Hengrui Medicine, Innovent Biologics, and Haisco Pharmaceutical: Bundling pipelines in out-licensing deals and Co-Co partnerships with global pharma giants, reshaping industry norms.
Hengrui Medicine, Innovent Biologics, and Haisco Pharmaceutical are among the Chinese biopharma leaders reshaping industry norms. In 2025, the total value of out-licensing deals for Chinese innovative drugs exceeded US$130 billion, reaching a record high. As of now in 2026, this figure has surpassed US$80 billion, exceeding half of the full-year total for 2025. However, more noteworthy than the transaction volume is the shift in the out-licensing model for Chinese homegrown drugs. Over the past year, “bundled out-licensing” has evolved from an occasional event into a normalized phenomenon. While not yet industry-wide, it has become a new standard for top-tier players. As early as July 2025, Hengrui Medicine entered into a bundled partnership with GlaxoSmithKline (GSK) totaling US$12.5 billion. Under the terms of the agreement, the two parties will co-develop HRS-9821 (a potential best-in-class PDE3/4 inhibitor) and up to 11 other innovative projects, covering therapeutic areas such as respiratory diseases, immunology, and oncology.
Compared with the traditional single-product License-out model, the significance of this deal lies not only in the amount but also in its structure: multinational corporations (MNCs) are no longer just purchasing a single mature candidate drug; they are betting on the early-stage R&D system and sustained project generation capability of Chinese biopharma companies. In the past, out-licensing of Chinese innovative drugs was primarily focused on single-asset deals, but this model has certain limitations. First, as competition intensifies around popular targets and technology platforms, the premium for homogeneous assets continues to decline. Second, with a shallow level of collaboration, it is difficult for domestic companies to leverage the technology, clinical, and commercial resources of global giants to empower their own R&D systems and maximize long-term value. As the marginal returns of single-asset business development (BD) narrow, domestic companies naturally opt for more advanced out-licensing models. Thus, License-out has evolved into Co-Co (Co-Development and Co-Commercialization) and “bundled out-licensing” models. Behind this shift is a transformation from “product thinking” to “platform thinking” among domestic biopharma companies: by bundling pipelines, they maximize the realization of long-term R&D accumulation, monetizing the R&D platforms and target-discovery capabilities built over many years rather than depleting the value of a single product.
There are multiple models for out-licensing innovative drugs, including independent overseas development, License-out, the NewCo model, and the Co-Co model. The recently emerging “bundled out-licensing” model is undoubtedly a high-quality approach suited to the current state of the industry, but it also has obvious shortcomings and is not the ultimate direction for the globalization of Chinese innovative drugs. On the one hand, the pipelines in bundled deals are primarily early-stage innovative projects. Due to high uncertainty and naturally low success rates, large-scale bundling can easily create an illusion of “pipeline prosperity,” with real value requiring time to validate. Moreover, this model carries the risk of “pipeline dilution.” The bundled price is often a “portfolio discount,” diluting the true value of individual assets. More importantly, in bundled transactions, the MNC is often the sole buyer, holding strong bargaining power. The assets, which represent the core innovation reserves of domestic companies for the next 3-5 years, may very well be “sold too cheaply.”
On the other hand, if domestic companies rely excessively on BD, the problem of “hollowing out the core business” may emerge. Companies may treat bundled BD as a primary financing channel rather than a natural extension of R&D capability. Once the pace of BD slows down or MNCs adjust their collaboration strategies, the lack of self-sustaining R&D capabilities will become apparent. After all, MNCs select bundled projects according to their own global strategies, making the R&D rhythm of domestic companies easily subject to external control. In the future, if MNCs adjust R&D priorities based on their strategic needs, the R&D pace of domestic companies will inevitably be affected, putting the milestone payments that constitute a significant portion of revenue at risk of not being realized. If the endpoint of “bundled out-licensing” is to become an R&D department of an MNC, then this model inherently has a ceiling.
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