
Asia-Pacific is rapidly becoming a global hotbed for next-generation modalities, from mRNA therapeutics to AI-driven drug discovery, attracting significant investment and innovation.
However, this growth is occurring against a backdrop of intensifying geopolitical tensions, particularly between the US and China, which are compelling biotech firms and global pharmaceutical companies to adopt sophisticated strategic restructuring and diversification.
Explosive Growth in Advanced Therapeutics and AI
As per a new report by Bain & Company, titled “Empowering Biotech Innovation in Asia-Pacific”, the region has seen a surge in investment in advanced therapeutics. Modalities such as mRNA, cell and gene therapies (CGTs), and antibody-drug conjugates (ADCs) are gaining significant traction, particularly within Chinese biotechs. A prime example is SystImmune’s US$8.4 billion ADC co-development and licensing deal with Bristol-Myers Squibb.
Also Read: Asia Pacific redefines biotech: Global pharma’s strategic shift from West to East
AI-enabled platforms are also revolutionising early-stage drug discovery, promising to streamline processes and accelerate development. Insilico Medicine’s FDA investigational new drug (IND) approval for its AI-designed MAT2A inhibitor, followed by a US$110 million raise in 2025, underscores the viability of these technology-led approaches.
Chinese pharmaceutical giant Jiangsu Hengrui Pharmaceuticals (Hengrui) has partnered with Paris-based Iktos, leveraging its proprietary AI-driven molecular design platform to enhance the speed and efficiency of hit-to-lead and lead optimisation processes.
China’s biotech dominance and potential
China has long been the engine of biotech investment in Asia-Pacific, accounting for over 75 per cent of regional venture capital (VC) and private equity (PE) funding since 2019. Its strong pipeline includes mRNA therapeutics company Abogen, which raised over US$1 billion in PE/VC funding, and clinical-stage biotech LaNova Medicines, which secured a US$600 million licensing agreement from AstraZeneca for a potential first-in-class ADC.
After decades of strategic focus and streamlined regulatory processes, these innovations have positioned China as a global biotech standout, with the potential to challenge – and even surpass – Western players in first-in-class assets over the next five years.
Navigating geopolitical headwinds
Despite China’s innovative prowess, rising tensions with the US are creating uncertainty for cross-border collaborations and access to Western capital markets. The proposed US BIOSECURE Act, which flagged companies like WuXi AppTec and BGI Genomics as potential national security threats, has led many US pharmaceutical firms to rethink their reliance on Chinese contract research organisations (CROs) and contract development and manufacturing organisations (CDMOs). Although the Act has stalled, the impetus for geographic diversification to hedge against geopolitical risk is palpable.
In response, Chinese biotechs are strategically adopting offshore “NewCo” structures and IP-splitting strategies to manage international risk.
Also Read: Asia-Pacific governments step in as private biotech investors pull back
Examples include Hengrui’s licensing of its GLP-1 portfolio to US-based Kailera Therapeutics and Keymed Biosciences’ formation of Belenos Biosciences with OrbiMed. Firms are also shifting global headquarters and restructuring ownership, as seen with Legend Biotech expanding its US operations and reducing GenScript’s voting power.
In this complex environment, biotech firms’ success will increasingly hinge on scientific excellence, regulatory fluency, funding adaptability, and astute cross-border strategic positioning.
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