One of America’s largest pharmaceutical companies announced this week that it will partner with a Chinese drugmaker to test some of its experimental drugs and discover new ones, a deal that could mark the next phase of coordination between the continents.
Bristol Myers Squibb announced on Tuesday a potential multibillion-dollar partnership with one of China’s leading drugmakers, Hengrui Pharma. The companies will work together to develop about a dozen drugs, including four discovered by Bristol and which they will send to China’s Hengrui to conduct initial clinical trials. The two companies will also collaborate to discover new drugs.
“It’s a huge signal,” said Michael Baran, head of private investments at health-focused hedge fund Affinity Asset Advisors and a former partner at Pfizer Ventures. He said U.S. drugmakers have previously collaborated with Chinese companies to develop drugs, including Amgen’s collaboration with BeOne in 2019.
But the Bristol agreement is important because it is more reciprocal, he said. That raises the possibility that more U.S. drugmakers are doing more early drug development in China, aiming to bring treatments to market more quickly, and that Chinese companies could begin to become global powers.
The logo of the pharmaceutical company Bristol-Myers Squibb on the facade of the company’s German headquarters in Munich, March 10, 2026.
Mattias Balk | Alliance in pictures | Getty Images
Bristol and Hengrui will each contribute assets and work together to develop new drugs, making China look less like a source of point molecules and more like part of the pharmaceutical industry’s global operational research and development system, Baran said.
American and European biopharmaceutical companies like Pfizer, Merck And AstraZeneca were increasingly turn to China to find their next potential blockbusters. Just over half of the licensing deals made by big pharma companies have come from China so far this year, compared with 39% for all of last year and 5% in 2022, according to data from DealForma, which tracks deals in the sector.
Until now, the strategy has mainly been for large drugmakers to license drugs discovered and undergo preliminary testing in China, or essentially to remove experimental drugs from China. Some American companies like Eli Lilly have partnered with Chinese companies to discover and develop new drugs.
The Bristol deal differs in that it sends several experimental drugs to China.
A worker checks the position of a feeding tray in a pharmaceutical manufacturing truck in Hengrui Biomedical Industrial Park in Lianyungang, China, 13 December 2021.
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Lieven Van der Veken, senior partner at McKinsey, said the Bristol partnership differs from others in some key ways. This is similar to a deal Hengrui recently signed with GSK that gives the British drugmaker access to some of Hengrui’s experimental drugs. But with this deal, Bristol recognizes that it has drugs it can develop more quickly and for less money in China. And that’s working with Hengrui to come up with new ideas.
“More and more companies are looking at this as a global networking model where China is not a threat or a separate source of innovation, we need to leverage it in a deep way,” said Van der Veken, global leader of QuantumBlack, AI by McKinsey. “You have to participate. You have to be present. And people have tried to do it with local teams, people have tried to do it. [venture capital]investments based on investments. It’s just the next level. »
Chen Yu, founder and managing partner of crossover fund TCGX, was one of the first to introduce Chinese medicines to the United States. He said the industry now finds itself at a transformative moment where more early work is moving to China, where twice as many drugs can be studied in half the time and for a third of the cost.
“For the past 25 years, American investors and entrepreneurs have had the luxury of not thinking about anyone else,” Yu said. “This is not going to be the future.”
By the end of the decade, Yu said, the idea of leading early drug discovery in the United States could seem as realistic as making the iPhone in the United States. He believes that the early stages of drug development will ultimately follow the path of textile manufacturing, which has largely shifted to China.
Mid- and late-stage trials will still need to be conducted in the United States in order to gain approval from the Food and Drug Administration, he said, but conducting the first studies in China could help companies introduce drugs more quickly than they can today.
Some companies are already conducting more of their early work in China. AstraZeneca is conducting most of its early studies of an experimental cell therapy in the country, said Ruud Dobber, who heads AstraZeneca’s biopharmaceutical business. And he “absolutely” expects the British pharmaceutical maker to do more across its entire pipeline.
People disagree on whether China’s rise helps or hurts the U.S. biopharmaceutical industry. Some, like Yu, say making drugs faster and cheaper will help people who need them. Others, like the industry advocacy group Biotechnology Innovation Organization, argue that China’s rise could come at the expense of American companies.
They agree on one thing: China is here to stay as a force in drug manufacturing.
