Bristol Myers Squibb turns to Chinese company Hengrui to replenish its pipeline

One of America’s largest pharmaceutical companies said this week that it will work with a Chinese drugmaker to test some of its experimental drugs and discover new ones. This agreement could mark the next phase of coordination across continents.

Bristol Myers Squibb announced on Tuesday a potential multi-billion dollar partnership with one of China’s leading drugmakers, Hengrui Pharma. The companies will work together to develop about a dozen drugs, including four that Bristol discovered, and they will be sent to China for Hengrui to conduct the early-stage clinical trials. The two companies will also work together to develop new drugs.

“This is a big signal,” said Michael Baran, head of private investments at healthcare-focused hedge fund Affinity Asset Advisors and a former partner at Pfizer Ventures. He said U.S. drugmakers have worked with Chinese companies to develop drugs before, including Amgen’s collaboration with BeOne in 2019.

But Bristol’s deal is significant because it is more reciprocal, he said. That raises the prospect that more U.S. drugmakers could increasingly conduct early drug development in China to bring treatments to market more quickly, and that Chinese companies could begin to become global powerhouses.

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 | Picture Alliance | Getty Images

Bristol and Hengrui will each contribute assets and collaborate on developing new drugs, making China look less like a source of one-off molecules and more like a part of the pharmaceutical industry’s global research and development operating system, Baran said.

American and European biopharmaceutical companies like Pfizer, Merck And AstraZeneca are increasingly turning to China to find their next potential blockbusters. Just over half of big pharma’s licensing deals so far this year have come from China, up from 39% for all of last year and 5% in 2022, according to data from DealForma, which tracks deals in the industry.

The approach so far has mostly been for large drugmakers to license drugs that were discovered in China and undergo initial testing there, or essentially to bring experimental drugs with them from China. Some U.S. companies, such as Eli Lilly, have partnered with Chinese companies to discover and develop new drugs.

Bristol’s deal is different because several experimental drugs will be sent to China.

A worker checks the position of a feed tray in a pharmaceutical manufacturing truck at Hengrui Biomedical Industrial Park in Lianyungang, China, 13 December 2021.

Cphoto | Future publishing | Getty Images

Lieven Van der Veken, senior partner at McKinsey, said Bristol’s partnership differs from others in some key ways. It’s similar to a deal Hengrui recently struck with GSK that gave the British drugmaker access to some of Hengrui’s experimental drugs. But with this agreement, Bristol recognizes that it has drugs it can develop in China faster and for less money. And it’s about developing new ideas together with Hengrui.

“More and more companies are looking at this as a global mesh model, where you basically say China is not a threat or a separate source of innovation, we have to keep tapping into it,” said Van der Veken, global head of McKinsey’s QuantumBlack, AI. “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]-based investments. This is just the next level.”

Chen Yu, founder and managing partner of crossover fund TCGX, was an early leader in bringing Chinese drugs to the United States. He said the industry is now in a transformative moment, with more early work moving to China, where twice as many drugs can be studied in half the time and at a third the cost.

“For the past 25 years, U.S. investors and entrepreneurs have had the luxury of not having to think about anyone else,” Yu said. “That won’t be the future.”

By the end of the decade, Yu said, the idea of ​​researching early-stage drugs in the United States could seem as realistic as making the iPhone in the United States. He expects the early stages of drug development to eventually take the route of textile manufacturing, most of which will move to China.

Mid- and late-stage trials still need to be conducted in the U.S. to win approval from the Food and Drug Administration, he said, but conducting the first trials in China could help companies introduce drugs more quickly than they can today.

Some companies are already doing more of their early work in China. AstraZeneca is conducting most of its early trials for an experimental cell therapy in the country, said Ruud Dobber, who heads AstraZeneca’s biopharmaceuticals business. And he “absolutely” expects the British drugmaker to do more across its pipeline.

People disagree about whether China’s rise is helping or hurting the U.S. biopharmaceutical industry. Some, like Yu, say making drugs faster and cheaper will help the people who need them. Others, like industry advocacy group the Biotechnology Innovation Organization, argue that China’s rise could come at the expense of U.S. companies.

They agree on one point: China will remain a driving force in drug manufacturing.

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