Chinese biotech firms received 20 times more in upfront payments than their Korean counterparts in the global technology-export market during the first half of this year.
According to JPMorgan on the 26th, Chinese companies secured $4.4 billion in upfront payments in global tech-export deals that paid upfronts of $50 million (73.3 billion won) or more in the first half of this year, accounting for 68% of the total of $6.47 billion. By contrast, Korean biotech firms' tech-export upfronts during the same period amounted to only about $220 million.
Notably, the figure for China counts only large deals with upfronts of $50 million or more, while the figure for Korea sums up all tech-export payments. On the same basis, the gap between the two countries is expected to widen further.
A striking point is the difference between the share of deals and the share of value. Chinese firms accounted for 42% of the total number of global tech-export deals this year, but 68% by value.
The reason Chinese firms had a higher share by value than by deal count is that they held many late-stage bio assets, giving each contract correspondingly higher value. According to JPMorgan, the median upfront for relatively early-stage assets such as platforms or discovery-stage candidates is $62 million, while Phase 2 clinical assets reach $363 million and Phase 3 clinical assets reach $700 million.
China is steadily building a foundation to consistently produce such late-stage clinical assets. According to China's National Medical Products Administration (NMPA), about 3,000 clinical trials were approved last year, roughly four times the number in Korea (783). Analysts say the abundant clinical volume is leading to an accumulation of late-stage pipelines.
By contrast, Korea's clinical base is shrinking. According to the Ministry of Food and Drug Safety, the number of clinical trial approvals for drugs developed by domestic pharmaceutical companies last year was 259, down 15% from the previous year (305).
Korean biotech firms complain that they struggle to raise funds in the early clinical stages, making it difficult to continue development through to late-stage clinical trials. Lee Seung-gyu, vice chairman of the Korea Biotechnology Industry Organization, stressed, "Korea's investment market tends to concentrate funding on initial public offerings (IPOs) or late-stage clinical phases, where investments can be recovered. Only when sufficient investment is also made in the early clinical stages can late-stage clinical assets be nurtured and recognized at a high value in the global market."
