In 2025, China generated $137 billion in out-licensing in biotechnology, compared to $14 billion in 2021. This leap—a tenfold multiplication in four years—says more than just that China has become a leading scientific actor: it says who captures value when innovation succeeds. While Seoul, Singapore, and Sydney produce promising molecules, Beijing and major Western pharmaceutical groups cash in the milestones, royalties, and commercialization rights on a global scale.
The Essentials
- China captures $137B in biotech out-licensing in 2025, up from $14B in 2021, thanks to three decades of alignment between industrial policy, intellectual property, and public capital (Bain & Company APAC 2025).
- Other APAC economies innovate but cede most of the commercial value: 74% of regional biotech venture capital remains concentrated in China in 2026 (BioSpectrum Asia, June 2026).
- At ASCO 2026, Asian therapies appear at the center of global innovation for the first time, not as alternatives; China carries the bulk of this representation.
- South Korea, Singapore, and Australia remain incubators that sell early, lacking the capacity to fund clinical and commercial scale-up.
- The challenge for 2030: whether these economies consolidate their upstream position or continue feeding others’ rent.
Thirty Years of Industrial Policy, Not Luck
Out-licensing measures bargaining power, not scientific genius. To grant licenses worth $137 billion, you must own assets that buyers cannot reproduce alone: solid patents, sufficient clinical data, and regulatory credibility that allows the buyer to reach market approval.
China built these three pillars deliberately. The “Thousand Talents” program repatriated researchers trained in the United States and Europe starting in the 2000s. Biotech clusters in Shanghai, Suzhou, and Beijing received massive state funding, coordinated by sovereign wealth funds and regional investment vehicles. The reform of the National Patent Office, initiated in 2008 and accelerated after 2015, transformed the quality and defensibility of China’s IP portfolio. The National Medical Products Administration (NMPA) aligned its requirements with ICH standards, making Chinese data directly acceptable in American and European registration filings.
The result of this alignment is visible in the numbers: when BeiGene signs a licensing agreement with AstraZeneca, or when Legend Biotech cedes rights to its anti-BCMA to Janssen, these transactions no longer resemble the asymmetric deals of the 2000s, when a Western company would buy a molecule for a modest sum. These are partner agreements, with milestones tied to clinical stages and royalties on global sales. China has ceased to be the contract manufacturer: it has become the licensor.
The Gap Between Korean Innovation and Japanese or Chinese Commercialization
South Korea produces top-tier biology. Samsung Biologics is one of the world’s largest biomanufacturing contractors. Celltrion has launched several biosimilars that have captured significant market share in Europe and the United States. Laboratories like Yuhan and Hanmi have developed antibody-drug conjugates (ADCs) that have attracted the attention of major global pharmas.
But here lies precisely the asymmetry. Hanmi Pharmaceuticals concluded in 2024 a licensing agreement with MSD for an ADC program estimated at more than a billion dollars in total value. Korea supplied the initial innovation, the fundamental biology, the Phase I data. MSD brings distribution networks, global regulatory capabilities, and the treasury to finance Phase III pivotal trials. The long-term financial upside, if the molecule is approved, will go primarily to the American company.
This is a model that resembles what we observe in other technological sectors: innovation is born at the periphery, rent concentrates at the center.
Singapore plays a different but symmetric role. The city-state has successfully built a high-quality ecosystem for translational research around Biopolis, A*STAR, and its partnerships with Duke-NUS and NUS. Its researchers publish in Nature and Cell. Its biotech startups raise Series A funding. And then they sell, or they move to the United States to access the capital necessary for late-stage clinical phases.
Singapore lacks a sufficient domestic market, and its late-stage venture capital ecosystem remains thin. In 2026, according to BioSpectrum Asia data, 74% of APAC biotech venture capital is concentrated in China: the remaining proportions are shared across all other regional economies.
Australia illustrates a third variant. Its universities—Melbourne, Sydney, Queensland—generate internationally-level basic research, and the country benefits from favorable tax treatment of R&D. But the local value chain stops at Phase I or II. Assets then move to American, European, or increasingly Chinese acquirers. Australia is an excellent producer of early-stage science, a systematic exporter of value in advanced phases.
At ASCO 2026, the Geography of Innovation Shifts
The American Society of Clinical Oncology is the congress that makes markets in oncology. Data presented at ASCO shifts stock valuations, guides capital allocation decisions of major specialized funds, and signals observers where the frontier of clinical science lies. For decades, this frontier was American, with significant European contributions.
In 2026, for the first time according to analysis published by BioSpectrum Asia, therapies developed in Asia, predominantly in China, with notable Korean contributions, appear at the center of ASCO programming, not in “rest of the world” sessions. Data on ADCs targeting HER2, CAR-T cell therapies adapted to solid tumors, checkpoint inhibitors developed by laboratories in Suzhou or Shanghai occupy plenary slots and late-breaking abstract sessions.
This geographic shift is not anecdotal. It means that global licensing decisions will increasingly be made based on Chinese data. And that reference standards in several therapeutic categories will be set by Asian actors, with all the implications this carries for defining comparators, endpoints, and ultimately reference prices in negotiations with global payers.
François Godement, a recognized analyst of Sino-American competition for control of strategic technologies, has shown that the rivalry between Washington and Beijing focuses less on military budgets than on mastery of technology flows and associated capital: who owns patents, who controls standards, who captures the rents of a given industry. APAC biotech reproduces this pattern, already observable in semiconductors and post-quantum cryptography. The mechanism is as structural and economic: it hinges on market size and the depth of late-stage capital ecosystems.
Korea and Singapore do not cede their value because they are politically dominated by Beijing; they cede it because they lack the critical mass of private capital to reach global commercialization. These are two different dynamics, which reinforce each other.
We can also invoke here the reading by Acemoglu and Johnson on the capture of technological progress gains: when innovation produces value, who captures the rent depends on institutions governing intellectual property, financing, and market access. In the case of APAC biotech, these institutions structurally advantage those who own late-stage capital—namely, the United States, major pharmaceutical groups, and increasingly China.
Three Decades of Industrial Policy, a Lesson for Others
The Chinese case offers a clear lesson, even if its model is not reproducible as-is. China first accepted being the contract laboratory of Western pharma for two decades: it learned the standards, trained its researchers, built its regulatory infrastructure. Then it used these foundations to move up the value chain, progressively substituting proprietary innovation for contract manufacturing. China’s current out-licensing state is the result of a sequence, not a leap.
Other APAC economies have neither the domestic market size nor the state apparatus to reproduce this path. But they can draw partial lessons from it. South Korea has begun to understand this: several public organizations, including Korea Bio Foundation, have explicitly oriented their programs toward funding late-stage clinical phases to prevent assets from leaving too early. Singapore is exploring co-investment mechanisms with international sovereign wealth funds to lengthen asset retention. These efforts are real.
They remain modest relative to the mass of capital circulating in the global ecosystem.
Australia launched in 2024 a reform of its R&D tax credit regime to strengthen incentives for retaining IP rights on national territory. This is a path. It does not solve the fundamental problem: without a network of venture capital funds specialized in late-stage clinical phases, and without a pharmaceutical domestic market large enough to serve as a commercialization test, Australian molecules will continue migrating toward those who can finance them through approval.
We find here a tension observed in other technological sectors: the concentration of AI gains follows similar logic, where tools are distributed but rent centralizes among those who control scale-up infrastructures. In biotech, the infrastructure is called Phase III trial, global regulatory distribution network, and treasury to absorb ten years of losses before first sale.
The 2030-2035 Horizon
The forward-looking question is precise: if the current trend continues, will non-China APAC economies consolidate a position as structural incubators, or do they manage to change their relationship to IP rent before positions harden?
Two trajectories are plausible, and current data does not allow us to settle firmly.
In the first, venture capital concentration around China intensifies. Major pharmaceutical multinationals, seeking to reduce dependence on costly internal pipelines, continue sourcing early-stage assets from Korean, Australian, and Singaporean ecosystems, then develop them themselves or in partnership with Chinese groups that master regional scale-up. In this scenario, specialization hardens: Seoul and Sydney produce fundamental biology and proof-of-concept data, Suzhou and Shanghai produce large-scale clinical data, and global commercialization revenues go to the United States, Europe, and China. The signal to watch would be the evolution of the milestones-versus-equity ratio captured in APAC licensing agreements: if the share of equity captured by non-Chinese Asian cedants stagnates or declines, this scenario takes hold.
In the second trajectory, policies engaged in Korea, Singapore, and Australia begin producing their effects. Venture capital funds specialized in late-stage phases emerge, co-financed by sovereign wealth funds and institutionals. Clinical risk insurance mechanisms, experimented at small scale in Singapore, deploy more broadly. Regional coalitions, a form of APAC mutualization of development risk, could allow several medium-sized economies to share the costs of a pivotal trial that none can bear alone. The signal to watch would be the share of non-China biotech venture capital in the region: if it rebounds beyond 30% by 2028-2029, conditions for diversifying centers of gravity would be met.
Between the two, a third partial path deserves naming: assumed specialization in therapeutic niches where the size of the domestic market suffices to develop assets through local approval before negotiating global rights from a less unfavorable position. Oncology of cancers with Asian prevalence—gastric cancer, hepatocellular carcinoma—offer this lever to Korea and Singapore: local patient populations are large enough to validate indications without depending on an American trial. Several Korean laboratories are already exploring this path. The question of who controls data and standards in these niches joins similar issues in other technology domains with fragmented governance.
What we know for certain: the geography of global biotech innovation has changed. What we know less: whether the geography of rent will follow. The signals to watch through 2027 are readable: evolution of APAC out-licensing by country, share of late-stage capital outside China, proportion of agreements including equity versus mere milestones. These indicators will say whether Asian innovation remains a collective good redistributed toward major financiers, or whether countries that produce science begin durably owning its benefits.
Sources
- BioSpectrum Asia, “Asia’s Biotech Innovation Gains Momentum as Funding Models Become Increasingly Relevant”, June 2026, https://www.biospectrumasia.com/opinion/25/27910/asias-biotech-innovation-gains-momentum-as-funding-models-become-increasingly-relevant.html
- Bain & Company, Biotech in Asia-Pacific 2025, annual report
- BioBharat Funding Tracker 2026
- American Society of Clinical Oncology (ASCO), annual congress program 2026