China’s share of global licensing deal value has risen to 58% in 2026, according to a new report from Locust Walk, while the U.S. share has dropped from 56% in 2024 to 26% this year. That shift has fueled concern that Chinese biotechs are taking control of a larger part of the global partnering market.
But the same report points to a counterweight in mergers and acquisitions. Through the end of the third quarter, total biotech M&A deal value had already reached $173 billion, versus $151 billion for all of 2025, and 91% of that 2026 value involved U.S.-headquartered companies, compared with 1% for Chinese firms. By volume, 78% of companies across 89 total deals so far were American, versus 6% for China.
The deal split
Locust Walk CEO Geoff Meyerson told BioSpace that the apparent imbalance in licensing needs to be read alongside the different financing systems available in each market. In his view, Chinese biotechs often treat licensing as a fundraising event comparable to an IPO or a venture round, while U.S. companies generally do not out-license a clinical-stage lead asset that remains the main focus of the company.
That distinction matters because U.S. biotechs still have multiple routes to capital and liquidity: venture financing, public listings and company sales. Meyerson said those alternatives are less available to Chinese startups, which have increasingly turned to milestone-heavy licensing deals as investor interest in the region has grown. He also said venture capital has fallen sharply for China biotechs from the highs of 2020 and 2021, and that M&A exits are harder to secure there.
The structure of deal terms also differs. Through Q3, Locust Walk found China’s average total 2026 licensing deal value was $2.2 billion, compared with $1 billion for U.S. companies. But U.S. sellers received a larger upfront share, with upfront payments representing 10% of total deal value versus 6% for China. Meyerson’s view was that this difference affects how much of the headline value is practically useful, because upfront cash can fund development programs immediately, while downstream milestones are uncertain.
Why the U.S. still looks strong
Meyerson said 2026 has been a strong year for U.S. companies once buyouts are included. He described M&A as being on a tear and said the increase was not surprising given changing macroeconomic and regulatory conditions after President Donald Trump began his term. While Trump has continued President Joe Biden’s effort to lower drug prices, Meyerson said overall regulatory pressure has eased in ways that favor acquisitions.
He also argued there are structural reasons M&A is harder in China, including the role of the government and other constituencies. That framework helps explain why large licensing totals in China have not been matched by comparable buyout activity.
Last week, the Chinese government tightened rules around biotech ownership transfers, particularly for technologies related to cell and gene therapy, small nucleic acid drugs and pathogenic microorganisms. Meyerson said the move is not expected to have much impact because there are already so few M&A deals with foreign buyers and licensing deals were excepted.
A recent example of how Chinese licensing economics can swell reported totals came in Roche’s Monday agreement with Hansoh Pharmaceutical, which carried $400 million upfront and a potential $15 billion on the backend. The signal for investors is that licensing value alone may overstate near-term financial strength if more of the package sits in long-dated milestones, while U.S. biotech resilience in 2026 is showing up more clearly in realized M&A exits.
