Category: Clinical Research

Emerging from stealth earlier this month, Boston-based Solstice Oncology highlighted its origins in a trans-Pacific exchange that’s grown commonplace. The startup licensed its lead asset, colon cancer candidate porustobart, from Chinese biotech Harbour BioMed in February in a deal worth more than $100 million upfront and potentially upwards of $1 billion. Such deals are helping to fuel the rapid growth of Chinese biotech, which is also the beneficiary of decades of focused support by its government.

There’s ample reason to believe that trend will continue: Last week, the Chinese government released a new five-year plan that lays out a goal of $521.8 billion in combined revenue for its domestic biotech industry by 2030. It also aims to originate at least 25% of first-in-class drugs on the global market by that date.

Meanwhile, out-licensing from Chinese biotechs has surged since the start of the COVID-19 pandemic, from 35 such deals worth a total of $989 million in 2019 to 186 deals worth $137.7 billion in 2025, according to data from PharmCube. Evaluate has predicted that Chinese assets will make up more than two-thirds of total deal value this year, up from less than 5% five years ago.

“The number of licensing deals have radically accelerated, wherein large pharmaceutical companies are increasingly turning their business development to China,” Jeremy Levin, executive chairman of Ovid Therapeutics, told BioSpace. “The shift of pharmaceutical licensing activity toward China-originated assets is now an established fact, and two years ago it was far less pronounced.”

Such licensing deals may be a boon to companies like Solstice Oncology, but the rise of Chinese biotech has prompted considerable handwringing about U.S. competitiveness.

“We have to start thinking about what it means if we so erode our innovation base here in the U.S. that we are dependent on a potential adversary for life-sustaining medications,” Caitlin Frazer, executive director of the National Security Commission on Emerging Biotechnology (NSCEB), told BioSpace last month.

How China gained momentum

The Chinese government’s prioritization of biotech traces back to a 2006 mention of related terms in a medium- and long-term planning document, said Alexander Brown, a senior analyst at the Mercator Institute for China Studies (MERICS). The sector has continued to crop up in government planning documents in the two decades since. While experts say it’s difficult to quantify how much the Chinese government puts into its domestic biotech sector, Brown and a MERICS co-author estimated the investment was at least 20 billion renminbi (about $3 billion) in 2023.

One difficulty in quantifying the government’s support is that it goes beyond direct investment in startups, Cyriac Roeding, CEO of the cancer therapeutics firm Earli, said in an interview. “The Chinese government does a lot of things in many different ways, not just direct investments, but also purchases, like getting into the game as a customer, or cheaper supplies,” he explained.

Levin said the Chinese government’s biotech strategy has taken decades to execute. First, it established the ability to manufacture medications. Next came domestic contract research organizations (CROs). “That gave them the ability to make a molecule and then to test it,” Levin said. “As they did that, they studied very carefully how we approved drugs. And so they established and continually refined their drug approval process in China.”

In step three, China launched clinical trials “in a way that complemented their testing of drugs in the CRO-like environment,” Levin said. “They established a highway which was high speed for the development of so-called lookalikes or bio-betters,” medications based on the mechanism of action of existing drugs developed elsewhere. In step four, the government launched programs aimed at attracting researchers who’d gained valuable training and experience abroad to return and put their skills to work domestically. These programs cover a range of science and engineering fields in addition to biotech.

Some commenters have used the specter of Chinese competition to argue for more streamlined regulation of clinical trials in the U.S. On the flip side of the same coin, two lawmakers called for increased FDA oversight of Chinese study sites and scrutiny of data collected there after several clinical trial deaths in the country. But none of the experts who spoke with BioSpace cited a superior regulatory process as a factor in the rise of the Chinese biotech industry.

“Yes, [regarding the] FDA, there’s a lot of things that can be done better. No question,” Roeding said. But that’s not going to reorient the trajectories of the U.S. and Chinese biotech sectors. Rather, he argued, you have to follow the money.

A funding double-bind

Roeding pointed out that the billions poured into licensing deals with Chinese companies represent money not going to innovative early-stage research happening stateside. That compounds what he sees as the major factor holding U.S. biotech back as China rises: a lack of consistent funding.

While he conceded that boom and bust cycles have always characterized private investment in U.S. biotech, he said funding for early-stage, innovative research is far worse than in the past because of a prolonged post-COVID bust and because AI ventures are now attracting the vast majority of venture capital investment, leaving little leftover for biotech. And while currently the “XBI looks great,” Roeding said, most investment that does reach biotech goes to clinical-stage companies rather than earlier-stage work.

“This industry is deeply suffering from the lack of consistency. That’s our biggest problem,” Roeding said. “Consistent funding for innovation that has long cycles of time, much longer than others, is critical.”

To accomplish that, he argues for the creation of a publicly funded sovereign wealth fund. Its investments should be concentrated in bust cycles and in bridging the “valley of death” between early, NIH-funded research and clinical validation, he said. “And now you can start flattening the [boom-and-bust investment] curve and you can be internationally competitive.”

Moreover, Roeding added, “the beautiful thing about it is if it’s done right. . . . It’s actually going to pay itself back and more. Society is going to make money off this.”

Levin has a different take. A lack of appreciation for biotech and a failure to differentiate it from pharma mean that the former sector suffers from price-control policies such as the IRA and Most Favored Nation, as well as a health insurance industry that often pushes the cost of drugs onto patients, he said.

Then to add insult to injury, Levin continued, the FDA substantially reduced its workforce last year, laying off about 20% of employees. That loss of institutional knowledge caused what he called “structural damage” that risks widening an already established competitive gap as China moves rapidly in biotechnology.

That said, Chinese biotech faces barriers of its own, Levin noted, especially in their capability to scale, to fully develop drugs on their own and to reach overseas markets. “And that’s why we’re seeing a huge takeoff, also, of out-licensing deals in recent years,” Levin told BioSpace.

“So it’s not all rosy for the Chinese biotech sector,” he continued, “but certainly this long-term government backing and just the fact that they’re able to do research and do certain processes in China at a higher scale, at a cheaper cost, at a faster speed than in other countries is really a core reason why they’re rising so quickly.”

The new five-year plan, he said, demonstrates that “China has moved well beyond trying to become faster and better at drug development. It now wants to discover important new medicines in China, develop them there and build companies that sell them around the world. That represents a fundamental change in China’s ambition for its pharmaceutical industry.” Even if it falls short of its “extraordinarily ambitious” 25% first-in-class target by 2030, “What matters is what China will have built along the way.”

“When China decides to make something a priority, it follows through with strategy, planning and investment,” Roeding said.

A geopolitical lever?

Levin postulated that the Chinese government plan for the rise of biotech culminates with a fifth step in which a Chinese company develops a groundbreaking medication—he gives the example of a cure for Alzheimer’s—but withholds it from the U.S. if relations between the two countries are tense at the time. In other words, China could use life-sustaining medicines as a bargaining chip, just as it has with magnets, solar technology and rare earth metals.

Roeding warned that Chinese dominance could become an issue even when there is no competitive intent involved, namely if supplying a drug domestically needs to be prioritized. He pointed to the COVID pandemic, when each country prioritized its own supply of vaccines. Becoming dependent on a drug sourced from China would make the U.S. vulnerable to supply chain issues.

Brown agreed it’s a possibility the Chinese government could use a crucial drug as a strategic lever. In his view, that’s more likely to work after a Chinese drug is already established in the U.S. or another market, rather than with a newly launched medication. But he said there are ways to mitigate that risk, such as stockpiling drugs and encouraging Chinese companies to set up manufacturing facilities within the country where their drugs will be sold.

Brown noted it’s still the case that companies in the U.S. and other Western countries have a “huge advantage” over their Chinese counterparts: the market size of their home countries. And accessing U.S. and European markets has been key to some of the Chinese industry’s biggest success stories.

“That places a question mark on [Chinese companies’] development going forward: whether or not access to those markets will remain open, or whether or not China itself will take measures to expand its own market,” Brown said.

“[T]he wrong American response is to try to hold China back,” Levin said. “We need to look at what we are doing at home.”

When China surpassed the U.S. six years ago in terms of the number of clinical trials and in natural science publications soon thereafter, the surges were shots across the bow for the American research-industrial complex, according to some observers. Since then, the U.S. has also fallen behind the Asian nation in R&D funding and translational science—potentially putting the country at risk in the event of a geopolitical crisis.

“China’s approach has been to steal, scale and strangle American competitors in this space,” Caitlin Frazer, executive director of the National Security Commission on Emerging Biotechnology (NSCEB), told BioSpace. “We have to start thinking about what it means if we so erode our innovation base here in the U.S. that we are dependent on a potential adversary for life-sustaining medications.”

The NSCEB is a short-term task force that was created by Congress in 2022 to review where national security could be threatened by China’s newfound dominance and recommend potential remedies that could put the U.S. back on top.

The battle between the U.S. and China for global superpower supremacy has spilled over in recent years to the biotech industry. Chief among those concerns is genetic data transfer, or the possibility that Americans’ genetic information and clinical data could be accessible by the Chinese government, according to a recent publication in The Economy. Further, running early clinical trials in China means a hit to the U.S. economy, and the potential for Chinese patients to secure access to novel medicines before Americans.

“The U.S. has long been the leader in biotechnology innovation in many ways,” Frazer said. “Modern biotechnology is an American invention, and many of the platforms and tools that biotechnologists across the world rely on were innovated in labs here.”

But China has taken advantage of a U.S. system that has increasingly become less likely to reward biotech innovators, Frazer warned, and “we have struggled to scale and commercialize those innovations coming out of American labs.

“The result of that,” she continued, “is that China principally, but other countries more broadly, have built the manufacturing capacity to scale the inventions created there.”

And now, she added, China is also threatening to overtake the U.S. in basic science research, where canceled grants and budget cuts have crippled dozens of programs. “What’s changing now is that in addition to being out-manufactured, we are at risk of being out-innovated,” Frazer said.

China’s ascendance in early-stage biotech is “a call to action” for the U.S. to retain its position as a global leader, Seema Kumar, CEO of healthcare innovation coalition Cure, told BioSpace.

“It’s not just academia, and it’s not just biotech—everybody has skin in the game,” she said.

Frazer pointed to other tech sectors in which the Chinese government wields supply chain power, such as critical minerals, that help foster geopolitical leverage for the Asian nation.

When it comes to life sciences, Frazer described the risk bluntly: “The actual discovery of a blockbuster cancer drug, a no-kidding cure for cancer, to be innovated and manufactured in China and therefore to be under the control of the [Chinese Communist Party].”

NSCEB’s findings

China has taken advantage of U.S. stagnation in fundamental science research to build a thriving biotech infrastructure that makes it difficult for the U.S. to compete, Frazer said. She specifically pointed to “a 20-year strategy by the Chinese government to dominate in biotechnology,” using regulatory reforms to streamline and bring its system in alignment with international standards. The NSCEB report calls China’s approach “economic warfare.”

To respond and foster a thriving U.S. biotech environment, NSCEB in its April 2025 report recommended streamlining regulation to more quickly move products from lab to market; treating biological data as a strategic national resource; and building physical manufacturing infrastructure for fledgling companies to cross the so-called valley of death of drug development. On the funding side, the commission advised empowering the government to invest in the private sector through taxpayer-backed, VC-like entities alongside market commitment agreements that would make the government a first consumer of biotech products.

It’s a “run-faster agenda,” Frazer said, designed to reestablish U.S. leadership in the space through regulation, data, infrastructure and investment.

The NSCEB is also exploring ways in which the U.S. can actively push back against China’s advantage, Frazer said. The commission, which will wrap up operations by the end of the year, is currently conducting an investigation into Chinese subsidization and pricing practices that undercut American competitors.

The group is also seeking out points of failure in the supply chain that make U.S. companies reliant on a Chinese supplier or service provider without an alternative. One piece of legislation already in place to combat such reliance is the BIOSECURE Act, signed into law in December 2025. Though the final bill did not name specific firms as previous iterations had, it did blacklist “companies of concern” in China that lawmakers deemed to pose national security risks.

In terms of the U.S. regulatory environment, Frazer said the FDA needs to move more efficiently through risk assessment of products where the science is familiar and devote more agency time and resources to creating clear, durable pathways for the regulation of novel products where the science is not yet as well understood, such as rare diseases with smaller patient populations.

This comes down to predictability and transparency, she said, with an emphasis on the FDA sticking to timelines and communicating questions and concerns with drug sponsors in a timely manner. She pointed to Phase 1 trial initiation as a particular sticking point for the FDA, resulting in a competitive edge for countries like China and Australia, and the agency is now taking steps to address this concern. This summer, the FDA launched a handful of initiatives under the Department of Health and Human Services’ broader Operation Trialblazer Initiative aimed at streamlining investigational new drug applications and first-in-human trials.

The FDA’s new investigational new drug pilot program—one part of HHS’s broader clinical trial modernization initiatives—has lofty goals to expedite first-in-human trials of novel drugs, but experts say it won’t tip the scales much on its own.

August 3, 2026

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9 min read

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On a grander scale, though, Frazer emphasized the need for a master plan—something she said has so far been missing. “There has not been a durable national strategy that persists from administration to administration” to support the U.S. biotech industry and protect it from dependence on China.

China, on the other hand, “runs the country as a company,” said Insilico Medicine CEO Alex Zhavoronkov. He describes five-year plans that detail “which areas are going to get funding and with which performance indicators.” In the U.S., meanwhile, diversifying priorities are diluting the country’s biotechnology dominance, he said.

Also part of the challenge is that the biotech industry’s long timelines don’t jibe well with the U.S. political system, Frazer noted. “It can take 10 years to bring a product to market, and that’s five election cycles in the House of Representatives, or two and a half presidencies.”

Since the NSCEB report came out last year, however, 36 of the commission’s numerous recommendations have seen bipartisan legislative action, according to Frazer. Some of this action has come through Congress, she added, while nine of the commission’s recommendations have been included in White House executive orders.

“Congress is now seizing the opportunity to legislate on these issues in a bipartisan way, which is something we have historically not seen here in the U.S.,” Frazer said.

But the U.S. still lacks that critical national biotech strategy to combat China’s rise, she added—and corralling the industry to join in that effort could be another challenge altogether.

An industry torn

Most life science professionals project that China will continue to outpace the U.S. In a recent survey conducted by Cure, 72% of senior U.S. industry and academic leaders said China’s biomedical sector is improving at a faster pace than that of the U.S., and 85% said the U.S. will lose its lead within 10 years.

Biotech leaders have expressed to the NSCEB that the ability to run a clinical trial more quickly and cheaply in China, resulting in quicker access to first-in-human data, is attractive, according to Frazer. While the same leaders are also concerned about the erosion of U.S. clinical trials and what that means for long-term competitiveness, China is increasingly viewed as a place to innovate, not just to manufacture, she said.

It’s something the Chinese system has been hammering away at for decades, BDO Life Sciences National Leader Brad Stewart told BioSpace.

“In China, they work very quickly with access to capital and lower costs, and what they’re paying for workers, for land, for power, for everything, is lower—plus they’ve got great access to talent,” Stewart said. In contrast, the regulatory system in the U.S. is “very slow-moving,” he said, “so you can see why companies are able to get into clinical work quickly and just move at a faster pace in China, and time is money.”

While Operation Trialblazer aims to expedite early-stage trials, the regulatory bodies involved in clinical research are just one pinch point. The medical sites that administer trials are also a part of the bureaucracy.

The U.S. remains the largest healthcare market in the entire world “without question,” Stewart said, but that long history of legacy systems and bureaucracy has made it a relatively slow-moving machine. “The Chinese system seems more built for purpose as opposed to one built on many decades of regulation.”

The biopharma industry therefore often sees China as an arena worth exploring. Several deals have been struck between U.S. and Chinese drugmakers since the beginning of 2025, including recent ones between Pfizer and China’s Innovent Biologics, and Bristol Myers Squibb and Hengrui Pharmaceuticals, each with more than $10 billion on the line.

From a global perspective, China’s rise is “great for biotech,” said Alex Zhavoronkov, CEO of Insilico Medicine, whose AI-based drug discovery company has conducted extensive business in the country.

Zhavoronkov looks to companies like SpaceX and Tesla as exemplars for the global biotech sector making inroads in China. “We are not a China-based company, but we want to fiercely compete there and also use China as a platform—Elon [Musk] provided us with a great playbook for doing that,” Zhavoronkov told BioSpace.

This month, Insilico re-upped with China Medical System Holdings to develop neuroscience and autoimmune candidates. Insilico listed on the Hong Kong stock exchange late last year.

Zhavoronkov thus vehemently disagrees with efforts to restrict U.S. companies from working with Chinese firms. “The objective of the biotechnology industry is to make drugs cheaper, faster, better and with a high probability of success to serve patients,” he said. “I think it’s immoral to restrict collaboration in biotech. If the U.S. wants to compete, the best way to do that is to deregulate.”

Norstella, a company that builds AI to facilitate clinical trial planning, similarly sees China’s biotech rise as an opportunity and advises clients to go wherever they can to build a program that will move as quickly as possible.

“We’re agnostic in terms of whether that’s in the U.S. or China, and certainly if you’re looking at where Phase 1 clinical trials have been able to start up and enroll and give preliminary data quickly, that’s in China,” said Daniel Chancellor, Norstella’s VP of Thought Leadership. “China is now running three times as many Phase 1 clinical trials as the U.S., and that’s with good reason.”

Daniel Hanley, founder and director of the BIOS Clinical Trial Coordinating Center at the Johns Hopkins School of Medicine, pointed out the security risk for the U.S. in this scenario, however. “We should be worried that a parallel system may exist that could be co-opted in a time of stressed competition,” he said.

Frazer was more stern in her warning. “With the trajectory that we are on, we believe the U.S. is at risk of falling behind in the next couple of years, and we may never recover from that.”