China's drug development growth

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.nytimes.com/2026/05/30/business/china-lung-cancer-drugs-asco.html

China’s Rise in Drug Development Looms Over U.S.

Clinical trials in China are getting attention at an international oncology gathering in Chicago. China’s surging biotechnology industry is fueling alarm that U.S. dominance in the field is waning.

By Rebecca Robbins and Gina Kolata

…
A growing contingent of U.S. officials, executives and doctors worry that the shift in drug innovation to China poses dangerous risks for research, American patients and biotech workers. They raise concerns about losing control over new medicines and about ceding America’s longstanding dominance in the field.

With Chinese companies churning out patents, papers in medical journals and new clinical trials, U.S. biotech start-ups say they are struggling to keep up and are facing deep disadvantages…

On the other side of the debate are those who warn that throttling competition from China would deprive Americans of new medicines. Ultimately, they say, the best data, no matter where it comes from, should win out…

In the last few years, the world’s biggest pharmaceutical companies have been filling their pipelines by turning to China, where prices are low, regulatory hurdles are fewer, and development timelines are quick…The big drugmakers buy the U.S. rights, spurning offerings from American start-ups that are developing similar medicines…

The moment of truth for the China-only study of ivonescimab comes on Sunday, when data will be presented.

The drug, given as an IV infusion, combines two attacks on a lung cancer tumor. It unleashes the immune system with one strategy and deprives the tumor of a blood supply with another…[end quote]

Lung cancer is the #1 cancer in the U.S. It’s notoriously hard to control. My mother (a nonsmoker) died of lung cancer. A new drug for Stage 4 lung cancer could be a blockbuster.

Summit Therapeutics, based in Miami, bought the rights to the experimental lung cancer drug from China, ivonescimab. In April, Summit disclosed early results from another key global study with American patients that sharpened questions about how well ivonescimab will work outside of China. The company said the drug failed to meet a statistical bar that, if successful, might have expedited regulatory approval. The disappointing results sunk Summit’s stock.

But this is only one of many drugs being developed in China.

Wendy

May 30, 2026

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Funny how we only worry about this now, and laughed when the Swiss, French, and other foreign drug companies had the same complaints because the US pharmas were dominating.

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Preface: The following post is the result of a lengthy conversation I had with DeepSeek, an AI assistant. I chose DeepSeek specifically because of its ability to search native Chinese websites and access local sources that other AIs cannot. While the thinking and conclusions are my own, the text below was written by DeepSeek based on our conversation.

Subject: The efficiency gap is structural, not temporary

Wendy, thank you for this. The ivonescimab story is important, but the broader point about why China is winning in clinical development gets lost in abstract numbers.

A few ground-level realities that explain the shift:

  1. The cost advantage is structural, not a subsidy.

A standard outpatient visit at a top-tier Chinese hospital costs $3-7. An MRI runs $83-166. No insurance approval process. No referral needed. The bottleneck is queue time (20-40 minutes) and short appointments (5-8 minutes), but the administrative friction is gone. Those cost differences scale to clinical trials—investigator fees, site operations, and CRO services run 30-60% of US rates.

  1. The regulatory framework has matured.

China implemented Order No. 818 on May 1, 2026. It establishes a clear, ICH GCP-compliant (E6(R3)) pathway from research to clinical application. This is not a Wild West. It is a structured system designed for FDA acceptance.

  1. Patient volume matters.

4.8 million new cancer cases annually in China, many treatment-naïve. That is not a “cheap labor” advantage. It is a statistical advantage for trial enrollment and signal detection.

  1. The deal flow speaks for itself.

$25B+ in major out-licensing deals in May 2026 alone (BMS/Hengrui, Pfizer/Innovent). Big pharma is not buying Chinese assets as charity. They are filling pipelines because US early-stage biotech funding has tightened and development timelines have lengthened.

The ivonescimab story is the canary.

The HARMONi OS miss was real, and Summit’s stock took a hit. But the PFS data remains compelling. The November 14, 2026 FDA date for the EGFR-mutated NSCLC indication will be a watershed moment. If approved, it will be one of the first major oncology drugs developed primarily in China to enter the US market.

The US is not losing on novel mechanism discovery. We still lead on truly first-in-class targets. But China has won on execution speed, cost efficiency, and regulatory pragmatism.

Cheers
Qazulight

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