U.S. biotech firms now license nearly a third of their drug candidates from China, raising investor concerns over dependency and execution risks.
U.S.-listed biotech companies allocated roughly a third of their 2025 licensing spending to drugs originating in China, according to Jefferies. Lower costs and faster regulatory approvals have made Chinese labs a dominant source of ready-to-license molecules, particularly in antibody-drug conjugates (ADCs), where they account for nearly 90% of global licensing activity.
This shift marks a departure from the industry’s historical reliance on domestic innovation. While licensing foreign candidates can accelerate development, it introduces risks, including execution challenges and potential discrepancies in clinical outcomes. Summit Therapeutics (NASDAQ: SMMT), for example, bet $500 million on ivonescimab, a cancer therapy licensed from China’s Akeso, without discovering the molecule itself.
Investors may face unexpected risks if U.S. biotechs fail to replicate foreign results, complicating valuations for stocks dependent on imported innovation.