Pharma Capital
Cross-Border Pharma in 2025: Capital, Control & the Rise of the NewCo Strategy
Global pharma is shifting fast—and so are the deal structures. From China’s licensing surge to the rise of dual-track NewCos, here’s what founders, VCs, and BD leaders need to know now.
Just wrapped a deep-dive masterclass on the evolving dynamics of US and China pharma—covering cross-border M&A, licensing trends, innovation hubs, and capital flows.
Here are the most actionable insights:
✅ 1. Big Pharma’s M&A Firepower Is Massive — But Disciplined
With ~$195B in cash on hand, pharmas like AbbVie, Pfizer, and Merck are ready to move. But they’re favoring smaller, targeted acquisitions over mega-deals.
In 2024, the majority of transactions were under $5B, focusing on autoimmune, oncology, and inflammation assets—suggesting a precision-led, pipeline-focused approach to dealmaking.
✅ 2. Biotech Valuations Remain Under Pressure
Nearly 1 in 4 biotech companies listed in the US are trading below their cash reserves.
This creates a buyer’s market for Big Pharma and VCs—rewarding those who can move fast with conviction and sharp diligence criteria.
Translation: Vulnerability can also be opportunity.
✅ 3. China: Innovation Engine & Out-Licensing Powerhouse
China’s biopharma market isn’t just catching up—it’s leading in key areas. In 2024 alone:
• $8.3B in upfront licensing value (20% of global volume)
• ProfoundBio acquired for $1.8B
• Curon’s $1.3B deal with Merck
• Massive early-stage rounds backed by Bain, RTW, and Atlas
What’s driving the momentum?
• Cost-effective biologic development
• Faster R&D timelines
• A wave of “US + China” investment theses
China’s companies are no longer the followers—they’re becoming co-leaders in global innovation.
✅ 4. Dual-Track BD: You Don’t Have to Pick a Lane
Founders and asset originators are exploring parallel paths instead of choosing between licensing and building.
The “NewCo” model allows teams to:
• Create a US-based company with China-developed IP
• License selectively while raising capital
• Retain more control and optionality
This dual-track approach increases leverage and keeps multiple strategic outcomes in play.
✅ 5. The Rise of the NewCo Strategy
Compared to traditional out-licensing, NewCo offers:
• US-based operations + governance
• Equity and board participation for Chinese originators
• Upside from licensing + future M&A
• Risk mitigation around IP and geopolitics
For VCs, this is a compelling structure—especially in a world where cross-border tension, capital controls, and regulatory change are the new normal.
✅ 6. US & China Still Dominate the Outlook
Despite macro uncertainty, the fundamentals remain strong:
• Global pharma CAGR ~7.9% through 2028
• China on track to surpass Japan as the #2 market
• Capital is flowing, but selectively—toward execution-ready teams and globally minded founders
🔚 Final Thought
If you’re in pharma, biotech, or cross-border investment—now is the time to think creatively.
M&A is heating up, licensing is getting smarter, and the most successful players will be those who understand how to build bridges across borders, boards, and business models.
Want to explore dual-track strategy, licensing models, or pitch readiness for cross-border VCs?