China now takes 58% of licensing value as Washington and Beijing leave licensing untouched

Two things happened this week that matter for anyone doing business development in therapeutics. First, investment bank Locust Walk's Q3 2026 transactions report, covered by BioSpace on 21 October, showed Chinese companies accounting for 58% of global licensing deal value this year. Second, on 23 October, BioSpace reported a proposed US Treasury rule restricting American investment in Chinese biotech that leaves licensing out of scope.

The numbers

According to the Locust Walk figures, the US share of global licensing value has dropped to 26% in 2026, down from 56% in 2024. Chinese licensing deals are also bigger on paper, averaging $2.2 billion in total value against $1 billion for US companies, though upfronts make up a smaller share: 6% of total value for Chinese sellers and 10% for US sellers.

M&A looks very different. US biotech M&A reached $173 billion by the end of Q3, already ahead of the $151 billion for the whole of 2025, and US-headquartered companies accounted for 91% of 2026 M&A value. Chinese firms accounted for 1%.

"if you want to do a deal with a U.S. company for their lead asset, you're buying the company." Geoff Meyerson, CEO, Locust Walk, as reported by BioSpace

The policy backdrop

The Treasury proposal falls under the Comprehensive Outbound Investment Security (COINS) Act, which became law in December 2025 as part of the FY2026 defence authorisation bill. It would stop US persons investing in a range of biotechnologies from countries of concern, from small molecules and monoclonal antibodies to cell and gene therapies. A Treasury fact sheet cited by BioSpace says licensing deals are not covered, and the department is seeking comment on the rule.

It follows a move by China's Ministry of Commerce and Ministry of Science and Technology, reported on 19 October, to restrict transfers of ownership in five technologies, including cell and gene therapy and small nucleic acid drugs. That proposal also exempts licensing.

"We cannot restrict our way to success." John Crowley, CEO, Biotechnology Innovation Organization, as reported by BioSpace

What it means for BD teams

The practical effect is that the structure most pharma companies already use with China, licensing a single asset rather than buying a company, remains open from both sides. Gilead's purchase of PepStar's IL-23R programme this week is a live example. The Treasury proposal is still out for comment, so its final wording is worth watching for anyone structuring cross-border deals.