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Global Pharma in 2024: The Surge of East-West Collaboration

The pharmaceutical landscape is undergoing a significant transformation, with cross-border collaborations between Asian and Western companies taking center stage. This trend is reshaping drug development and market access strategies on a global scale.

In 2023, oncology partnerships led the charge, amassing an impressive $86.1 billion in total announced deal values. Not far behind, biologics and complex molecules accounted for $80.3 billion. These figures underscore the industry’s pivot towards high-value, specialized treatments.

The burgeoning GLP-1 drug market exemplifies this shift. China is poised to become a major player, with estimates suggesting the market size could reach RMB40 billion by 2030, including RMB25 billion from obesity indications alone. This potential has catalyzed the development of over 100 GLP-1 pipeline drugs in China.

One standout deal in this space is Huadong Medicine’s development of a generic version of the market-leading Semaglutide, expected to launch in 2025. Meanwhile, Innovent’s Mazdutide is on track to become China’s first innovative GLP-1 anti-obesity drug, also slated for a 2025 launch.

The antibody-drug conjugate (ADC) sector saw particularly noteworthy activity. In October 2023, Daiichi Sankyo and Merck inked a landmark deal for three ADC programs, featuring a $4 billion upfront payment and a potential total value of $22 billion. This single deal significantly boosted the sector’s performance, with ADC licensing deals in 2023 reaching a record $4.6 billion in total upfront cash and equity across 35 deals.

In contrast, cell and gene therapy deals saw a decline. Total upfront payments fell to $900 million in 2023 from $1.3 billion in 2022, spread across 67 deals compared to 69 the previous year. This shift suggests a market preference for more established technologies like ADCs over newer, potentially riskier modalities.

A notable trend in deal stages has emerged. Big pharma is increasingly focusing on later-stage assets to mitigate risk. In 2023, there were 51 deals for platforms and discovery programs, down significantly from 84 in 2022. Conversely, Phase I deals nearly doubled to 15 in 2023. This shift is reflected in the median upfront payments, with Phase II assets commanding $405 million in 2023, up from $100 million in 2022.

On the M&A front, the fourth quarter of 2023 saw robust activity despite fewer deals. The quarter closed with $37.6 billion in upfront M&A value across 27 transactions. For the full year, biopharma M&A totaled $128.8 billion across 112 acquisitions. Notable fourth-quarter deals included AbbVie’s acquisitions of ImmunoGen and Cerevel Therapeutics.

As the industry evolves, companies are also exploring new markets. Chinese firms are increasingly looking to ASEAN and Middle Eastern countries for growth opportunities, while Indian companies maintain their focus on the U.S. market, particularly in complex generics.

This shifting landscape presents both opportunities and challenges. Regulatory environments remain a key consideration, with China normalizing post-anti-corruption probes and Indian firms navigating U.S. FDA audits. Despite these hurdles, companies successfully bridging East and West will be well-positioned to lead the next wave of pharmaceutical innovation.

As we move through 2024, it’s clear that the future of pharma is increasingly global, with cross-border collaborations driving innovation and expanding market access. The companies that can navigate this complex, interconnected landscape will likely emerge as the leaders in this new era of global pharmaceuticals.

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