In Depth: China’s Biotech Push Into Small Nucleic Acid Drugs Draws Global Pharma

1. China’s biotech industry began 2026 with a series of major cross-border licensing agreements in the field of small nucleic acid drugs, signaling a growing global interest in Chinese biotech innovation, particularly in gene-targeted drug development. [para. 1]

2. On Tuesday, Frontier Biotechnologies Inc. announced a global exclusive licensing deal with British pharmaceutical company GSK PLC. The deal grants GSK rights to develop, manufacture, and commercialize two of Frontier’s small interfering RNA (siRNA) drug candidates for kidney diseases worldwide. In return, Frontier will receive a $40 million upfront payment and $13 million in near-term milestones, potentially followed by up to $950 million in additional milestone payments and tiered royalties, depending on the drugs’ future development and commercialization success. [para. 2][para. 3][para. 4]

3. The agreement reflects a larger trend of international pharma companies increasingly seeking innovative partnerships with Chinese firms to enhance their own research pipelines, especially for next-generation therapies. One of the assets in the deal has already reached the IND (Investigational New Drug) filing stage, while the other remains preclinical. Frontier Biotechnologies will handle early-stage development, including phase I trials and IND-enabling studies, with GSK responsible for subsequent global development, regulatory submissions, and commercialization. [para. 5][para. 6]

4. Small nucleic acid drugs, such as siRNAs, work by targeting messenger RNA to block disease-causing protein production. This technology allows early intervention in disease processes, offering potential treatments for conditions that traditional therapies have struggled to address, with improved precision and duration of effects. Initially used for rare genetic disorders, siRNA research is now expanding to much more common diseases, including cardiovascular, metabolic, and cancer indications. [para. 7][para. 8]

5. GSK’s R&D head, Kaivan Khavandi, highlighted that the deal brings the company potential “first-in-class” therapies for kidney disease. Frontier aims to leverage GSK’s resources to accelerate global development and maximize the drugs’ value through earlier market entry. The deal also strengthens Frontier's finances, supporting its R&D and platform upgrades by providing immediate and milestone-based funds. At the end of Q3 2025, the company held 97.1 million yuan ($14.2 million) in cash, had spent 83.9 million yuan on R&D, and projected a net loss of up to 290 million yuan for the year, on maximum revenues of 145 million yuan. [para. 10][para. 11][para. 12][para. 13]

6. Frontier Biotechnologies’ stock initially surged on news of the GSK deal, closing 9.29% higher on announcement day before declining in subsequent sessions, settling at a market cap of about 8.11 billion yuan. [para. 14]

7. The GSK-Frontier deal is part of a broader trend of frequent cross-border licensing transactions in China’s small nucleic acid drug space. Recently, Ribo Life Science entered into a potential $4.4 billion deal with Madrigal Pharmaceuticals, SanegeneBio licensed an RNAi drug to Genentech ($200 million upfront, up to $1.5 billion in milestones), and SanegeneBio also partnered with Eli Lilly. Sirius Therapeutics and Argo Biopharma have likewise sealed high-profile deals with global pharma firms. According to Huaxi Securities, 2025 saw over 30 such deals worldwide totaling more than $36 billion. [para. 15][para. 16][para. 17][para. 18][para. 19][para. 20][para. 21][para. 22]

8. The global small nucleic acid drug market grew from $2.7 billion in 2019 to $5.7 billion by 2024 (16.2% CAGR). The sector’s composition is evolving, with siRNA drugs’ share soaring from 6.2% to 44.5% of the market in five years. Enhanced drug delivery technologies and improved chemical designs are catalyzing further innovation, potentially triggering a new wave of advanced therapeutics. [para. 23][para. 24]

9. Although no Chinese company has gained approval for an siRNA drug yet, local activity is strong. Major Chinese drug firms are advancing early-stage candidates, especially targeting chronic and large-population diseases rather than only rare ones. The explosive rise of GLP-1 weight-loss drugs has heightened investor and industry interest in metabolic targets, and siRNA drugs for obesity are generating promising early results, with analysts touting them as potentially the next blockbuster class. [para. 25][para. 26][para. 27][para. 28][para. 29]

10. As of January, China hosts over 100 in-development small nucleic acid drug pipelines—mainly for chronic diseases like hyperlipidemia, hepatitis B, kidney disease, and various tumors—reflecting a strategic industry shift towards larger disease categories. The field is highly dynamic, with domestic R&D closely mirroring global trends, though it remains to be seen if Chinese innovators can sustain momentum and differentiate their products in an increasingly crowded global marketplace. [para. 30][para. 31]