LOCUST WALK NEWS

July 6, 2026 – In May 2026, at the annual meeting of the American Society of Gene and Cell Therapy (ASGCT), some twenty to thirty overseas attendees crowded around a small, several-square-meter Chinese booth — among them regulators and journalists. Their questions were blunt and pointed: “Is China’s GMP manufacturing compliant?” “Is the clinical data real?” Facing this mix of good-faith and hostile scrutiny, Liu Xiao of CSGCT carried 40 kilograms of documents with him — everything from GMP certifications to full clinical-trial records — trying to prove, quite literally by the weight of paper, the substance behind China’s innovation.

Just over a month later, on June 30, John Moolenaar, chairman of the U.S. House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party, sent letters of inquiry to five pharmaceutical giants — Merck, AbbVie, BMS, Pfizer, and Eli Lilly — demanding they disclose details of their clinical trials in China by July 17, alleging the trials could “enhance China’s military capabilities.” The committee noted that Merck had conducted 224 clinical studies in China since 2005, at least 31 of them in Xinjiang and 40 at military-affiliated hospitals; AbbVie had run more than 100 studies since 2007, with at least 17 in Xinjiang and 16 at military-linked institutions. In the wake of the news, shares of Lilly, Pfizer, Merck, and BMS fell nearly 2% in early trading, while AbbVie dropped 1%.

These two events, unfolding on the same timeline, capture the deepest paradox facing Chinese innovative drugs’ push overseas: geopolitical clouds are shifting from “background noise” to a “hard variable.” U.S. politicians are weaving a dragnet aimed at severing the ties that bind Sino-U.S. collaboration in drug R&D, clinical development, capital, and supply chains — even as the world’s attention on China has never been sharper, shifting from “why China” to “how China.” In the first half of 2026, the total value of Chinese innovative-drug business-development (BD) deals approached the $100 billion mark, a new record.

Yet in interviews VCbeat (动脉网) conducted with multinational pharmaceutical companies, Chinese biotechs, lawyers, and investment bankers, most expressed not pessimism but resolve in the face of geopolitical pressure. A white paper from the U.S. headquartered investment bank Locust Walk shows that even after the Most-Favored-Nation (MFN) drug-pricing policy took effect in May 2025, the value of regional licensing deals still grew in the second half of the year, from $4.0 billion to $4.5 billion — though the geography shifted, with the EU’s share declining and being offset by activity in China, Australia, Southeast Asia, and the Middle East. Jennifer Li, a global partner at Arthur D. Little — the 140-year-old consultancy founded in Boston — points out that the wave of big-ticket deals between multinational pharma and Chinese biotechs reflects basic market logic: a form of self-rescue in the face of the patent cliff. Yet China’s actual take from these deals remains modest, partly due to deal-structuring issues that leave Chinese companies without a proportionate return.

In fact, the “China Discount” label has never truly come off. Josh Resnick, a partner at RA Capital, notes that upfront payments account for only 5%–10% of total deal value. Morgan Stanley research similarly shows that only 25% of China’s out-licensed programs are in late-stage clinical development or commercialization, versus roughly 50% for U.S. pharma M&A targets — meaning multinational partners absorb most of the risk in global clinical development, regulatory approval, manufacturing, and commercialization, while domestic Chinese companies are typically left with only a small upfront payment.

This is not merely a commercial question — it is a deeper test of globalization capability. Under Washington’s gun sights, how can Chinese innovative drugs move from “passive discounting” to “active pricing”? How can Chinese innovative-drug BD deals command their true worth?

01  The Crackdown Escalates

From BINSA to the congressional letters of inquiry, the U.S. campaign against China’s biopharma sector is undergoing a “dangerous” escalation.

On June 2, 2026, Moolenaar and Representative Debbie Dingell jointly introduced the Biotechnology Investment National Security Act (BINSA), formally seeking to bring China’s biotechnology sector under the U.S. outbound-investment national-security review regime. The bill would add biotechnology to the review list under the Comprehensive Outbound Investment National Security Act (the COINS Act), covering drug R&D, biologics manufacturing, clinical research and development, pharmaceutical IP licensing, drug-discovery platform technology transfers, and joint ventures and equity investments of every kind.

Less than a month later, the June 30 letters of inquiry pushed the crackdown to a new level. This time, the target was no longer Chinese CXOs but the multinational pharmaceutical giants themselves. The letters demanded that the five companies disclose, in detail: a full list of clinical trials conducted in China, the specific institutions and locations involved, the use and flow of trial data, and any links to the Chinese military or government entities. The letters, however, stopped short of alleging that the companies had been proven to have done anything unlawful.

This shift in strategy is telling. From the 2024 BIOSECURE Act, which blacklisted Chinese CXOs including the WuXi group of companies, to the NIH’s 2025 move to cut off Chinese access to core databases, to an April 2026 amendment passed by the House Appropriations Committee that would bar the FDA from accepting clinical data from China and other countries — U.S. pressure has evolved from outright blockades to a three-pronged approach combining congressional investigations, legislative restrictions, and investment review, drawing in both domestic and multinational drugmakers and forcibly pushing the global biopharma supply chain toward “de-risking,” or even full decoupling, from China.

Ironically, the very companies under scrutiny are among the most active buyers of Chinese assets. Merck issued a standard official response emphasizing that patient safety and ethical integrity are the top priorities of its clinical research programs and that it follows all global guidelines. Pfizer confirmed receipt of the letter but declined further comment; AbbVie and Bristol Myers Squibb made no substantive response; Lilly said it was carefully reviewing the letter.

In the first half of 2026, Lilly struck major deals with Innovent Biologics ($8.5 billion) and Haisco Pharmaceutical ($3.054 billion); Pfizer signed a partnership agreement with Innovent Biologics ($10.5 billion) — its Yaoyou Pharmaceutical deal ($2.085 billion) had already closed the previous December — and BMS completed a $15.2 billion Co-Co (co-development/co-commercialization) collaboration with Hengrui Pharmaceuticals.

For Jennifer Li, this wave of blockbuster deals is simply the natural result of market forces — a form of self-rescue by multinational drugmakers confronting the patent cliff, particularly the roughly $354 billion cliff starting in 2028, as patents on blockbuster monoclonal antibodies like Keytruda and Opdivo near expiration. Multinationals urgently need to refill their pipelines, and Chinese innovative drugs — in ADCs, bispecific antibodies, GLP-1s, and other areas — have already achieved world-class competitiveness.

Public data show that total deal value in 2026 Q1 alone surpassed $60 billion, nearly half of the full-year 2025 total ($135.7 billion), with upfront payments of roughly $3.3–3.85 billion — up 229% year-on-year and a new record. By the end of June, according to incomplete statistics, first-half deal value had climbed to nearly $100 billion, with an average deal size of about $2.7 billion, a sharp jump from 2025’s average of $860 million.

At the recently concluded BIO International Convention in San Diego, partnering remained the core of the event, with barely an empty seat at any roundtable. According to industry media, 2,504 companies were seeking out-licensing deals, while only 986 were seeking in-licensing — yet 347 companies expressed specific interest in the China market.

On this, Liu Xiao observes that from the perspective of some politicians, opposing these deals is an important lever for holding back China’s rapid rise. But from the industry’s perspective, companies simply choose whichever asset works best and offers the best value.

The committee’s letter, in effect, is also grounded in an assessment of China’s development trajectory — framing its investigation within a broader industry context and claiming that through regulatory reform, state subsidies, and (at best) questionable ethical practices, China has become the cheapest and fastest place in the world to run early-stage human drug trials.

Beyond the deal figures cited above, there has also been a shift in clinical-trial data. In 2024, the U.S. share of global early-stage drug-development programs fell to roughly 37%, down from 48% in 2015, while China’s share over the same period rose from 8% to more than 32%.

02  Paper Wealth and Structural Discounts

But this apparent prosperity masks an awkward truth: the vast majority of these deals are licensing arrangements leveraged by relatively small sums of cash, not M&A. As Liu Xiao notes, last year’s total BD deal value reached $136.5 billion, yet upfront payments came to less than $10 billion.

In other words, most of the money is like a green plum hanging on a distant branch — visible, but not something that quenches your thirst.

Jennifer Li, drawing on frontline deal experience, points to an even harsher reality: more than 90% of companies receive only the upfront payment, with much of the milestone money never materializing. This assessment aligns closely with industry data: although total deal value in the first half of 2026 approached $100 billion, disclosed upfront payments totaled only about $5.5 billion — less than 6% of the total.

RA Capital partner Josh Resnick notes that upfront payments account for only 5%–10% of total deal value. Morgan Stanley research similarly shows that only 25% of China’s out-licensed programs are in late-stage clinical development or commercialization, compared with roughly 50% for U.S. pharma M&A targets.

And the “China Discount” label continues to follow these deals like a shadow.

So why are Chinese assets “sold cheap”?

Speaking to VCbeat, Geoff Meyerson, Co-founder and CEO of Locust Walk and Banyan Bio — an investment bank focused on global life sciences and investment firm focused on creating clinical stage newcos, respectively— says that a Chinese asset being “cheap” doesn’t mean its quality is poor. On the contrary, Chinese biotech is rising fast.

Meyerson, whose firm has led more than 80 global strategic transactions and travels frequently between the U.S. and China, believes China’s biotech rise is no accident but the product of several structural advantages stacking together: a systematic buildout by the government, from subsidies to lighter-touch regulation; a population base four times that of the US alongside a significantly lower cost structure; and an internationally seasoned talent pipeline “exported to the West, then brought back home.” Scientists returning from western education and major overseas pharma companies have brought world-class drug-design capabilities, enabling Chinese companies to move “quickly from idea to proof of concept.”

Drawing on his extensive deal experience, Meyerson argues that the root of the valuation discount on Chinese innovative drugs lies not in scientific quality but in systemic flaws in deal structuring, putting it bluntly: it’s because Chinese companies value their China rights more than their U.S. rights.

As for what “deal structure” actually means, one senior industry veteran explained to VCbeat that it generally spans several dimensions. The first is payment structure — essentially how risk is shared, and the most fundamental layer of any deal. A license-out transaction is rarely paid in full upfront; instead, it’s split across an upfront payment, R&D milestones, regulatory milestones, sales milestones, and sales royalties.

For example, suppose a Chinese biotech licenses out an autoimmune drug in a $2 billion deal. If structured with a $300 million upfront payment, $1.7 billion in milestones, and a 15% royalty, the biotech ends up with substantially more hard cash. If instead structured with just a $30 million upfront payment, $1.97 billion in milestones, and a 20% royalty — even though the headline total is the same $2 billion — the actual cash the company can access, its financing capacity, and its cash-flow position are all completely different. This is why U.S. dollar funds tend to focus closely on how much of a deal’s value is truly guaranteed cash.

The second dimension is territorial rights. Many cross-border deals are, at their core, an exercise in designing the scope of rights. A Chinese company can choose to license worldwide, license everywhere except China, or license only the U.S., Europe, Japan, or other specific regions while retaining commercialization rights in China. This is because the Chinese market itself may hold significant future value and is important for a Hong Kong IPO. For instance, a Chinese company might license out its U.S. and European rights to a multinational while keeping its China rights — allowing it to continue raising capital, or even pursue an IPO, down the road. This kind of structure is quite common.

The third is co-development. Sometimes a deal isn’t simply a sale of an asset but a joint development effort — for example, a Chinese biotech handles China-based clinical development and CMC manufacturing while the multinational partner runs the global Phase III trials, registration, and commercialization, with both sides sharing costs and future returns. These deals are considerably more complex than a straightforward license.

The fourth is profit-sharing. Some deals skip royalties altogether in favor of a profit-split model — for example, an agreement to split U.S. profits 50:50. This carries higher risk, but if the product succeeds, the biotech’s upside is also larger.

The fifth is co-promotion. For some products, after launch the Chinese company doesn’t exit entirely — instead, both sides co-market the product, or the Chinese team continues to handle medical affairs and keeps earning commercial returns. This, too, is an important part of deal structuring.

Meyerson explains to VCbeat that in the U.S. market, there’s an almost ironclad rule governing biotech–MNC negotiations: U.S. rights are the core driver of a company’s value. If a buyer wants the U.S. rights for a company’s lead asset, it must acquire the entire company at a premium. This equation — “U.S. rights equal core value” — forms the bottom line in every U.S. biotech negotiation.

In China, however, the logic is completely inverted. Because most Chinese companies have broad pipelines, giving up a single asset has limited impact on overall valuation, so founders often voluntarily hand over U.S. rights while keeping only the China rights. Meyerson notes that once a Chinese company gives up its U.S. rights at the outset, it becomes locked into a licensing-deal framework — and licensing deals are almost always more back-ended than M&A: smaller upfront payments, heavier reliance on milestones, and greater risk exposure.

Meyerson runs the numbers further: even if a Chinese asset’s price doubles within a licensing framework, it’s still significantly cheaper than having to acquire an entire U.S. company just to secure U.S. rights. “This isn’t a discount on scientific quality — it’s a discount for a strategic choice. It’s the structural discount you receive for being willing to give up your US rights.”

More notably, this “inversion of rights” reflects a kind of collective anxiety. Jennifer Li observes that when many Chinese CEOs face multinational pharma companies, their primary motivation isn’t to “maximize deal value” but to “make sure the deal gets done.” VCbeat has picked up on this same anxiety over nearly six months of visits to dozens of biotech companies.

“What if we push too hard and they walk away?” With dozens of companies holding similar assets lined up waiting to license out, the buyer’s-market dynamic has stripped Chinese companies of even their most basic negotiating leverage — many would rather accept a low-value deal that “gets the job done” than risk a negotiation falling apart.

Meyerson sums up this mindset as a fear among biotech founders that they’ll end up the last company without a partner. In China’s crowded, fiercely competitive pipeline landscape, this fear is magnified to the point where some companies license out assets without retaining any rights at all — “taking whatever they can get, then moving on to the next project.”

Jennifer Li further points out that this “rush to deal” dynamic is falling into a vicious cycle: both sides are often eager to close early in negotiations, but over time it becomes clear how hard true integration really is — particularly in R&D management. Whether going to the U.S., Australia, or Europe as a transitional step, Chinese companies still face major challenges, because the gap between their R&D management practices and MNC standards remains substantial.

This vicious cycle of “rushed dealmaking, difficult integration, and missed milestones” threatens to undermine the long-term development of Chinese innovative-drug companies. Many companies plan their pipelines around milestone payments they will never actually collect, only to be forced to change course midstream — a pattern that is deeply damaging to growth.

03  The Gap Between Selling a Pipeline and Going Global

The first stop for Chinese innovative drugs heading overseas is almost always the United States — but between simply selling a pipeline and truly building a global business lies an unfathomably deep capability gap.

Jennifer Li, drawing on years of cross-border deal experience, offers a sobering assessment: Chinese companies are not yet truly ready to go global. “In the first half of this year, we helped a Chinese company commercialize in the U.S., and the obstacles were significant. From our perspective, these obstacles are normal — but domestic companies, including founders and management teams, simply aren’t prepared for them.”

This lack of readiness doesn’t reflect a shortfall in scientific capability — rather, clear gaps remain in global commercialization capability, cross-border deal experience, understanding of international regulatory regimes, and the ability to communicate with capital markets.

A deeper issue lies in talent structure. Many Chinese biotechs hire executives who once worked at multinationals’ China operations, hoping to tap their international experience. But Jennifer Li points to a harsh reality: over roughly 30 years of multinational presence in China, very few executives ever truly reached the decision-making level or developed a deep understanding of how global operations really work. Many executives who rose through the ranks over the past two decades in particular held execution-level roles — experience that often proves of limited use once a company actually moves into overseas commercialization.

This echoes Meyerson’s own assessment closely. He repeatedly stresses that China’s biggest “shortcoming” — one with no easy fix beyond time and experience — is a genuine understanding of global development and U.S. commercialization. After all, the U.S. is the world’s largest and most valuable market, and very few Chinese companies have ever reached the commercialization stage there or run global clinical trials of their own.

In his view, if China’s ecosystem can master global development and U.S. commercialization capabilities, it will be able to compete directly and effectively with US biotech companies. Otherwise, many Chinese companies will remain confined to their domestic business — building commercial infrastructure in China and out-licensing ex-China rights to Western companies.

Amid this backdrop, Banyan BioInnovations has proposed a new possibility: a co-founder model. Banyan Bio draws on Locust Walk’s offices across life-sciences hubs — Boston, San Francisco, Tokyo, Shanghai, and Beijing — to source clinical-stage assets.

Unlike a traditional investment bank or financial investor, Banyan Bio positions itself as a co-founder alongside Chinese innovators to help secure fair value for all parties involved: the asset originator, the newco, and the newco’s investors.

For high-quality assets that don’t yet have global development data, Banyan Bio co-founds a U.S.-based NewCo with the Chinese company: the Chinese partner, as the asset’s original creator, receives an upfront payment, milestone payments, and royalties; Banyan Bio builds out the new U.S. entity with a full-stack team spanning clinical, regulatory, CMC, business development, and other G&A functions, invests its own capital, and raises the remaining funding from global investors. Crucially, both sides share founder equity in the NewCo.

The biggest highlight of this model is that it eliminates the “people risk” premium typically embedded in traditional NewCo deals. Eric Liu, Managing Director at Locust Walk and head of its China office, puts it plainly: in the mature U.S. capital markets, if you don’t understand the terms and you agree to them anyway, the market won’t protect you. Chinese founders negotiating directly with U.S. investors often find themselves at an information disadvantage simply because they’re less familiar with the rules of the game. Under the Banyan Bio model, this “dialogue deficit” between Chinese companies and U.S. capital can be converted into a collaborative approach that enables all parties to win.

Underpinning this model is Banyan Bio’s heavy upfront investment: from day one, it has built a 50-person team, integrating the former late-stage clinical co-development team of SFJ Pharma — once backed by Blackstone and Abingworth — led by Barbara White, MD, Co-founder and President of Banyan Bio, who brings decades of experience at multinational pharmaceutical companies. This means a Banyan Bio NewCo is equipped, from Day One, to run global Phase II and III trials.

Meyerson, who is also Co-founder and CEO of Banyan Bio, lays out its asset-selection criteria clearly: an asset must already have preliminary human efficacy data, must have been used in actual patients rather than just healthy volunteers, and must show some evidence of the potential to become a best-in-class or first-in-class drug. This positioning is described as being one step away from pharma validation. “If the product is too early in development, the timeframe for creating value becomes too long, and the risk becomes much greater. If the asset has too much data, it could and should be sold to MNCs. So what we’re really looking for is something that’s not too hot, not too cold — just right.”

04  Survival Rules in a Narrowing Window

With the letters of inquiry now aimed squarely at Merck, Lilly, Pfizer, and other U.S. drugmakers themselves, geopolitics is accelerating its shift from “background noise” to a “hard variable.”

Eric Liu corrects a common misconception: in the U.S., the structure of government is distinctive — a politician speaking out in a newspaper or on social media doesn’t automatically translate into policy. In practice, he notes, “looking at C-suite executives from major U.S. pharma companies, the number traveling to China hasn’t declined at all — it’s actually increased.”

Using the semiconductor industry as an example, Meyerson notes that an absolute blockade only breeds workarounds — and in biotech, those workarounds are far easier to execute than in semiconductors: incorporating in the Cayman Islands, setting up regional headquarters in Singapore, adjusting the U.S.–China investment ratio to a “50-50” split to support an “invented in America” claim, or even transacting with multinationals through offshore entities. “Some Chinese companies have already begun shifting their strategy — from a ‘90% China, 10% U.S.’ resource allocation toward a more balanced global footprint.”

Liu Xiao’s assessment: U.S. pharmaceutical companies are “more afraid of decoupling from China” than of the political fallout. The core logic here traces back to the advance of the U.S. Most-Favored-Nation (MFN) drug-pricing policy. Under this policy, large drugmakers face three choices: raise prices in Europe, cut prices in the U.S., or exit Europe. “Raising prices in Europe would break the entire European payment system, and cutting prices in the U.S. would sacrifice more than 80% of profit — so many companies are choosing to abandon their European strategy instead. As a result, European companies are now actually more anxious than American ones, and more eager to embrace China.”

Locust Walk’s 2026 Q2 white paper provides supporting data: even though the MFN policy took effect in May 2025, regional licensing deal value did not shrink in the second half of that year — instead, it grew from $4.0 billion in the first half to $4.5 billion. What did change significantly was deal geography: the EU’s share declined, offset by activity in China and other regions, including Australia, Southeast Asia, and the Middle East.

This geographic rebalancing points to a new opportunity for Chinese innovative-drug companies. Because the EU’s mandatory pan-regional launch requirements raise pricing risk, originators’ hesitation toward the EU has opened up space for regional deals involving China. Data show that in China-related regional deals in the second half of 2025, Chinese sellers accounted for about 50% of deal value, while EU companies accounted for 17% ($212 million) and U.S. companies for 26% ($326 million). This suggests China is becoming not just a source of assets, but also an increasingly common destination for regional deals — with multinationals and biotechs alike beginning to see China as an alternative market for hedging MFN-related risk.

Meyerson takes a clear stance: “I believe the U.S. will eventually recognize that it cannot out-compete China on clinical-trial efficiency and cost by building walls — the only real answer is to lower its own regulatory barriers and improve execution efficiency. Otherwise, global clinical resources will keep flowing toward China, and it’s ultimately American patients who will pay the price.”

Xu Rongyuan, an expert with VCbeat’s innovation ecosystem think tank and deputy director of the international investment committee at Guantao Law Firm, tells VCbeat that this wave of deals reflects, to some extent, a broader reality: the global BD window for Chinese innovative drugs remains open.

“In the near term, the global BD opportunity for Chinese innovative drugs actually remains in a highly favorable phase. That’s because major U.S. and European pharmaceutical companies are currently facing the patent cliff, while Chinese innovative-drug companies have already built a clear edge in R&D efficiency, clinical development speed, and areas like ADCs and bispecific antibodies — so global Big Pharma’s demand for Chinese assets remains strong,” Xu says.

Notably, Jennifer Li has observed a clear trend: “We’re now seeing solid deal activity for overseas assets beyond China too — including in Korea and Japan. Attention has gradually broadened out from being focused solely on China.”

BIO 2026 exhibition data bears this out: South Korea brought 341 companies, Japan 219, and Greater China 353 — the scale of participation among the three is now fairly close, whereas just a few years ago China’s presence far outpaced Japan and Korea. Global capital’s attention is shifting from “China dominance” toward “balanced allocation across multiple regions.”

That said, Jennifer Li believes the narrowing window needs to be viewed from two angles.

On the side of intent: MNCs and PE investors, seeking to diversify risk, don’t want all their assets concentrated in China — a preference driven both by industrial factors (supply-chain security) and political-economic ones (uncertainty in U.S.–China relations). On the side of reality, though, MNCs still don’t have many other options. Over the past decade, only China has built up a large enough pool of tradeable innovative-drug assets; no other country has developed supply at a comparable scale. At least through 2030, China will remain the primary source MNCs rely on to fill their pipeline gaps.

Still, the narrowing is a real, decade-long trend. What matters is whether, ten years from now, Chinese companies will have built genuine overseas operating capabilities of their own.

So what should Chinese biotechs do during this window?

Against this backdrop, drawing on the interviews above along with its own prior research, VCbeat distills the survival rules for Chinese biotechs into five key themes:

1. Courage. Chinese companies must have the courage to say “no” to U.S. buyers and retain their U.S. rights. Meyerson’s advice is blunt: “If you want to do a deal for one of our star assets, you need to do a global deal.” This requires a credible U.S. commercialization plan, a team and infrastructure built in the U.S., and above all, genuine confidence in what makes your asset different. “It takes real courage to do this, but it dramatically increases value. You have to believe they won’t walk away — because we genuinely have the best assets.”
2. Preparation. The more urgent the situation, the more preparation matters. Jennifer Li’s warning: “If you wait until after Phase II to negotiate, both your mindset and your bargaining power will already be weaker than earlier on.” Companies need to showcase their strengths by the end of Phase I in order to move quickly into target negotiations. Under the twin pressures cast by BINSA’s scrutiny and the window closing by 2028, positioning early, negotiating early, and locking in deals early matter more than ever.
3. Platform. Don’t just partner on a single product — partner on a platform. “Partnering on just one product doesn’t mean much. Partnering on a platform has lasting significance.” Platform-level licensing exports not just R&D capability but an entire innovation system — and in an environment where a single clinical trial can be politicized, platform-level partnerships are clearly more resilient to risk.
4. Dialogue. Step outside insular circles and truly integrate into the global ecosystem. The opacity of cross-border information flow can only be dissolved through sustained, face-to-face engagement. As Moolenaar works to stigmatize “cooperation with China,” this kind of dialogue matters more than ever — not to placate politicians, but to build genuine trust.
5. Long-term thinking. Don’t expect a ten-year healthcare-reform cycle to solve everything — build a 30-year capability for overseas operations. Jennifer Li’s assessment is sober and far-sighted: a BD deal is only a starting point. The real test is whether companies can, amid the storm and before the window closes, build their own global capabilities — not as the ones being priced, but as the ones setting the price; not merely as sellers of assets, but as genuine participants in the global rules of the game.

Liu Xiao remains convinced: good currency will inevitably drive out bad. Bad currency will no longer get a fair shot at competing with good currency, because the rules have already been set.

A line from Geoff Meyerson, offered at the end of the interview, may best capture the essence of this shift: “If you go to San Diego and all you do is grab drinks with the people you already know from China, you’ve basically wasted the whole San Diego experience.”

Once Chinese innovative-drug companies truly learn to “drink different drinks” on the global stage, the China Discount will naturally give way to a “global premium.” This isn’t an optimistic forecast — it’s a structural shift already underway.

As Geoff Meyerson puts it: “The train has already left the station. There’s no reversing the flow.”