There’s a schism in America’s drug business, playing out in punchy direct messages, feisty group chats, and the occasional heated in-person exchange.
The problem is China. Fledgling startups and pharmaceutical giants alike are addicted to Chinese drugs, filling their pipelines with would-be blockbusters developed at enviable speed and bought on the cheap. They’ve spent some $60 billion on Chinese molecules in the first three months of 2026 alone, according to state figures. That’s on pace to double last year’s total, which was already 10 times larger than the one from 2021.
No one disagrees that it’s good business. And more drugs moving swiftly through development means hope for patients around the world desperately awaiting new medicines.
But, according to more than a dozen interviews with industry executives and investors, the question of whether to partner with Chinese firms — or see them as rivals — is tearing biotech apart, pitting peers and partners against one another and souring relationships in an otherwise close-knit corporate community.
Two advocacy groups are demanding the United Kingdom revoke regulations at the heart of a new trade agreement with the U.S. over concerns the deal will allow outsiders to influence official decisions about the cost-effectiveness of medicines. And if the government does not comply, the groups are readying legal action.
Under the trade agreement that covers pharmaceuticals, which was finalized last month, the Trump administration committed to impose zero tariffs on medicines exported from the U.K. for at least three years. The deal is significant because it would make the U.K. the only country with tariff-free access for medicines to the U.S. market.
In return, the U.K. government took steps to appease the pharmaceutical industry, which is a key part of its economy, by pledging to increase spending on medicines from 0.3% of GDP to 0.35% by 2028 and then to 0.6% by 2035. At the same time, the U.K.’s National Health Service will increase the prices paid for by medicines by 25% and slash the maximum rebate it can claw back from drugmakers to 15%.
WASHINGTON — The acting director of the Food and Drug Administration’s drug center, Tracy Beth Høeg, is leaving the agency, according to an email obtained by STAT. The news comes days after Commissioner Marty Makary handed in his resignation.
Michael Davis, currently the center’s deputy director, will take over as acting director. The FDA and Høeg did not immediately respond to requests for comment. Reuters and Bloomberg first reported the news.
Katherine Szarama, the acting director of the Center for Biologics Evaluation and Research, is also leaving the agency. Karim Mikhail, who joined the FDA in 2025 as a senior adviser in the office of the commissioner, will replace her. He was previously CEO of the pharmaceutical company Amarin.
BOSTON – The CEO of the American Society for Gene and Cell Therapy (ASGCT), David Barrett, JD, presented highlights from the Society’s latest Landscape Report on Cell, Gene and RNA Therapy for the first quarter (Q1) of 2026.
The ASGCT report is developed in conjunction with Citeline, a subsidiary of Norstella (a pharmaceutical intelligence provider covering drug development from preclinical to commercialization).
Barrett said there are currently 42 gene therapies approved worldwide, along with 38 RNA therapies and 76 (non-genetically modified) cell therapies, which are steadily growing the field. Two cell therapies were approved in Japan in Q1.
There was a small increase in deal-making, and a significant 30% increase in startup funding compared to the same period in 2025. “I think that signals and underscores a rebounding sector,” said Barrett.
Of the eight gene therapies approved over the past 12 months, half were in the United States, with three more in China. “The regulatory pace is starting to pick up, another strong indicator for the future of our field,” Barrett said. It is a similar picture in RNA therapies. “We see a steady uptick over the course of the last year,” he added.
Zooming out, Barrett estimated that there are more than 4,200 therapies currently in development, from preclinical through pre-registration. The vast majority of those (more than 4,130) are gene and genetically modified cell therapies, including about 1,300 RNA therapies.
In the field of gene-modified cell therapies, CAR T continues to lead the pipeline for ex vivo gene therapies, with natural killer (NK) and T-cell receptors gaining traction. Not surprisingly, genetically modified cell therapy overwhelmingly targets cancers, but Barrett noted growth in the percentage of these therapies targeting immunological diseases, including lupus, multiple sclerosis, and HIV.
Pipeline growth
Barrett also noted growth and “a promising future” in the clinical trials pipeline. There are currently 350 Phase I, 319 Phase II, and 41 Phase III trials in gene therapy (up from 35 a year ago). “Hopefully, we will see a number of completed trials and FDA decisions in the near term,” said Barrett. A growing proportion of gene therapy trials (exceeding 60 percent) is for non-oncology indications.
In the RNA space, “RNAi therapies are jumping,” said Barrett. The same cannot be said, however, for mRNA. “Unsurprisingly, mRNA therapies continue to slide quarter over quarter,” a symptom of “shaken confidence” in that space, he continued. RNA therapies are targeting primarily non-oncology indications, especially in rare diseases.
Upcoming catalysts
On the business front, Barrett noted there has been “a nice uptick” in Q1 in start-up funding compared to the same quarter last year, which he deemed “a really promising indication.” The number of start-ups historically has tended to hover between 5-20. For Q1, that number was 26.
The Q1 report tracks various business catalysts anticipated through the end of 2027, including increased interest and uptake in expedited review designations—fast track, RMAT, orphan drug breakthroughs and other accelerated approval pathways.
“FDA is getting a lot done… and hopefully we’ll see the same moving forward,” Barrett said.
At the ripe old age of 73, I take six drugs — four prescription and two over-the-counter pills — every day. I keep careful track of them.
But recently, when I received a refill, I noticed my blue pill was now yellow. I was startled, but this was not the first time my pills had morphed into different colors. A few months ago, my white and blue capsule had become white and purple, and before that, my pink tablet turned blue.
Bristol Myers Squibb (BMS) will partner with Hengrui Pharma to co-develop 13 early-stage programs in oncology, hematology, and immunology, the companies said today, through a collaboration that could generate more than $15.2 billion for the Chinese drug developer.
BMS and Hengrui have inked global strategic collaboration and license agreements covering the 13 candidates—consisting of four oncology/hematology assets from Hengrui, four immunology assets from BMS, and five “innovative” assets to be jointly discovered and developed by both companies.
The companies said their collaboration is intended to combine BMS’ research and discovery strengths, global clinical development capabilities, regulatory expertise, and commercial scale with Hengrui’s discovery engine, platform technologies, and efficient early-stage development expertise.
To that end, Hengrui has agreed to fully oversee early clinical development in order to accelerate clinical proof of concept for these programs. Hengrui has the option to co-develop select assets and the potential to conduct certain commercialization activities globally with BMS.
“By leveraging Hengrui’s growing R&D capabilities and proven efficiency in discovering and advancing innovative therapies, we are poised to advance the best of both pipelines,” Frank Jiang, MD, PhD, Hengrui’s executive vice president and chief strategy officer, said in a statement. “It also reflects Hengrui’s continued commitment to strengthen our global presence.
BMS will obtain exclusive worldwide rights to the Hengrui‑originated candidates outside China, Hong Kong Special Administrative Region (SAR), and Macau SAR—Hengrui’s territory of operation—while Hengrui will gain exclusive rights to the BMS‑originated assets within those areas, with BMS retaining rights for the rest of the world.
$950M over two years
BMS has agreed to pay Hengrui up to $950 million over two years, to consist of a $600 million upfront payment, a $175 million first anniversary payment, and a second contingent anniversary payment of $175 million in 2028.
The approximately $15.2 billion value of the collaboration includes exercising available options for the joint discovery programs and achieving development, regulatory, and commercial milestones for all programs. Hengrui also is eligible to receive tiered royalties on net sales of products commercialized outside its territory.
The collaboration deal is expected to close in the third quarter, subject to review under the Hart‑Scott‑Rodino Antitrust Improvements Act and other customary closing conditions.
“This strategic collaboration reflects our commitment to advancing innovative science while maintaining a disciplined approach to portfolio management,” stated Robert Plenge, MD, PhD, BMS executive vice president and chief research officer. “By leveraging complementary capabilities across geographies, we aim to accelerate early clinical learning and make informed decisions that support driving top tier growth in the next decade and, ultimately, our mission to deliver medicines that help patients prevail over serious diseases.”
Recouping ‘patent cliff’ losses
Behind that focus on top-tier growth for BMS, as with other pharma giants, is a quest to recoup the billions of dollars in sales it stands to lose as aging blockbuster drugs head for the proverbial “patent cliff” by losing exclusivity in the U.S. and other key markets.
Of the Top 20 Drugs Heading for the Patent Cliff through 2029—the subject of a GEN A-List last November—BMS had three marketed treatments: The cancer drug Revlimid® (lenalidomide), indicated for forms of multiple myeloma, myelodysplastic syndromes, and three forms of lymphoma, which lost U.S. exclusivity in January; and two drugs set to lose exclusivity in 2028: the cancer immunotherapy Opdivo® (nivolumab), and the factor Xa-inhibiting blood thinner Eliquis® (apixaban).
Eliquis generated $14.443 billion in product revenue last year plus another $4.137 billion in the first quarter. Opdivo made $10.049 billion in 2025 plus $2.146 billion in Q1, while Revlimid racked up $2.951 billion and $349 million.
BMS has laid groundwork for rebuilding its pipeline over the past year through a series of collaborations and acquisitions with companies that include:
Janux Therapeutics: An up-to-$850 million partnership announced in January to co-develop a tumor-activated therapeutic targeting an undisclosed “validated solid tumor antigen expressed across several human cancer types.” ($50 million upfront).
Harbour BioMed: An up-to $1.125 billion partnership with the Chinese biopharma—owned to discover and develop next-generation multi-specific antibodies ($90 million upfront), announced in December 2025.
Orbital Therapeutics: A $1.5 billion cash acquisition of the developer of RNA therapies designed to treat disease by reprogramming cells in vivo, announced in October 2025.
2seventy bio: An approximately $286 million buyout of its partner in developing the blockbuster multiple myeloma drug Abecma® (idecabtagene vicleucel), announced in March 2025. Abecma made $427 million last year. The drug’s sales are no longer reported individually but within BMS’ “Growth portfolio” that garnered $581 million in Q1 2026.
Five castoffs
BMS also outlicensed five pipeline assets to Beeline Medicines, an autoimmune and inflammatory drug developer formed in April with a $300 million Series A financing from Bain Capital. Beeline’s pipeline of BMS castoffs includes afimetoran, being developed for both cutaneous lupus erythematosus (CLE) and systemic lupus erythematosus (SLE), BMS-986326 (atopic dermatitis, CLE, and SLE); lomedeucitinib (formerly BMS-986322, plaque psoriasis), and two IND-stage next-generation biologics for unspecified diseases that target the IL-18 and IL-10 pathways.
Hengrui last September outlicensed its cardiac myosin inhibitor RS-1893 to Braveheart Bio ($65 million upfront, up to $1.013 billion in milestones); and two months earlier inked an up to $12.5 billion ($500 million upfront) partnership with GlaxoSmithKline (GSK) to develop to develop chronic obstructive pulmonary disease (COPD) candidate HRS-9821 and 11 additional programs across respiratory, immunology and inflammation, as well as oncology indications.
Antibody-drug conjugates (ADCs) continue to gain momentum as one of biopharma’s most promising therapeutic classes, particularly in oncology. But while the science behind ADCs advances rapidly, manufacturing these highly potent therapies forces two requirements to coexist: strict aseptic processing and high-containment handling of highly potent active pharmaceutical ingredients (HPAPIs).
For Ashley Harp, a fellow in containment and bioconjugates at the consultancy CRB, operator protection is not simply an environmental health and safety issue—it is a core design principle for successful ADC bioprocessing.
“One of the primary concerns in ADC bioprocessing is protecting operators from exposure to highly potent compounds, which can exist in both solid and liquid form,” Harp says. “Those risks extend far beyond the core manufacturing team to include quality control, maintenance, and calibration staff—anyone who may interact with the process or equipment over its lifecycle.” That broader view is increasingly important as commercial bioprocessors scale ADC production.
Potential exposure points abound. “Across all stages of ADC bioprocessing, additional risks are associated with handling solid and liquid waste, collecting samples, changing or maintaining HVAC filters, and performing maintenance or calibration activities,” Harp says. These tasks often involve residual potent compounds that remain on equipment surfaces or within process systems, creating exposure risks long after active manufacturing ends.
Tackling those risks starts long before production begins. “Addressing operator protection risks starts with rigorous risk assessments and the implementation of recommendations based on those assessments,” Harp says.
She emphasizes the importance of involving experts in containment, industrial hygiene, and collaborative facility and equipment design early in project planning. Identifying hazards upfront makes it easier—and less costly—to build effective safeguards into the process rather than retrofitting them later.
Where higher-risk activities cannot be avoided, Harp recommends multiple layers of protection rather than relying on a single solution. Closed processing systems, equipment designed to contain materials at the source, and technologies that support safe cleaning and transfer all play a role. Examples include rigid and flexible containment approaches, containment valves, split valves, specialized piping systems, continuous liners, containment enclosures, spray balls, wash wands, and manual wiping protocols.
At the same time, smarter process design can reduce risk even further. “In parallel, thoughtful process development can reduce or even eliminate the need for direct personnel interaction with the manufacturing process,” Harp says. Technologies such as flow chemistry, process intensification, and robotics can significantly reduce manual handling and intervention, limiting the chances of exposure while also improving consistency.
For commercial bioprocessors, implementing these solutions requires organizational alignment. “Successfully implementing these solutions requires early and ongoing collaboration across disciplines,” Harp says. Environmental health and safety, industrial hygiene, maintenance, calibration, operations, engineering, and quality teams all need to be involved from the beginning to form truly cross-functional design teams.
Facilities must also remain flexible. ADC pipelines evolve quickly, and containment strategies need to evolve with them. Specialized expertise in integrating process equipment within high-containment environments is crucial, as are strong R&D capabilities—or partnerships that can provide them.
Although “high containment requirements inherently increase the operational cost and complexity of manufacturing ADCs compared to non-potent therapies,” Harp argues that strategic improvements can offset some of those costs over time. Process intensification, reduced manual handling, and stronger containment can improve raw-material efficiency and reduce waste generation. Implementing new systems might initially extend development timelines or delay time to market, but the long-term result can be safer, more sustainable operations for both people and products.
As ADC pipelines continue to expand, operator protection is shifting from a compliance checkpoint to a competitive necessity.
Varda Space Industries, a startup that’s been pitching its ability to perform drug experiments in space, says it has signed up the pharmaceutical company United Therapeutics in what may be remembered as a notable step toward in-orbit manufacturing.
The idea of building things in outer space for use on Earth has so far been explored mostly on board the International Space Station, and only in small-scale experiments backed by governments.
But Varda, based in El Segundo, California, is now telling drug companies it has a practical, and repeatable, way to produce novel molecules in microgravity.
“This is the first commercial path to products made in space,” says Michael Reilly, Varda’s chief strategy officer.
The scientific idea is that chemical mixtures have different properties under weightless conditions. For instance, water will hang together in a wiggly sphere, since without gravity, surface tension is the strongest force present.
The plan is to launch versions of United Therapeutics’ drugs into orbit, where they can be allowed to form solid crystals. The hope is that in microgravity, they’ll take on atomic arrangements not seen on Earth, possibly leading to new versions with improved stability or other valuable properties.
United is led by CEO Martine Rothblatt, who worked on early telecommunications satellites. Since then, she’s built a multibillion-dollar health franchise with a succession of drugs to treat a lung disease called pulmonary arterial hypertension, which her daughter suffers from, and a subsidiary developing genetically modified pigs as a source of organs for transplantation.
Rothblatt says space could be the next step if orbital conditions permit United to identify “even more amazing” versions of its drugs.
Space to reformulate
Pharmaceutical companies often try to keep their blockbuster franchises alive by creating improved versions of drugs or reformulating them—for example, making the switch from a pill to an inhaled version, as United has done with some of its products. Doing so can keep imitators at bay and create extra decades of patent protection.
Assisting drugmakers are specialist companies, such as Halozyme and MannKind, that earn profits by helping to reformulate other companies’ drugs, often taking a royalty on future sales.
That’s the business Varda has been trying to break into—by using excursions into space instead of nebulizers, patches, or nanoparticles. The company was formed in 2021 by Delian Asparouhov, a partner at Peter Thiel’s Founders Fund, along with Will Bruey, a former avionics engineer with Elon Musk’s SpaceX who is now the company’s CEO.
The pair’s bet is that space manufacturing will become viable once rocket launches become frequent enough—and cheap enough—to support a business model in which raw materials are sent into orbit, processed, and then returned to Earth in a new form.
And that’s starting to happen. To get into space, Varda has been purchasing rides from SpaceX—which now launches a rocket every two or three days, usually a reusable Falcon 9.
Those rockets have a nose cone, or payload fairing, about the size of a moving truck that gets filled with satellites or instruments, which are then released into orbit.
Starting in 2023, Varda began sending up small satellites that have a boulder-size capsule attached. The capsule contains equipment to carry out experiments, and it can detach and fall back to Earth, entering the atmosphere at a speed of around Mach 25 before slowing via air resistance and eventually drifting to land with a parachute. (Varda lands its craft in the Australian outback.)
That speedy reentry has also drawn interest from the US military, including the Air Force, which has paid Varda to fly instruments and take measurements relevant to hypersonic missile technology. Of the six craft Varda has paid to put into orbit so far, half have been dedicated to military research and half carried drug-related demonstrations.
At Varda, such “dual use” of technology is accepted as part of being in the space business, which remains reliant on government support. The company’s founders say Varda may be the only company that employs hypersonic engineers and pharmaceutical chemists under the same roof.
At Varda’s headquarters, drug samples are loaded into a spinning arm that creates extra-high G-forces. While the opposite of microgravity, increased weight can provide clues into whether a drug will act differently under new conditions.
COURTESY VARDA
Launching industries
Actual space manufacturing still remains mostly an aspirational project. In 2021, Jeff Bezos, after his first trip aloft in a rocket, suggested that polluting industries should be moved beyond the atmosphere. “We need to take all heavy industry, all polluting industry, and move it into space. And keep Earth as this beautiful gem of a planet that it is,” he told MSNBC.
Weight is the big obstacle to such dreams. It still costs around $7,000 to launch a single kilogram of payload into orbit, which makes it impractical to, say, send cotton into space to be dyed there, or even to launch the acids and solvents needed to make a semiconductor chip.
But drugs may be among the few exceptions to this economic rule, since pound for pound, they can be as valuable as rare radioactive isotopes and fine-cut diamonds.
For instance, just one kilogram of the weight-loss drug Ozempic is worth more than $100 million at retail. (The reason your Ozempic bill is only $1,000 a month is that minute quantities of the active ingredient are present in the shots.)
That’s why Varda thinks it may eventually be able to manufacture drugs in orbit. However, its effort with United is more of a flying experiment to learn whether the company’s lung medicines will crystallize differently in microgravity.
The terms of the deal between Varda and United aren’t public, and the companies haven’t said which specific drugs the collaboration will study. But Rothblatt did confirm that United is paying Varda to help it identify new crystal forms of its drugs (also called polymorphs), which it hopes could have improved properties.
“One has to do the experiment to find out if that is so. The first part of the experiment is to see what polymorphs of these molecules can be made without the influence of gravity,” she says. “Then, once we have those polymorphs, we will test them.”
There is good evidence that crystals form differently in space. For instance, in 2017 the pharmaceutical giant Merck sent samples of its cancer immunotherapy drug Keytruda to the International Space Station, where it was found to form crystals of a single size. On Earth, the drug tended to form two different sizes at once.
That experiment offered clues for how to formulate the drug as a shot instead of administering it intravenously. Still, when Merck introduced a Keytruda injection last year, it ended up using a different approach. That means there’s still no straight-line connection between orbital discoveries and any drug here on Earth. Actual space factories are another step further from reality.
“We’ve been learning from space for years, but I can’t name anything manufactured in space, brought down to Earth, and sold,” says Reilly. “So that is a first—or it will be a first.”
Reilly says that Varda anticipates launching United Therapeutics’ drugs into orbit sometime early next year.
In early 2025, biotech experienced a “DeepSeek moment” when biotech and pharma leaders alike realized how quickly China was gaining ground with innovation, speed of drug development, and share of licensing deals. In 2020, global pharmaceutical companies spent about $9 billion on licensed drug assets from China. In 2025, that number shot to more than $137 billion. The first two months of 2026 alone accounted for nearly $50 billion in deals. As a December 2025 report from the National Security Commission on Emerging Biotechnology put it, “in just three years, China’s biopharmaceutical industry rose from near irrelevance to dominance.”
China’s rise is happening with the blessing of U.S. pharmaceutical executives, who are allowing their own industry to be destroyed.
I am a co-chair of a working group at the Council on Foreign Relations investigating the U.S.’s generic pharmaceutical dependence on China. An estimated 60% of our generic medications have an active ingredient that originates in China; some estimates have this figure as high as 80-90%. (The exact percentage is unknown because the Food and Drug Administration doesn’t formally track this information, and because a significant percentage of our drugs are imported from India, which in turn imports chemical precursors from China.)
