October 22 to 24.
Jeff Cranmer (31:55):
Excellent and lot, lots of VCs will be there.
And this year, Josh, right?
And, quite a fewPharma, BD and L people.
Josh Berlin (32:01):
We have, an unbelievable, amount of, uh,
Western, VCs and biopharmaexecs coming out this year.
And then, uh, as always,sort of a who's who of China
biotech, VCs and, and CEOsand, all the MNCs, the, the
big pharma will be there bothat the BD&L level as well as
the, uh, the China GM level.
Jeff Cranmer (32:21):
Excellent.
Well, I think this is a,a great point to thank our
guests and, uh, sign off.
Mike, I wanted to mention thatwe recently did an analysis,
Kind of off the back ofSimone's analysis that looked
at who are the top, dealmakers and Harbour was number
one the China biotech side.
And, and, uh, wasit AstraZeneca?
(32:42):
Simone, that was,uh, number one.
Yeah.
Ji shaking his
Simone Fishburn (32:45):
AstraZeneca by some way, but I actually,
in terms of the licensees,of course, GSK was second.
I actually wannamake the point there.
BioNTech have also donea whole bunch of deals.
So they're not a pharma, butthey dealing like a pharma.
I gotta tell you.
Jeff Cranmer (32:59):
And Biocytogen, again, on the China
side, very, very active.
Well, Mike, Franck, Jithank you so much for
sharing your insights.
Franck.
Looking forward to the report.
definitely.
Uh.
Put an extra pot of coffeeon for, uh, Fangning
and Josie and the team.
And, Ji uh, hope to talk soon.
(33:20):
And as always, Simone Josh.
thanks for joining.
And a special thanks to,Kendall Square Orchestra,
which provides the music forall of BioCentury podcasts.
[ AI-generated transcript ]
Jeff Cranmer (00:01):
Dealmaking between Western and China
biotechs has been one ofthe bright spots of 2025.
As the maturing biotechlandscape in China converges
with Western demand forinnovative assets leading
to record deal flow.
At the same time, the HongKong stock exchange has become
(00:22):
the hottest market for thebiotech sector at a time when
the IPO window remains shut.
On Nasdaq, the themes of China'sburgeoning biotech innovation,
deal making strategies, andgreen shoots of financing are
central to what we here atBioCentury, and at McKinsey And
(00:43):
at BayHelix will be discussing,with, friends, colleagues, VCs.
top deal makers from theWest and East on stage in
the hallways and at thenetworking receptions of the
BioCentury BayHelix ChinaHealthcare Summit this October.
And McKinsey once again willbe our Insights Partner.
(01:07):
On today's BioCentury thisweek podcast, we've invited
a few, uh, special gueststo join us to talk about.
How China is.
Well, China's hot at the moment.
Joining me are Franck Le Deu,a senior partner at McKinsey,
where he co-leads the firm'sAsia healthcare practice.
(01:28):
Ji Li, a former top BD executiveat Biopharma, such as Merck in
Beijing, now known as B one.
G is now a consultanton cross border deals.
And we also have MikePatten, the, recently
installed Chief StrategyOfficer at Harbour BioMed.
(01:48):
Mike, was formerly thehead of equity and venture
capital at BMS, and fromthe BioCentury side, we're
joined by Josh Berlin.
He's the head of BD forBioCentury and VP and Editor in
Chief Simone Fishburn, who ofcourse is something of a fixture
on both of our podcasts Okay.
(02:09):
I'd like to bring inSimone now to kick us off.
Simone, you just completedan analysis of nearly
200 East West deals.
we will be digging into thatin a bit, but I wanted to ask
you upfront, what are some ofthe key trends that you saw
while doing that analysis?
Simone Fishburn (02:25):
Thank you Jeff.
and really what funto be on this podcast.
I'm not talking tennis today,which most of our people know
is, is a recurring feature,but I will say there are some
really good Chinese tennisplayers coming through.
But anyway, moving on to deals.
Right.
Well, the reason we didthis analysis is that.
(02:46):
You know, it's sort ofaxiomatic now that China is
really a source of innovation.
And so what we really wantedto do was to dig into the
details underlying it andwho's buying what and how much.
I'm just gonna give youthree highlights that I, I
want people to think about.
So for us and many peoplewho read it, one of the big
(03:10):
surprises is the numbersof Western biotechs rather
than MNCs doing dealswith China licensors.
So it's well known thatthe MNCs, the pharmas, have
been out shopping for deals.
But actually two thirds of thedeal volume with China license
source, was to western biotechs.
(03:33):
And I thought that wasreally interesting.
So that's a new dynamic thatis, is reshaping, I think,
global bd, not a big surprisefile under, not a big surprise.
The second thing, and that isthe increase in number of deals.
This is going backto the start of.
2023. Okay.
But the increase in numberof deals in immunity and
(03:54):
inflammation and morerecently in obesity.
And why is thatnot a big surprise?
Because anybody, Franck, I knowyou're gonna talk about this,
anybody who's been watchingChina knows if there's a hot
area they're gonna go in andthey are gonna get in fast and
they are going to, you know,you're gonna see tremendous
value created for all thereasons we are gonna go into.
(04:14):
and I want to point outthat those obesity deals.
We're mostly north of $2billion in total deal value.
So these are notnickel and dime deals.
Right.
And the third one I'm gonnafile under, not a surprise for
us, but maybe a little bit ofa surprise for some people.
(04:35):
Who still continue to believethat China is a sort of
fast follower environment,the proportion of first in
class assets in those deals.
So first, what we callfirst order innovation
is coming from China.
Anybody who thinks that that isnot happening head in the sand.
So about 40% of thedeals that disclosed to
(04:57):
target were potentialfirst in class products.
The biggest group was newmodalities, which means
people, for example, taking anew, like a bispecific or an
ADC to create a therapy thatwould be better than something
where there's, let's say, a, amonoclonal or a small molecule.
But the last thing I wannasay is it does not stop there.
(05:19):
A substantial number ofthe first in class assets
were novel targets.
And this is something I'm quiteoften asked, like, yeah, yeah,
there's innovation, but dothey really, you know, explore
new biology and new targets?
And the answer is yes.
And so China, I think it'snot so much a questioning of
the biology, but a questionof the risk appetite.
(05:41):
And so what we see is thatChina innovators are willing
to take risks on new targets,and so are their licensees, the
people they're partnering with.
So I'm gonna stop there, Jeff.
Those are my three, um, threetake homes, if that's
Jeff Cranmer (05:55):
Excellent.
And we'll, we'll tuck into someof the numbers and, other, uh,
ways in which you slice and dicethose data, in a little bit.
But I wanna bring inFranck now, Franck.
Is a, frequent guest onthe podcast, and, he, has
been instrumental in helpingus put on several of our
conferences the years.
And, uh, if you follow hisLinkedIn, you'll know that He
(06:17):
has been, uh, picking apartthe different deals that he is
seeing, it almost feels like,uh, every day at this point.
And so, Franck, I, I'd justlike to ask you from your
perspective, what are youseeing in terms of what's
going on with these EastWest deals in particular
with, the larger companiesfrom the West, the MNCs.
Franck Le Deu (06:36):
Sure, Jeff, uh, Jeff and, and more the
team here on, on the podcast.
Thanks for having me again.
Always a pleasure tojoin you guys and share
some of my thoughts.
I think first maybe it's,it's helpful maybe to, uh,
to step back a little bit.
I know, that Simone talkedabout this new trend in 2025,
or at least accelerating trend,I guess, and I, I know that.
JP Morgan this year was a wakeup call for many people in
(06:59):
the industry, but for us andwho've been following this for
a decade now, this wasn't farfrom being a surprise, right?
We actually have seenheavy interest from some
multinationals for quitesome time now in China.
I think what has changedis that this interest
is now broad based.
Like all top 20 or top25 multinationals are now
(07:20):
showing interest in sourcing.
Innovation from China andactually morely from Asia and
talk about it and are takingaction behind it, putting goods
on the ground specifically.
in Mainland China.
But we also see, as you saidearlier, uh, Simone, a lot
of biotech companies aretrying to take advantage
of the opportunity.
If we step back.
This is driven really by, Iguess converging, converging
(07:42):
trends, that are perfect matchOn one hand, multinationals and
biotech are clearly looking forways to, enrich their pipelines.
We know that there's asignificant, uh, patent expiry
cliff, uh, coming up in 2020.
I think by some estimate,over $200 billion of
revenues will disappear.
So that creates a need forcompanies to transform their
(08:05):
R&D engine, including planningmore sources of innovation,
clearly as well, geopolitics.
We won't talk much aboutgeopolitics today, but
even though it's hanging inthe background, it hasn't
yet, deterred companiesfrom taking action, right?
They still see a path toactually sourcing innovation
from China and even thecurrent, uh, US China context.
(08:25):
also, quite frankly, thetrack record of the first
deals in between 23, 24, evenbefore that, has given more
confidence to some of theearlier player that there
was something real in China.
And I, I would say that, to someextent, a, a fear of missing
out are starting to creep in, inthe rest of the multinationals.
And as well a few successstories, for biotech
(08:45):
companies has created, anurge for a broader set of
biotech to jump in, right.
And make sure that theydon't miss something.
And then let's not forget on thelocal side, there's an urgent,
acute need to find partners.
And yes, the Hong KongExchange is better.
but frankly crashed.
So it's just a recoveryfrom a low point.
Yes.
The IPO window is, openagain, which is great, but
(09:08):
local companies are stillstruggling to find means to
support their development.
And for them, the stream ofrevenues they can get from
upfront payment, in particularin deal making is vital.
The, the Chinese market forinnovation itself, while it's
growing, is still not at thescale that you would need
to support a full innovationecosystem of local companies.
(09:29):
Pricing is is an issue still.
competition is cutthroat.
It is very expensive tocompete in China, which means
that only at scale companiescan take advantage of that.
So that's the context.
Then what do we see and whydo we believe this is actually
a trend that will reshape theglobal biopharma industry?
We see six reasons actually.
And my colleague in our Chinapractice just released a report
(09:50):
on that, that, I will justgive you a takeaway first.
I think as Simone shown,this is way beyond oncology.
This is expanding intonew therapeutic areas,
metabolism, neurology,immunology, et cetera.
Two, it is beyond ADCs andMABs like, you know, people
talked a lot about the ADCpower of China, but this
is actually going now intonext generation platforms,
(10:12):
cell engine therapies,RNA therapies, radioligand
therapies, et cetera.
So way beyond ADCs.
It is also beyond fastfollowing, and we start to
see the cultivation of novelbiological discoveries.
China is catching up withGermany and Japan, for example,
on the number of high qualityresearch papers that are seated
(10:32):
in the top tier journals.
We believe that there is apotential for first in class
assets to come from China,not today, August 13th, 2025,
but certainly in the nearfuture beyond labor cost.
China R&D is just faster,and as you know, speed in
R&D is extremely important.
Why is China faster?
We looked into the topic.
(10:53):
We think that they havere-engineered basically
end-to-end, how to develop drugsfrom discovery to, clinics.
And they do that in avery systematic, way.
they leverage a very agileclinical research ecosystem that
has no equivalent in the world.
And also they apply a focusedexecution mindset, but is
also quite unique if youthink about their work ethics.
(11:17):
the ability to reallymobilize beyond clear goals.
two more points.
I.
Simone F (11:21):
Franck, lemme jump in.
to ask you and theother panelists this.
we know about the energy inChina and the commitment, but I
wanted to know couple of things.
One is how much do you thinkthis is a feature, the deal
making, the success of theability to go very fast into the
clinic, and how much of a sortof leg up does that provide?
(11:43):
China researchers?
Over their counterpartsin the west.
and then the other questionis this, there's sort of.
This notion that I'veheard that there was a lot
of money that went in in1919, sorry, wrong century.
Um, 2020.
um, this is sort of eeverybody, you all may
wanna respond to this.
A lot of money went in,in, in 2019, 2020, 2021.
(12:07):
Created a lot of new companiesand now we're actually starting
to see the fruits of that moneyin these companies bringing.
assets and programsthat can be partnered.
So who wants to pick that up?
But I don't, I don't know,Franck, if you've got a
response and then maybe I've,I've ruined your plan, Jeff.
I know,
Franck Le Deu (12:24):
No, no, no, no worries.
I was just like going to quicklytouch on, I got your point.
I probably went over a littlebit, but on point of number
five, clinical trial, Chinais expanding beyond China.
Right?
And that's very importantto, to make the assets more
attractive for global partners.
And also beyond the bench, Chinais scaling robotics and AI.
We probably wont talk about thattoday and to your two questions.
(12:45):
I think the speed is thename of a game, right?
when assets actually havelimited differentiation.
When China is able to bringassets that are really
competitive on many aspectsof their clinical profile, the
speed is the name of the game.
We believe that the speedof China means that.
unlike what we have seen in thepast where you need, basically
need to be in the top threeto reach a market for any
(13:05):
new, new type of, drug class.
And maybe the speed of Chinawill allow more competitors
to join the market.
And we may be seeing that inmetabolic already, for example.
And we saw it in PD-1, on thematuration of the pipeline
of companies that werecreated a few years back.
I think that's both right.
And, but we also seecompanies that were set up
very, very recently actuallycome up with interesting.
Assets that are also available.
(13:27):
And there's also a large numberof companies who actually have
failed in virtualize ecosystem.
We, we talk less aboutthose ones, but there
are some as well.
Right?
It's not all success.
Ji Li (13:35):
so Franck, just to follow up regarding the,
the speed of China, right.
So, so that generated twogeneral responses from different
categories of company inthe multinational circle.
There's a belief that,they pretty much give up
to do anything internally.
If something get published ina paper you know, if, if they
(13:55):
wait for the internal bureaucratsystem to get this up and
running, the joke was, you know,you go to China, they give you
a clinical candidate already.
So they pretty much, resignedto the fact that you go to
China to find these things.
But on the other side of theecosystem, the earlier stage,
central capital incubatingnew company, it generate fear.
(14:16):
Because they do not want todisclose what they're working
on, knowing once that becomethe public domain, they will be
swamped by dozens of, you know,projects that go past them.
So that's a really interesting,effect that have, my,
observation in, in the last,I would say year or two.
(14:38):
it, it's become very obvious.
It is indispensable for Chinato be part of our ecosystem.
Right?
but that thing has evolvedin the last, I would
say, six to 12 months.
What you can see is beside thebiopharma biotech that you've
seen that has been fundedin the last five, 10 years,
the major domestic farmer inChina has entered the fray.
(15:01):
And these people aremuch more well financed.
Much more capable in termsof clinical development.
So all of a sudden they'regenerating Post-POC or
even later stage programthat has created fierce
competition among the MNC.
Try to acquire theseprogram, try to fill their
late stage pipeline gap.
And that is something, reallybecome competitive in the
(15:24):
late stage deal making.
In contrary in the earlystage where, you know, we
talk about a lot of the newcodes and VC backed, uh, uh,
biotech, those remain prettymuch in the favor of the
buyer, if you will, becausethere are hundreds of company
competing in the same space.
You really need tobe standing out.
(15:45):
To be, a winner like whatHarbour has done recently.
Right.
so it is become atwo different trend.
I see.
They're both competitive.
I think in the late stage.
Some of the program hasgenerated or command,
very little discount.
I would argue they, they'restarting to generate premium
while in the early stage youcan still find bargain you
(16:06):
know, at a discount if you will.
Josh Berlin (16:08):
Ji, this is Josh.
Maybe I'll, I'll jump in also.
And, and Mike, I, Iwanted to sort of turn the
conversation to you as well.
'cause, you know, one of thethings I think we're seeing is,
um, also a move to, strategiccollaborations as well.
there's been a, a, a couple ofreally high profile, examples
of that, and I think one of theearlier ones, I saying early,
(16:29):
but only five months ago.
That's, I guess,China speed for you.
But I thought, um, you know,one of the earlier, ones,
at least this year thatsort of pointed towards, a
strategic collaboration wasthat deal you guys did with.
With AstraZeneca, back in,in March, I believe it was.
So, can you tell us a littlebit about that deal and what
the thinking was for Harbourand, and how you see that,
evolving, in the, uh, youknow, are, we're gonna see
(16:50):
more of these sort of strategiccollaborations, in other words.
Mike Patten (16:53):
Absolutely.
Yeah.
thank you.
Thank you Josh andthe BioCentury team.
It's a pleasure to join youtoday and, and indeed, you
know, this is really excitingtimes at at Harbour as you
know, as you've highlightedin the discussion, but also
in your, your recent analysis.
And, yeah, I mean, I thinkAstraZeneca, our, you
know, our collaborationwith AstraZeneca is.
Exciting obviously for Harbour,but it's also significant for
(17:16):
the region, you know, fivemonths ago and really being
the first major collaborationof its type in being a, you
know, multi-program, multi-yearresearch collaboration
focused on the discoveryof the next generation
multispecifics, focused onalso oncology and immunology.
In terms of the structure ofthe deal, this is five year
(17:36):
initial, term with the optionto extend by another five
years, and also included asignificant equity investment of
over a hundred million dollars.
So really representingsignificant commitment to the
relationship and also the futureof of Harbour by AstraZeneca.
You mentioned this was,you know, five months ago.
and really that was sort ofthe marker of deals to come
(17:59):
and, and really as we're seeingis, just been the beginning
of significant collaborations,not just for Harbour, but
also for peers in our region.
And as, mentioned by, Franckand Ji, I think, you know,
I think Ji mentioned aboutChina speed that we're seeing
a rapid evolution of, of thesedeals and the collaborations
as those groups are reallysophisticated in, in deal
(18:20):
making and looking at how theregion can really support, you
know, Western development and,and other regions that I think
we're going to see, aspectsof the stage of the deals
as we talked about clinical.
research and how Chinaand, working in China
can help leverage that.
And I think we'll see moreand more of that being a key
component of collaborationsgoing forward and that we
(18:43):
will really see a real shiftaway from these transactional
one asset programs tomulti-asset collaborations
as we go forwaR&D.
And so I, I expect thatwhen we meet again in
a year's time, we'll betalking about completely
different, deal structures.
Simone Fishburn (18:57):
So Mike, that is interesting one of the
things that we found when welooked to this analysis as,
as Jeff said, it turned outthat there were 198 deals.
Right now, about 90% of themwere focused on products.
They may be multiple productsfocused on products, but a
growing trend is actuallypartnering to, what we
(19:17):
call enabling technologies.
So you might go license anantibody in order to make an
ADC we are starting to see muchmore different kinds of deals
than exactly what you said.
Not just go and in, get theasset go home kind of thing.
Actually, I have a kindof a question for you all.
You know what we hear hereall the time, we hear from
VCs and we hear from pharmas.
(19:39):
I'm spending much more timeon the ground in China.
So in China, are there VCs ofpharmas like walking around
notably much more than before?
Is it, is it somethingpalpable that you see, is
there that kind of energywalking around an interest, you
know, when you did your deal,was there a lot of inbound.
Mike Patten (19:58):
I think absolutely.
I think, I think everybody is,has some, some presence in China
and I think, certainly from.
my experience, I think you'reseeing that companies who don't
have an established footprintin China are finding out very
quickly that they need tohave that to be successful.
I'm sure Ji, and and Franckhave have observations
on that as well.
Simone Fishburn (20:19):
Or they need to come to conference.
Franck Le Deu (20:23):
It's very clear Simone, and know,
uh, being in our positionin China know we, we, get.
Request frequently fromsome of our clients or non
clients who ask us, okay,what's the best way to
set up a BD team in China?
and we see as well manyof our colleagues or
ex-colleagues being actuallypoached or approached to to
fill this type of position.
We also see almost on a weeklybasis, some of the bigger
(20:44):
names hold, annual biotechconference in China where
they actually, you know, bringtogether the network of biotechs
and present what they do as acompany, what they want to do.
Which is, as youmentioned, beyond just
sourcing particular asset.
It's now about sourcingtechnology and also the
next frontier I thinkis about partnering to
(21:04):
actually impact the way thebig pharma works in R&D.
I think there's a lot ofinterest for some of the global
health R&D worldwide to figureout what is it exactly that
China has as a secret saucethat could help transform the
global R&D organization, whichare often seen as a little
bit bloated, inefficient.
And maybe in need of aninjection of China speed.
(21:25):
And that I think to me, isone of the most interesting
topic that will playout in the few years.
Ji Li (21:30):
just to follow up in terms of the, on the ground,
I'm sure Franck can tellyou, I mean, the joke is
if, if a particular week, ifthere's not an MNC in town in
Shanghai, something is wrong.
That was a joke.
So they go through everyweek and plus all kinds of
local partnering conference.
So, so it's really a superactive, scenes there.
(21:51):
But getting back to,regarding, technology or
platform collaboration.
I think if you look at someof the newly emerged platform,
Next generation RNAi, invivo CAR T, you name it.
You know, these are thingsactually that Chinese
biotech are at the forefront.
the gap between them and the,the western counterparts are,
(22:12):
you know, I think narrowingor even in many cases,
they're leading, you know,in the case of in vivo CAR,
I'm sure you guys saw that.
so I think, the ecosystemwill continually evolve and,
uh, I wouldn't be surprised,like Simone said earlier,
the truly first in classasset will emerge and more
and more as we go forward.
Josh Berlin (22:31):
So, Ji, let, let me ask you this.
Um, you know, you're, you'redealing with, you know, a lot of
clients, you're, you're involvedin a lot of negotiations
with deals ones, we'veseen the press releases on.
Sure there are a bunchof others that didn't
come, come to fruition.
But how are you seeing, um, thedeal terms, evolving over time?
You know, as the demandhas, continued to increase
(22:52):
for, finding, assets,de-risked assets in China,
you know, is that leadingto to China biotechs being
able to get better terms?
Are there, are therethings you're seeing.
in the negotiations that are,you know, maybe different
now versus, versus a year agoor six months ago in terms
of leverage on deal terms.
Ji Li (23:10):
Yeah, no.
as I said earlier, especiallythe sort of late clinical
stage assets are very rare.
oftentimes, the Chinesebiopharma will be able
to bring us assets with.
Is hundreds if not thousandsof patient experience.
You just don't see that anymore.
most of the small biotechin the western part of world
(23:31):
couldn't quite deliver thatsort of a data package.
Therefore, that gave us a lotof leverage in the negotiation.
In terms of not just, you know,the pure cash up front, but
also the whole package, right?
Oftentimes involve moreparticipation and equity,
et cetera, et cetera.
So I think, these late stageassets become increasingly
(23:51):
competitive for the MNCs.
And, they all openly talk aboutthere's no more China discount.
Josh Berlin (23:58):
Yeah.
one more trend.
You know, Franck,Jeff plugged your, uh.
Your LinkedIn site earlier,which I agree is, is one that
folks should be, following.
But, um, you know, there wasa, a, a deal recently that you
commented on that, uh, we werealso sort of kicking around
at BioCentury, which was, thetakeout of, the China biotech
LaNova by, Sino Biopharma.
You know, historically therehasn't been a whole lot of M&A
(24:21):
within in the China market.
And here, you know, is a, Ithink a great example of, um,
more traditional China pharma.
acquiring a China biotech, isthat, is that something you guys
are expecting to see more of?
Is, is that somethingMcKinsey's been following?
Franck Le Deu (24:35):
it was not a surprise to us to see that
type of deal finally comethrough because, I mean, I can
be corrected by Mike, Ji, orSimone, but I think this was
actually the first sizable,China-China deal, right?
Uh, as an M&A, I think it'swelcome by the industry because
it offers another exit forthe biotech entrepreneur.
some of those large traditionalChinese pharma companies
(24:56):
have very deep pocket.
Many of them are in the processof transitioning from largely,
largely generic businesses toinnovation businesses, whether
they are state on enterprisesor private companies like for
example, Hengrui, which isone of the most active name
and probably ahead of manyother companies in terms of
making that transformationtowards innovation.
So, no, it's not a surpriseand it's a welcome, a welcome
(25:18):
addition, I guess, to the,ecosystem because we do need
a capital market that works.
We do need an m and a marketthat works, and this cannot
just be a channel to the west.
There also needs to bea, a healthy channel to
China, ecosystem emergingin terms of transactions.
Ji Li (25:34):
Actually for the longest time you, you
don't see much M&A, withinthe domestic, ecosystem.
And just simply becausethe traditional pharma has
really hard time to valuethese early stage assets.
If you have something veryclose to the market, they
can tell you what wouldbe the market penetration.
Their, they can give youa good, sales forecast.
But for these early stagestuff, they, typically struggle.
(25:57):
So that's
Simone Fishburn (25:57):
gee, they've been doing, they've been doing
early stage deals with westernbiotechs forever, so they do
know how to put a value on them.
They may have a different riskprofile or something depending
on, I don't know, geopolitics.
But, they've been doinga lot of early stage
deals for a long while.
Ji Li (26:16):
Um, you know, many of these probably are early
technology and stuff like thatin terms of like pipeline.
if you ask the domesticpharma today, they're most.
Looking for close tomarket stage, you know,
opportunity X China.
so that's why this dealis very significant.
and also it's more significantin light of the very, very hot
(26:37):
Hong Kong stock exchange, right?
Because, a company like,you know, but they do have
the other paths for exit andthey chose to be acquired
by a domestic farmer.
Josh Berlin (26:47):
One, you know, one, one other, hot topic obviously
that we haven't talked aboutyet is, is sort of the NewCo
model and, the NewCo deal flow.
love to hear yourguys' thoughts on that.
Mike, I know you guys wereinvolved in the Windward
deal, for instance.
You any, sort of insights onwhat people should think about
in terms of, opportunities forNewCos versus licensing deal.
Mike Patten (27:07):
Yeah.
No, we were very excited tobe part of, of Windward and
to, to see that company grow.
the opportunities there.
I mean, I think, I think there'sstill opportunities for NewCos.
I think as you, you'vehighlighted it in your
analysis, obviously the marketis, changing again quickly.
And so the opportunitiesfor groups who would
back, NewCos are changing.
And, and I think that's.
(27:27):
Also an opportunity forHarbour and we're, you know,
we're speaking with groupsto really think about what's
the next phase for NewCos.
I think there's still anopportunity there and it's
really, completes the circleof the conversation is really
that with China biotech,there's a lot of opportunities
for flexible deal structures,a lot of synergistic ways of
working with venture biotechall over to really ensure that
(27:50):
we're progressing innovativetherapies for patients.
And so I think that you'llstill see them, but the nature
of those NewCos will, willbe changing in terms of how.
the underlying deal structureof maybe licensing the
stage that they happen.
And as we've also talkedabout how the nature of
those collaborations andthe involvement potentially
(28:11):
of the Chinese biotech orAsian biotech will be is
that NewCo matures as well.
so that's I think a, aninteresting space, uh, to
watch and, and hopefullywe'll have some more news
from Harbour in the coming,in the coming months.
Ji Li (28:23):
the other new phenomena in recent, because
of . The Hong Kong stockexchange performance.
Many of the China privatebiotech are trying to go public.
as Franck know, thereis a strict, you know,
guideline in terms of whatthey need to do to qualify.
So therefore, that's startingto affect if they would do a
partnership to give away theirlead asset because they need
(28:43):
to have like a phase two asset.
you know, so sometime theywill say, Hey, we need to
keep our lead asset becausewe're qualified to go public.
So that becomes, you know,whether that's a NewCo or
a, a regular partnershipthat's starting to have an
effect on, you know, themanagement and, and, and
board of these company whenthey think about partnership.
So it'll be interestingto see how this evolve.
Jeff Cranmer (29:05):
Yeah, it's, been a great year
for IPOs in Hong Kong.
there's also been someactivity in Korea, and I
think together they outstrip.
what's been happening onNasdaq and how's, how's
the environment for followon financing in Hong Kong?
Ji..
Ji Li (29:19):
Well, that's an interesting thing.
You know, Franck, maybe you havemore data point in that regard
when you guys do your analysis.
I think as you said,this is coming out of a
multi-year goal, right?
I don't know where is theexpectation is when these
follow up financing startedto happen because, you know,
many of the stock, I look atit this year, they not only,
(29:40):
double, they triple, theyquadruple from their loan.
So, you know, at some point Iwould think they will leverage
the market to, to put in some,uh, money from the market.
Yeah.
Franck Le Deu (29:50):
Yeah, no, we don't have data yet.
We, our team is stillworking on the report.
We'll present in, inShanghai end of October.
So you have to be at theSummit, I guess, too.
It an answer to that question.
Jeff Cranmer (30:01):
Excellent.
Simone Fishburn (30:01):
a layout for you that.
Jeff.
Jeff Cranmer (30:03):
That's a layup for me.
I mean, uh, gosh.
Uh, this has been a lot of fun.
Um, I, I would justlike to say, uh.
There's still time toregister for the conference.
it kicks off on October 22ndand it runs until the 24th.
If you can't make it toShanghai, you can register
to attend digitally.
head to BioCentury Chinato register and learn
(30:26):
more about the program.
I am still recruiting,presenting companies.
We'd love to.
get some companies from theU.S., from Europe, from Canada,
out to see firsthand what'sgoing on, and we pride ourselves
on having the right people inthe room at our conferences.
And it'd be a great place totalk deals, to talk financings
(30:48):
and, you know, you get to meetJosh and talk tennis with Simone
on top of everything else.
And, and Josh didn't we justadd a, pre-event networking.
Josh Berlin (30:58):
that's right.
Jeff Cranmer (30:58):
what, what, what is that?
It's like visiting some kind ofcool research park, isn't it?
Josh Berlin (31:03):
we will, yes.
So on the first day we're gonna,our first morning before the
the conference starts, we'regonna take a, uh, a bus tour
of Zhangjiang Park, which istop science, the technology
park there in Shanghai.
you know, we're big believersin, you gotta see it.
I, think you really have to see.
what's happening in China?
See the scale.
See how, so many differentcompanies, from MNCs to China,
(31:24):
biotechs to CDMOs, are alllocated there in the park.
So, that's a benefitof, attending the event.
And, as, Franck also alludedto, you know, McKinsey, which
is our longtime insightspartner, will be releasing
its conference report.
You know, always a lotof data that folks like
to get their hands on.
So that'll also be a, akey feature of the event.
(31:45):
And, you know, lots of.
Networking and, andopportunities for partnering
and learning as well.
So we hope to see you out in,uh, Shanghai, October 22 to 24.
Jeff Cranmer (31:55):
Excellent and lot, lots of VCs will be there.
And this year, Josh, right?
And, quite a fewPharma, BD and L people.
Josh Berlin (32:01):
We have, an unbelievable, amount of, uh,
Western, VCs and biopharmaexecs coming out this year.
And then, uh, as always,sort of a who's who of China
biotech, VCs and, and CEOsand, all the MNCs, the, the
big pharma will be there bothat the BD&L level as well as
the, uh, the China GM level.
Jeff Cranmer (32:21):
Excellent.
Well, I think this is a,a great point to thank our
guests and, uh, sign off.
Mike, I wanted to mention thatwe recently did an analysis,
Kind of off the back ofSimone's analysis that looked
at who are the top, dealmakers and Harbour was number
one the China biotech side.
And, and, uh, wasit AstraZeneca?
(32:42):
Simone, that was,uh, number one.
Yeah.
Ji shaking his
Simone Fishburn (32:45):
AstraZeneca by some way, but I actually,
in terms of the licensees,of course, GSK was second.
I actually wannamake the point there.
BioNTech have also donea whole bunch of deals.
So they're not a pharma, butthey dealing like a pharma.
I gotta tell you.
Jeff Cranmer (32:59):
And Biocytogen, again, on the China
side, very, very active.
Well, Mike, Franck, Jithank you so much for
sharing your insights.
Franck.
Looking forward to the report.
definitely.
Uh.
Put an extra pot of coffeeon for, uh, Fangning
and Josie and the team.
And, Ji uh, hope to talk soon.
(33:20):
And as always, Simone Josh.
thanks for joining.
And a special thanks to,Kendall Square Orchestra,
which provides the music forall of BioCentury podcasts.
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