The rise of licensing deals with Chinese biotechs has left U.S.-based companies and leaders wringing their hands, but the onslaught of deals has come as American companies have experienced a renaissance of M&A—an exit option not open to the Chinese startups.

China’s share of global licensing deal value has risen to 58% in 2026, according to a new report from global investment bank Locust Walk. The U.S., meanwhile, has fallen from 56% in 2024 to 26% this year.

But at the same time, M&A has taken off in the U.S. biotech sector. Total deal value has already hit $173 billion through the end of the third quarter, compared to $151 billion for all of 2025. Of the 2026 total, 91% of all M&A deal value was for U.S.-headquartered companies, compared to just 1% for Chinese firms. In terms of deal volume, 78% of companies were American across the 89 total deals so far, compared to 6% for China.

As American leaders search for ways to respond to China’s ascendent homegrown industry, these differences are key to reframing the debate about whether the U.S. is actually losing ground, Locust Walk CEO Geoff Meyerson told BioSpace in an interview.

Chinese biotechs “view licensing as a fundraising event, as comparable to doing an IPO, as comparable to doing a venture round,” Meyerson said. “The U.S. is very different. You would never sell a clinical stage asset that was still your main focus. You might sell an earlier asset to fund your lead asset, but you’re never going to do that for your lead.”

U.S. biotechs can raise a venture capital round, go public or sell. These funding opportunities are less open to Chinese biotechs that have mostly pivoted to seeking out milestone-heavy licensing deals as interest in the region has soared. Venture capital in particular has plummeted for China biotechs from the highs of 2020 and 2021, Meyerson noted. M&A exits are similarly harder to come by in the Asian country.

Nevertheless, the Chinese government took steps last week to tighten rules around biotech ownership transfers, particularly for technologies related to cell and gene therapy, small nucleic acid drugs and pathogenic microorganisms. With so few M&A deals happening with foreign buyers and an exception for licensing deals, the policy change isn’t expected to have much impact.

“There’s structural reasons why M&A in China is harder because of the government and because of all different constituencies,” Meyerson explained. “But fundamentally, if you want to do a deal with a U.S. company for their lead asset, you’re buying the company.”

So the trajectory of China-based licensing deals is dramatic—but only tells half of the story. When the M&A picture is brought into focus, Meyerson said the year has actually been pretty good for U.S. companies, too.

“M&A has been on a tear this year,” Meyerson said, pointing to that $173 billion total.

The spike is not surprising, Meyerson added. When President Donald Trump began his term, the macroeconomic factors began to change in favor of buyouts after tighter regulation under President Joe Biden. While Trump has continued his predecessor’s mission to lower drug prices, regulatory pressures overall have eased.

As Chinese companies push beyond “me-too” drugs and the country lays out a new five-year plan targeting a $522 billion–strong biotech industry by 2030, experts say more predictable funding and regulation could help the U.S. maintain its edge.

September 23, 2026

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8 min read

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Meyerson also noted that China and U.S. companies have major differences in how they assess licensing deal value. Chinese companies don’t mind accepting larger downstream milestones, as evidenced by Roche’s Monday deal with Hansoh Pharmaceutical worth $400 million upfront but a potential $15 billion on the backend. U.S. biotechs, on the other hand, want a bigger upfront.

Through Q3, Locust Walk found that China’s average total 2026 deal licensing value was $2.2 billion as compared to $1 billion for U.S. companies. But U.S. sellers had a larger portion of upfront payments, representing 10% of total deal value as opposed to China’s 6%.

“In the vast majority of deals, you never receive all the milestones,” Meyerson said. “That number gets the attention. My judgment is the upfront number is actually what matters because that’s what you can feed your development programs, not smoke and mirrors.”

Royalties also don’t tend to be a major factor in Chinese licensing deals, Meyerson added. “They don’t care as much about royalties as compared to the U.S. because it’s so far downstream. They’re trying to live to fight another day to have money to fund their next development programs.”