China’s pharmaceutical industry, now the second-largest contributor globally to new drug development, is harnessing artificial intelligence to accelerate innovation and drive a strong surge in high-value transactions during 2026.
- China accounts for about 30% of new drugs under development worldwide.
- 81 pharma deals signed by mid-2026 equal 80% of last year’s total.
- AI-driven collaborations boost drug discovery and clinical trial simulations.
What happened
In the first half of 2026, China’s pharmaceutical sector achieved an unprecedented $110 billion in cross-border deals for innovative drugs, marking a significant milestone in global pharma partnerships. This surge includes 81 deals covering ten therapeutic areas such as oncology, metabolic diseases, immunology, and neurology, with buyers primarily from the US, UK, France, and Italy. The volume and value of deals by June 30 represented around 80% of the full-year total for 2025, reflecting accelerated momentum.
Notably, companies like CSPC Pharmaceutical Group and Hanx Biopharmaceuticals have initiated collaboration agreements leveraging AI technologies. CSPC is working with AstraZeneca to develop small nucleic acid drug candidates through its proprietary AI molecular design platform, with potential milestone payments exceeding $1.7 billion. Similarly, Hanx Biopharmaceuticals has partnered with Swiss AI firm TwinEdge Bioscience to utilize AI-driven virtual patient replicas for enhancing early drug efficacy evaluation and optimizing clinical trial design for its blood cancer antibody drug candidate.
Why it matters
China’s pharmaceutical industry now represents about 30% of all new global drug development ventures, second only to the leader worldwide, underscoring its rapid rise as a global hub of medical innovation. This transformation is supported by regulatory efforts and enhanced innovation efficiency, which improves the competitiveness of Chinese R&D outputs. Using AI for drug discovery and development not only accelerates timelines but also reduces costs and risks associated with traditional preclinical and clinical processes.
The integration of AI technologies into drug development pipelines helps companies simulate complex biological responses, better predict individual patient reactions, and refine candidate selection before expensive clinical trials. These capabilities are particularly critical for advancing complex therapies in oncology and immunology where patient heterogeneity greatly impacts outcomes. By bridging cutting-edge AI with pharmaceutical research, China strengthens its position as a major player in the global biopharma ecosystem, attracting diverse international partnerships.
What to watch next
In addition, further cross-border deal announcements involving AI-powered drug development platforms are expected as Chinese firms deepen partnerships with Western biopharma companies. Tracking investments in AI technologies and the emergence of new AI-based startups within China’s life sciences sector will provide insights into evolving competitive dynamics and innovation trends shaping the global pharmaceutical landscape.