How Chinese Financing Is Helping US and German Biotechnology

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EU and US Biotech Meets China’s Health Silk Road in Billion Dollar Deals 

By Chris Devonshire-Ellis 

The December issue of Asia Investment Research has just been published and features six case studies about how Chinese minority equity investments are becoming a new phenomenon in China’s outbound investment strategy.

Asia Investment Research is jointly produced by China Investment Research and Dezan Shira & Associates.

In the current issue, two unique case studies in Biotechnology collaboration – between ​China and the United States and China and Germany – are discussed.

BeiGene and Amgen

To help develop the Amgen (SA) Chinese oncology portfolio, in January 2020, Amgen closed its strategic collaboration with BeiGene, designed to significantly accelerate Amgen’s plans to expand its oncology presence in China. BeiGene is a commercial stage research-based oncology company with an established and highly experienced team of 1,500 personnel in China.

The key terms of the collaboration were:

  • Amgen acquired a 20.5% stake in BeiGene for approximately US$2.8 billion in cash. This represented a purchase price of US$174.85 per BeiGene share, a 36% premium to BeiGene’s 30-day volume-weighted average share price prior to the initial announcement. In addition, one executive from Amgen joined BeiGene’s board of directors.
  • BeiGene agreed to commercialize XGEVA® (denosumab), KYPROLIS® (carfilzomib) and BLINCYTO® (blinatumomab) in China, during which time the parties will equally share profits and losses.
  • Amgen and BeiGene agreed to collaborate to advance 20 medicines from Amgen’s innovative oncology pipeline in China and worldwide. BeiGene will share global research and development costs and contribute up to US$1.25 billion to advance these medicines. Amgen will pay royalties to BeiGene on the sales of these products outside of China, with the exception of AMG 510, Amgen’s first-in-class KRASG12C inhibitor.
  • Of the 20 oncology medicines in development, BeiGene will assume commercial rights in China for seven years after launch for those that receive approval in China. After this time, BeiGene will retain rights to up to six of these products in China, excluding AMG 510, while rights on remaining products revert to Amgen. Amgen and BeiGene will share profits in China equally on these products until the rights revert to Amgen, after which Amgen will pay royalties to BeiGene on sales in China for five years.
  • Amgen agreed to continue to commercialize its non-oncology product portfolio in China. A year later, in January 2021, Novartis signed a strategic collaboration agreement to in-license tislelizumab from BeiGene in major markets outside of China, accelerating the potential for Novartis to enter the large and growing checkpoint inhibitor field. Under the terms of the agreement, Novartis obtained the development and commercialization rights to tislelizumab in the United States, Canada, Mexico, the EU, UK, Norway, Switzerland, Iceland, Liechtenstein, Russia, and Japan in exchange for an upfront payment of US$650 million plus royalties and milestone payments (which ultimately could reach US$1.55 billion). BeiGene will retain the rights to tislelizumab in China and other countries. As of November 15, 2021, BeiGene’s share price was HK$226.8 a share, a 29.7% increase since its initial investment in January 2020. The current share price represents a value of US$7.2 billion to Amgen – a valuation uplift of US$4.5 billion in less than two years.

BioNTech and Fosun Pharma 

In May 2021, BioNTech (Germany) and Fosun Pharma (China) announced a strategic partnership in which both companies agreed to jointly conduct clinical trials of BNT162 in China, leveraging BioNTech’s proprietary mRNA vaccine technology and Fosun Pharma’s clinical development and commercialization capabilities in China. This has produced a JV-enhanced China based vaccine manufacturing facility.

The major terms of this were:

  • Fosun Pharma will commercialize the vaccine in China upon regulatory approval, with BioNTech retaining full rights to develop and commercialize the vaccine in the rest of the world.
  • Fosun Pharma agreed to pay BioNTech up to US$135 million in upfront and potential future investment and milestone payments, while the two companies will share future gross profits from the sale of the vaccine in China. As a result of this agreement, vaccine manufacturing within China will be increased by one billion doses per annum, from an expected base of three or more billion in 2021. At this time, BioNTech also announced that it would establish a Singapore based plant and an Asian regional operation – after it has been working with Hong Kong and Macau for the past year.

BioNTech’s market capitalization increased from circa US$30 billion in April 2021 to slightly over US$80 billion in August. In light of the declines in Asian biotech shares, current market capitalization (as of November 15, 2021) of circa US$58 billion still represents a 100% share appreciation in only six months.


These studies illustrate the gap between political and commercial perceptions of both China and the Belt and Road Initiative. The reason for the Chinese involvement is a two-way street – Chinese investors gain access to Western biotech, while the US and German (in these two cases) gain access to both the Chinese, and potentially the RCEP markets as well.  However, they also show through these examples how Chinese investments – which includes investments along the Belt and Road Initiative – are becoming more sophisticated in nature, both in terms of the new technologies that are being invested in as part of China’s national strategic development plans, but also in the nature of the partnerships involved.

Through these, China can acquire tomorrow’s requirements today and assist in bringing these to the China market. They also represent an opportunity for significant return on investment for overseas investors looking to partner with China to help them drive and fly these new tech concepts into the China market and beyond. China’s own domestic market continues to expand, and its number of middle-class consumers is on track to reach 1.2 billion by 2030.

China has also joined the RCEP Free Trade Bloc, a market representing 30% of global GDP. Trade commences within this region from January 1, 2022, just two weeks away.

A complimentary download to the current full issue of Asia Investment Research, titled ‘Real Value In China Minority Equity’ can be accessed here

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