DEVOURED
What the hell is happening in China?
China's biotech industry, characterized by early-stage biotechs with over 10 development candidates and cheaper drug development, is poised to surpass Western rivals within years, driven by a "breadth-first" strategy and less concern for IP protection given global patent visibility.
What: Chinese biotechs, having historically lacked late-stage resources, focus on developing numerous candidates simultaneously. This approach, combined with the relative ease and lower cost of drug development in China, is creating a highly competitive landscape that is eroding the "China middleman" playbook for Western VCs like those who successfully flipped assets from Summit Therapeutics, Aiolos Bio, and Kailera.
Why it matters: The Chinese biotech landscape is maturing rapidly, forcing Western biotechs to innovate truly novel therapies rather than "me-too" drugs, as the sheer volume and speed of Chinese development will make incremental bets financially unviable. The perception of IP protection in China is also shown to be largely misguided, as patents are public well before clinical trials. This suggests a global shift in biotech R&D dynamics.
Takeaway: Western biotech companies should prioritize genuinely novel therapeutic directions over incremental advancements to remain competitive against the rapid and cost-efficient development cycle in China.
Deep dive
- Chinese biotechs employ a "breadth-first" strategy, developing 10+ candidates simultaneously, due to cheaper development costs and past limited access to late-stage resources.
- This aggressive approach makes "me-too" or "me-better" drugs from Western companies harder to exit, increasing competition for established targets like GalNAc siRNAs and antibodies.
- The "China middleman" playbook, where Western VCs acquire Chinese assets for later-stage trials, is becoming outdated as big pharma now has direct access.
- Manufacturing drugs in China is not required for trials there, though Chinese QC standards must be met.
- IP protection concerns regarding clinical trials in China are largely overstated, as patents are public early, and Chinese biotechs are adept at working around them.
- Chinese drugs still target US markets for exits and approvals due to China's single-payer system and a small rare disease market.
- The bar for "novel" science is higher than ever; "in vivo CAR-Ts" and gene/epigenetic editing are no longer considered novel enough for significant differentiation.
- Investigator-initiated trials (IITs) remain a fast and cheap way to get first-in-human data, though Order No. 818 (May 1, 2026) limits them to Tier 3A hospitals.
- The FDA has shown emerging precedents for accepting IIT human data as part of IND filings, providing an additional incentive for early clinical work in China with proper FDA communication.
Decoder
- GalNAc siRNA: A type of small interfering RNA (siRNA) chemically modified with N-acetylgalactosamine (GalNAc) to enhance liver-specific delivery for gene silencing.
- PD-1 x VEGF bispecific antibody: A type of antibody engineered to bind to two different targets (Programmed Death-1 and Vascular Endothelial Growth Factor) simultaneously, often used in cancer immunotherapy.
- CDMO: Contract Development and Manufacturing Organization, a company that provides comprehensive services from drug development to manufacturing for pharmaceutical companies.
- IIT (Investigator-Initiated Trial): A clinical trial initiated and managed by a researcher rather than a pharmaceutical company.
- IND (Investigational New Drug): An application submitted to the FDA to obtain permission to conduct human clinical trials with an experimental drug.
- CMC (Chemistry, Manufacturing, and Controls): Information related to the manufacturing process, quality control, and testing of a drug product.
- GLP-tox (Good Laboratory Practice Toxicology): Non-clinical laboratory studies conducted under Good Laboratory Practice regulations to assess the toxicity of a drug.
- CAR-T (Chimeric Antigen Receptor T-cell): A type of immunotherapy that involves engineering a patient's own T cells to recognize and kill cancer cells.
Original article
China has several early-stage biotechs with over 10 development candidates. It is much easier to develop drugs in China. Chinese biotechs lacked access to later-stage development resources in the past, so they have always leaned toward a breadth-first strategy. This has resulted in an industry with heavy competition that will likely surpass its Western rivals within the next few years.
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