The Asia-Pacific is becoming a global hub for biotech and pharma innovation and drug discovery
Increasing aversion to risk in early-stage drug research and geopolitical tensions are driving U.S. and European companies to realign their R&D strategies. The Asia-Pacific is becoming a significant global hub for biotech innovation.
Although the August 1, 2025, deadline set by President Trump for imposing high tariffs on pharmaceutical imports to the U.S. passed without incident, he has since threatened to impose an initial “small tariff” on pharmaceuticals that will rise to 250%.
The president wants to incentivize drug companies to move manufacturing operations to the U.S. – which is struggling to remain competitive in the global biopharma market – and the longer than initially anticipated grace period is aimed at giving companies time to move manufacturing into the country.
Increasing risk-aversion to investment in early-stage drug discovery
Geopolitical tensions between the U.S. and China, and increasingly risk-averse investors, mean that biotech and pharma companies are switching strategies. At the same time, scientific research and drug manufacturing is facing economic pressure in the U.S. with tightened US National Institutes of Health (NIH) funding – particularly R&D and early-stage drug development.
One of the reasons for the growing success of bio-techs in the Asia-Pacific is that governments there are playing a critical role by helping to grow the ecosystem with public capital, develop infrastructure and incubator strategies, and implement talent recruitment strategies. It means that favorable IP regimes, tax incentives, and regulatory reforms are positioning the Asia-Pacific as an increasingly important player in the global biotech and pharma ecosystem.
The Asia-Pacific is becoming a hot spot for biotech innovation
It also means that global pharma companies are intensifying their focus on the Asia-Pacific, primarily through licensing deals, asset acquisitions, and partnerships with local ecosystems with the aim of incubating biotech start-ups.
China has long been the driver of biotech investment in the Asia-Pacific, accounting for over 75% of regional venture capital (VC)/private equity (PE) funding since 2019[1]. It is estimated that Chinese pharma companies could replace the dominance of U.S. and European companies within the next five years, particularly as the U.S. BIOSECURE Act continues to stall.
In China, government-linked partners and state-owned consortia are filling gaps created by the contraction of private equity activity. By adopting such a policy-aligned and implementing strategic mandates, China is becoming a significant player in next-generation R&D, such as mRNA therapeutics, cell and gene therapies, and antibody drug conjugates, as well as AI-led drug discovery, innovation, and design. As a result, international companies are increasingly drawn to licensing deals with Chinese biotech firms with the aim of reducing R&D and drug costs.
According to a report from Jefferys, in the first three months of 2025, 32% of licensing deal value went to Chinese biotechs, compared to 21% in 2024[2]. It notes that since 2022, Chinese biotechs have developed 639 first-in-class drug candidates, up 360% from 137 candidates between 2018 and 2021. This compares to 100% to 150% growth for first-in-class assets produced by companies in the U.S., Europe, and Japan.
China leads the way, but Singapore and South Korea are embedding themselves in the global biotech ecosystem
However, other countries in the region are also becoming hubs for biotech innovation. Singapore, for example, offers innovation, political neutrality, IP protection, legal transparency, and regulatory alignment. It also hosts regional headquarters for major pharma companies and attracts high-level scientific and regulatory talent.
The South Korean government, meanwhile, has committed $1.6 billion to support more than 1,200 drug development projects by 2030 through its Korea Drug Development Fund. Japan’s Bioventure Support Program has also committed $366 million early-stage capital, as well as critical infrastructure to support biotech start-ups. And India’s Biotechnology Industry Research Assistance Council provides early-stage funding and low-interest loans to biotech ventures.
Western biotech firms and big pharma are rethinking their innovation strategies with the region coming to the fore.
Pamir Consulting has been helping biopharma companies to understand and mitigate risks associated with the Chinese market for decades, as well as surrounding Asia-Pacific countries.
We can help you to navigate regulatory frameworks, protect IP, and develop entry strategies through our comprehensive range of research, strategy, and de-risk services. To find out more contact us today.
[1] https://www.bain.com/insights/empowering-biotech-innovation-in-asia-pacific/
[2] https://www.fiercebiotech.com/biotech/china-biotechs-reshaping-us-biopharma-outlicensing-deals-rise-11-jefferies-report
