Royalty Pharma, the world’s largest buyer of biopharmaceutical royalties, has established its first Asia-Pacific headquarters in Hong Kong, signaling a strategic commitment to the region’s burgeoning drug innovation sector. This move coincides with a significant uptick in out-licensing activity from mainland Chinese biotechnology firms, which saw deal values surge 87% year-on-year through May 2026. As traditional fundraising channels, such as IPOs, face volatility and shifting investor appetite toward AI, royalty financing provides a vital alternative capital source for cash-hungry firms.

Kenneth Sun, head of Asia for Royalty Pharma, notes that China’s drug innovation is rapidly diversifying into complex modalities like antibody-drug conjugates (ADCs) and CAR-T therapies. Despite looming U.S. investment restrictions under the proposed Binsa legislation, global demand for high-quality, reasonably priced Chinese assets remains robust, with projections suggesting a massive increase in cross-border licensing transactions throughout the remainder of the year.

The US Food and Drug Administration (FDA) has established a target action date of February 28, 2027, for Sarepta Therapeutics’ supplemental applications to convert the accelerated approvals of its Duchenne muscular dystrophy (DMD) therapies, Amondys 45 and Vyondys 53, into full approvals. This regulatory milestone follows the ESSENCE confirmatory trial, which failed to meet its primary efficacy endpoint. Sarepta argues that the clinical data remains compelling, citing a 0.05 steps/second improvement in 4-step ascend velocity and substantial real-world evidence.

The company argues that the COVID-19 pandemic significantly confounded the study’s readout and that, in rare, slow-progressing diseases, real-world experience is essential to evaluating long-term disease course. Wall Street analysts estimate a 50% probability of approval, with market attention focused on whether the FDA will maintain current marketing authorizations for these therapies even if the agency declines to grant full conversion at this stage.

The ADC landscape is evolving rapidly.From accelerating growth in bispecific ADCs, dual-payload ADCs, DACs, and AOCs to increasing patent activity and pipeline expansion, the data points to a field moving beyond traditional approaches. Innovation is reshaping the future of ADC development as companies seek to improve efficacy, overcome resistance, and unlock new therapeutic opportunities.

You can explore the key trends, technologies, and emerging modalities driving this next wave of innovation at World ADC San Diego, taking place October 12–15, 2026.

*Insights From Beacon (www.beacon-intelligence.com)

Takeda Pharmaceutical has signed a strategic partnership with Insilico Medicine worth up to $600 million, granting the Japanese drugmaker exclusive global rights to therapeutics discovered via Insilico’s proprietary Pharma.AI platform. Under the terms, Insilico will utilize its generative AI capabilities to oversee discovery from early design through candidate optimization, ensuring efficacy and safety. Takeda will subsequently manage clinical development for assets aligned with its core therapeutic priorities. This agreement includes nearly $60 million in upfront and near-term milestone payments, with Insilico eligible for additional preclinical, clinical, and commercial milestones, alongside tiered royalties.

For Takeda, the pact is a cornerstone of its transition toward an "AI-native" discovery model, integrating generative AI, robotics, and automated workflows to accelerate high-quality candidate identification. The deal adds to a busy year of collaborations for Insilico, which has recently partnered with industry leaders including Eli Lilly, Servier, and SK Biopharmaceuticals.

A 15-year study of 45 biopharma companies across Asia, Latin America, and EEMEA reveals a pivotal strategic shift: emerging-market players are evolving from generic-focused models into global innovators. By analyzing R&D investment and portfolio mix from 2010 to 2025, the research identifies three distinct categories: "Innovation Leaders" (investing >20% of revenue in R&D), "Emerging Innovators" (8–12%), and "Generic Players" (4–6%).

Successful firms, such as China’s Hengrui Pharma and CSPC, transitioned by concentrating R&D on specialized therapeutic areas, like oncology and cardiometabolic disease, and adopting advanced technology platforms like antibody-drug conjugates. This transition yielded over 10% higher revenue growth and significantly stronger market returns compared to generic peers. While many firms in Latin America and India remain hindered by risk-averse investment climates and pricing pressures, the framework underscores that sustained, high-intensity R&D investment is the essential catalyst for these companies to bridge the gap toward global competitive leadership.

In an age that looks ahead toward AI-driven drug development, we should also look back at the scientific frameworks set decades ago regarding preclinical research. In every major drug programme, between the first idea and the first human dose, there lies an uncomfortable reality: animals are still used, sometimes usefully, sometimes imperfectly, and increasingly alongside better, human-relevant alternatives.

The John Hopkins Center for Alternatives to Animal Testing (1), established in 1981, shows that this controversial topic has been recognised for decades, with serious efforts made to replace and reduce animal use rather than justify its use indefinitely.

However, for complete, whole-organism questions, nothing yet fully substitutes a living system with circulating blood, an immune response, and multi-organ interactions. That is why regulators still expect animal data before first-in-human studies, and why millions of animals continue to be used each year. Ignoring this fact does not make progress towards animal-free research any closer.

At the same time, clinging to animals as the “gold standard” is scientifically and ethically questionable. New methodologies, such as organ-on-a-chip, advanced 3D cultures, and computational or AI models, can sometimes predict human responses better than the traditional preclinical models. A human Liver-Chip correctly identified 87% of drugs known to cause drug-induced liver injury, whereas all 27 drugs had previously passed preclinical animal testing (2).

Published in 1959, the 3Rs framework (replacement, reduction, refinement) is not just an ethical slogan, it is a scientific strategy for more precise, human-relevant data (3). Now, with the rise of non‑animal preclinical models, we can propose the 3Is for embedding human‑centred methodologies directly into the core of preclinical science: invest, improve, and integrate.

References

1. Goldberg AM. A History of the Johns Hopkins Center for Alternatives to Animal Testing (CAAT): The First 28 Years (1981–2009). Appl Vitro Toxicol. 2015 Jun 1;1(2):99–108. doi:10.1089/aivt.2015.0015

2. Ewart L, Apostolou A, Briggs SA, Carman CV, Chaff JT, Heng AR, et al. Performance assessment and economic analysis of a human Liver-Chip for predictive toxicology. Commun Med. 2022 Dec 6;2(1):154. doi:10.1038/s43856-022-00209-1

3.Hubrecht RC, Carter E. The 3Rs and Humane Experimental Technique: Implementing Change. Anim Open Access J MDPI. 2019 Sep 30;9(10):754. doi:10.3390/ani9100754 PubMed PMID: 31575048; PubMed Central PMCID: PMC6826930.