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Licensing partnerships have become a critical strategy for biopharma companies to fuel their  pipeline, especially as blockbuster drugs approach patent expiration. In 2024. 
Big Pharma has significantly ramped up spending on licensing deals,  investing on average 33% in 2024 more than in 2023,  to access novel therapies and mitigate the looming “patent cliff”. With top selling drugs like  Keytruda  and  Eliquis  set to lose exclusivity by 2028, big pharmas are turning to biotechs for licensing deals with massive potential to fill anticipated revenue gaps.
This article is meant to examine the recent surge in licensing deals for scientific assets in oncology and immunology,  and analyzes emerging patterns.
We will focus on  modalities which appear to be promising ranging from ADC to PROTACs and  other degraders and investigate where deal activity is most concentrated.
Which regions are driving collaborations, and how trends in 2025 position the industry going into 2026.

Rebound in Deal Activity and Pipeline Gaps

After a dip in 2022–2023, licensing deal activity has rebounded modestly in 2024, driven by pipeline needs and more favorable conditions in the financial markets.
The total number of licensing deals in 2024 ticked up to about 148 deals,  still below the pandemic-era peak, but indicating a revival in deal flow.
More strikingly, the reported total potential value of licensing agreements rose to $183 billion in 2024 from $174 billion in 2023.
Companies are committing larger sums, though much of that value is tied to downstream milestones and options.
Upfront payments as a share of total deal value have remained low  at ~7%, continuing a trend of risk-sharing and back loading the deals and wanting to see clinical efficacy and safety.
Rather than having  payments upfront, deals increasingly feature contingent milestone payouts and opt-in structures, seeking to de-risk their initial investment and for the out-licensing company to have further incentive for the drug to reach approval. 

A key driver behind this uptick is the coming “patent cliff” as some would call it.
Some companies face a $200B+   loss in revenue due to nearly 70 blockbuster drugs losing exclusivity between 2025 and 2030.
Major products in cardiometabolic, immunology, and oncology/immunotherapy  will see generics and biosimilars erode revenues.
I suspect that this is part of the reason for the recent surge in licensing and M&A activity we have seen, some analysts expecting large pharmas to increasingly rely on external innovation to fill gaps in their pipelines and sustain growth in the future.
Some figures would suggest that external innovation now accounts for roughly 70% of the approved drugs that are entering the market.
 In other words, licensing deals have become critical for big pharma to navigate the future expected losses in revenue.
Complementing licensing with M&A by securing fresh assets that could become the next generation of  blockbusters.

Early Stage Deals vs Later Stage Deals

One notable trend is the shift toward earlier stage deals .
Going  by numbers and  the amount of preclinical and Phase I assets now far outnumber those for later-stage project, but it is also important to note that they are usually lesser in  $ terms. .
In an analysis done by BCG, of the new modality deals done by top 20 pharma from 2022–2024, roughly two-thirds of licensing deals were done at earlier stages of development.
The appetite for nascent assets is evident in 2024: for example, 71% of deals with China based assets in 2024 involved preclinical or Phase I leads, a sharp change from prior years when mid/late-stage assets dominated.
This early stage focus stems not only from regulatory limits on China only data in the West but also from strategic and economic advantages. Licensing preclinical or Phase 1 assets lets Western partners shape trial design, guide development and involve their own scientists early while keeping upfront costs lower and securing greater long term optionality.

An example of a earlier stage deal from last year is for example
When Genentech acquired Regor’s next-generation CDK inhibitors for a upfront payment of $850M.

Lateer stage licensing deals, however, have not disappeared  they remain crucial for sustained revenue streams.
Especially for pharmas more affected by patent expirations.
In fact big pharma’s focus on in licensing Phase III assets has driven up deal sizes for those programs.
In 2024, the median upfront payment for Phase II licensing deals dropped to $28 million, down from $38 million in 2023.
While the upfront for Phase III went up from $42M to roughly $75M.
 Large companies are willing to pay a premium for assets “nearing approval,” given their higher likelihood of success.
For example.
In June 2025, Pfizer paid a whopping $1.25 billion upfront to license SSGJ‑707, an experimental cancer antibody from China’s 3SBio, which is slated to enter Phase III trials later this year.
Highlighting the change in confidence for Chinese originated assets which we saw in 2024 and continue to see.

Some Key Modalities in Licensing Deals

Antibody-Drug Conjugates (ADCs) a Hot modality in Oncology.

ADCs have emerged as one of the hottest modalities in oncology licensing. These smart chemotherapy agents.
Which link cytotoxic drugs to targeting antibodies, have proven their worth with multiple FDA approvals and strong efficacy, spurring an “increased flow of  investment towards ADCs.
 The market for ADCs is expected to reach  ~$39 B by 2030, and companies are racing to secure ADC assets and technology.
In 2023 alone, there were 76 ADC-related deals , and the pace has continued in 2024 . Notably, many of these are early stage alliances to access next-generation ADC platforms, novel targets, or regional rights to ADC candidates.
Major pharma players have been aggressively in-licensing ADCs: for example, AbbVie licensed ImmunoGen’s ADC Elahere  in 2024 for up to $10.5 B.
One of the year’s biggest deals last year, involving a marketed ovarian cancer ADC. In early-stage oncology, Genmab paid $20 M upfront  for rights to Profound Bio’s preclinical ADCs, and Johnson & Johnson struck a $2 B deal with Ambrx for several ADC candidates.
Several other firms are also active in sourcing ADCs,  Ipsen for example  licensed a preclinical ADC from Sutro for up to $900 M,  Daiichi Sankyo  partnered with Merck in 2023 to co-develop three ADCs  in a whopping $16.5 B collaboration.
These examples illustrate that whether quite a bit of resources are being directed towards securing promising ADcs.
A hardly suprising pattern is the role of Chinese biotech in ADC deals.
China has become a hotbed of ADC R&D, and Western firms are eagerly licensing those innovations.
 In 2024, 44% of China to West deals involved complex biologics like ADCs or bispecific antibodies, accounting for 66% of total upfronts in those cross-border deals.
For instance,  IDEAYA Biosciences inked an exclusive license with China’s Hengrui for a Phase I DLL3-targeted ADC in small cell lung cancer, paying $75 M upfront for ex China rights in a deal worth up to $1.04 B.
Likewise, AstraZeneca had earlier licensed an ADC from LaNova  for $55 M upfront, and GSK partnered with  Hansoh on multiple ADC programs.
These deals underscore how licensing activity is concentrated in the ADC space, with companies vying for promising ADC payload/linker platforms and tumor targets.
The momentum behind ADCs is expected to build in 2025 and going forward, as more ADCs show clinical success.

PROTACs and Molecular Glues

Targeted protein degradation is one of the more interesting modalities emerging right now. Instead of inhibiting a protein, you get rid of it entirely.
Pulling in the ubiquitin proteasome system to eliminate disease driving targets.
That unlocks a range of opportunities, especially for proteins previously labeled "undruggable" in cancer and immunology.

The space is still early, but several of the bigger players such as Takeda, Novartis, J&J, BI, Abbvie, Amgen and several others already have some sort of degrader in their pipeline. 

Arvinas has been at the center of this shift. Back in 2021, they partnered with Pfizer on ARV-471, their estrogen receptor degrader for breast cancer. That deal was worth over $1 billion and helped position ARV-471 as one of the most clinically advanced PROTACs out there. It’s now in Phase 3, and the readout will likely be a big catalyst for the entire field.

More recently, in 2024, Novartis signed a separate deal with Arvinas for ARV-766, an androgen receptor degrader aimed at prostate cancer. That agreement included $150 million upfront and over $1 billion in potential milestones, with Novartis picking up global rights to the Phase 2 asset. That’s a clear signal that even the more conservative players are lining up to get early access.

Gilead has also been active. They extended their ongoing collaboration with Nurix Therapeutics, a company focused on E3 ligase biology and degrader discovery. Gilead added $15 million to keep the partnership going, with up to $1.7 billion in downstream milestones. Nurix retains US rights on two programs  so again, these deals are being structured to share both risk and upside.

On the glue side, it’s a similar story but less public hype.

In May 2024, Takeda partnered with Degron Therapeutics, a biotech working on molecular glue degraders. That collaboration, valued up to $1.2 billion, covers targets in oncology, neuroscience, and inflammation. Takeda gets exclusive options, while Degron receives upfront cash, R&D funding, milestones, royalties, and even an equity investment.

Then you’ve got Novo Nordisk, which partnered with Neomorph in a $1.46 billion multi-target deal focused on glue degraders for cardiometabolic and rare diseases. That’s outside oncology, but it shows the broader appeal of this approach.

That said, the field is still early. Most of these deals have relatively modest upfronts,  like Novartis’s $150 million  and heavy back-loaded milestones. A 2024 industry review even pointed out that emerging modalities like degraders, gene editing, and oncolytic viruses have seen just one or two major deals per year, and very few that cross the $1 billion upfront line.

So right now, the smart players are positioning themselves. They're not throwing massive checks yet they’re watching data roll in, locking in rights, and making sure they’re not late to the party. As we move into 2025 and 2026, and mid-stage data starts to land, expect that to shift.

Because once one or two of these get real traction in the clinic, the entire landscape could open up fast.

Other Novel Modalities in Oncology & Immunology

Beyond ADCs and degraders, several other innovative therapeutic modalities are shaping licensing trends in oncology and immunology such as. Bispecific & Multi-Specific Antibodies, Cell and Gene Therapies.

Regional Trends: U.S, Europe and China

Geographically, licensing activity has globalized, with a notable surge in cross-border deals between Western pharma and Asian (particularly Chinese) biotechs. In 2024, a remarkable 31% of the molecules in-licensed by large pharmas came from China-origin companies, up from 29% in 2023 . This reflects the maturation of China’s biotech industry – rich with innovative targets and modalities – and Western firms’ eagerness to tap that source of innovation. An Nature Reviews Drug Discovery analysis tallied 48 China to West deals in 2024 with disclosed values, finding that Chinese partners are mostly out licensing. These deals are predominantly in oncology 54% and I&I 25% .
 The Western licensees include both major pharmas, smaller biotech companies, and interestingly European companies closed slightly more such deals than U.S. companies in 2024. Europe’s strong showing  may be due to European pharmas like Roche, Sanofi, AstraZeneca, and Boehringer looking to augment pipelines via Asian innovation.

This China West licensing boom is expected to continue into 2025 - 26.
Western companies find that sourcing drug candidates from China can be “cost-effective” and efficient for pipeline replenishment. Many Chinese biotechs, facing funding slowdowns at home, are eager to partner and reinvest upfront proceeds.
We have already highlighted examples such as Merck-LaNova  for a bispecific, IDEAYA Hengrui for an ADC, Takeda Ascentage for a TKI, etc., and numerous others occurred in 2024
 One caveat is that the flood of China sourced assets could “drive down the economics” that Western biotechs can command, if similar molecules are available from China at a cheaper price, big pharma may leverage that in negotiations.
This competitive dynamic may pressure U.S./EU biotechs to focus on truly differentiated, FIC programs.
Deal Structures and Strategic Considerations

Deal structuring has become increasingly creative as companies balance risk, reward, and regulatory considerations. A few common structures and trends observed in recent oncology/immunology deals include:

• Heavy use of options and milestones: As mentioned, upfront payments now typically make up only ~7% of the headline deal value. Companies push large portions of the economics into milestone payments  and option exercise fees. For example, the AbbVie Gilgamesh neuroscience deal in 2024 had only $65 M upfront vs $1.95 B in milestones with an option structure. This structure allows a pharma to pay more only if the asset hits development checkpoints. It also de-risks early-stage deals.
  Important given many early programs won’t make it to market. Option to license agreements are very popular for preclinical collaborations: a biotech might conduct initial discovery or Phase I work, then the pharma can opt in for an exclusive license by paying an additional fee.
  
  
  

• Equity stakes and co-development rights: In many large alliances, the licensing pharma also invests in the equity of the smaller partner or target company. This serves to align interests and can provide the biotech with non-dilutive capital. For instance, Sarepta’s $1.075 B deal with Arrowhead,  for multiple RNAi candidates in rare diseases  included a $325 M equity investment by Sarepta in Arrowhead stock alongside the $550 M upfront cash. Equity stakes (usually minority) signal commitment and can give the larger company some strategic influence. Another trend, particularly in U.S. biotech–big pharma deals, is giving the smaller partner an option to co-fund and co-commercialize in certain markets.
  
  
  

• Upfront vs. downstream balance: Despite some eye-catching upfront figures in 2024 , the general trend is lower upfronts and more backend loaded deals.
  Ropes & Gray analysts note that in 2024 the average upfront was ~7% of total deal value, similar to 2023 and much lower than a few years ago. This suggests that licensing deals have become more partner friendly for the buyer, with risk-sharing mechanisms, which might be part of the reason for the large number of early stage deals.. This aligns incentives and also helps pharmas manage P&L impact.
  
  
  

• Regional vs. global licenses: Another structural consideration is whether a deal is global or territory-specific. Many deals we discussed are global rights (especially when big pharma is involved). But there are regional deals as well, particularly for accessing certain markets. A trend a few years ago was Chinese pharmas licensing Western drugs for China – for example, Innovent and Junshi licensed PD-1 antibodies from abroad for China development. While our focus here is Westward licensing, it’s worth noting such regional deals continue in both directions. The IDEAYA Hengrui ADC deal is essentially a regional license. This kind of split can maximize each party’s strength and will likely be a model for other collaborations, especially as geopolitical considerations sometimes limit full acquisitions.
  
  
  

Notable Deals and Strategic Signals in 2024

To illustrate the above trends, here is a selection of notable 2024 licensing deals in oncology and immunology, with key details:

• Merck & Co. – LaNova (PD-1/VEGF Bispecific, Oncology): Merck’s November 2024 license of LM-299, a Phase I bispecific antibody, stands out for its scale and strategic intent. Merck paid $588 M upfront and up to $2.7 B in milestones for global rights. This deal is seen as Merck’s move to defend its immunotherapy franchise ahead of Keytruda’s patent expiry, by investing in a next-gen immunotherapy that had shown superior survival in trials when used in China. The deal underscores the patent cliff response: acquiring promising substitutes/enhancements to current blockbusters..
  
  
  

• Novartis – Dren Bio (Myeloid Engager Antibodies, Oncology): Announced July 2024, Novartis’s collaboration with Dren Bio (USA) involves developing targeted myeloid cell engager antibodies for cancer. Novartis paid $150 M upfront (including $25 M equity) for this multi-program deal, which could reach $3 B with milestones. This highlights big pharma’s interest in next-wave immunotherapy. It also shows the willingness to invest early (Dren’s programs were preclinical) in platform-based biotech.
  
  
  

• Gilead – Nurix : Gilead’s extended pact with Nurix  didn’t have a huge upfront ($15 M), but is notable for its scope and total value (~$1.8 B). It grants Gilead options on multiple new protein degrader programs, reflecting a long term alliance in oncology discovery. Gilead’s willingness to continue this collaboration  suggests satisfaction with progress and a strategic commitment to degraders.
  
  
  

• Bristol Myers Squibb – Prime Medicine : Mentioned earlier, this Sept 2024 deal is notable for targeting an emerging modality . BMS’s $110 M upfront (cash + equity) and over $3.5 B in milestones demonstrate the large potential seen in gene-edited cell therapies for cancer and autoimmune disease..
  
  
  

• AbbVie – FutureGen : In June 2024, AbbVie licensed FG-701 from Beijing-based FutureGen for $150 M upfront, $1.56 B in milestones. FG-701 is a preclinical antibody against TL1A, a target in ulcerative colitis/Crohn’s (IBD). This deal shows big pharma’s eagerness to grab promising preclinical immunology assets, especially biologics, to maintain leadership in chronic inflammatory diseases.
  
  
  

• Takeda – Degron (Molecular Glues, Multi-therapeutic): The $1.2 B Takeda–Degron partnership (May 2024) is worth highlighting as it marries an Asian startup’s technology  with a Japanese pharma’s global muscle, focusing on multiple therapy areas including oncology. It reflects how molecular glues have gained traction in deals, and how Takeda is deploying capital across both cancer and neuroscience/inflammation early programs.

Patterns and signals: Across these examples, a few patterns emerge. First, big pharmas are targeting novel mechanisms within their core focus areas  e.g. PD-1 bispecifics for immuno-oncology, degraders for oncology, new cytokine pathways for immunology. Second, there’s a willingness to engage in mega-deals for early programs if they address a strategic need (Merck’s and BMS’s deals show that even Phase I or preclinical assets can warrant half billion dollar upfronts or multi billion totals in the right context. Third, competition for promising assets is intense, which can be inferred from the need to include sweeteners like equity or profit sharing, and from instances of mid-sized biotechs winning rights to a Chinese ADC that presumably many larger companies also eyed. It suggests that being agile and regionally connected  is becoming important for deal-making success.

Implications of the Patent Cliff and Outlook for 2025–2026

The specter of the patent cliff will continue to shape licensing trends into late 2025 and 2026. As the clock ticks down on blockbuster patents in oncology and immunology, momentum is expected to further build in these deal arenas. Industry experts predict an “active year for M&A” in 2025 alongside licensing, as big pharmas flush with cash look to bolster pipelines. Notably, any easing of economic conditions could unleash even more deal activity. But even with a possible M&A uptick, licensing will remain a crucial avenue, particularly for early to mid-stage assets that can plug pipeline holes by the late 2020s.

In oncology, we anticipate continued heavy interest in ADCs, immunotherapies, and precision oncology deals. ADC deal flow in 2025–26 should stay robust – big pharmas that missed out on the first wave may secure ADC partnerships. The recent success of ADCs like Enhertu in broad indications could spur deals expanding ADC use in solid tumors and even immunological diseases. Checkpoint inhibitor combos and next-gen IO therapies  will also be hotly pursued to extend immunotherapy franchises. For example, beyond PD-1/VEGF, we might see deals around TIGIT inhibitors or novel checkpoint targets if clinical data in 2025  is positive, companies will license these to stay competitive in immuno-oncology.

In immunology, autoimmune and inflammatory disease assets will be in demand to replace aging products. The year 2025 may bring results from mid-stage trials of IL-2 conjugates, T-reg-targeting therapies, and other novel immune modulators.
Any success could trigger partnership frenzy. We already saw GLP-1 obesity/diabetes deals total $6.4 B in 2024, indicating big players are willing to license new biology in hot therapeutic areas. Immunology could see a similar trend if, say, a new pathway  shows promise, large companies will aggressively license or acquire. The incoming wave of biosimilars for antibodies like Stelara and Soliris will intensify the need for next-gen immunology drugs, potentially accelerating licensing deals for innovative cytokine blockers, cell therapies for autoimmune disorders, or even therapeutic vaccines.. 
Regionally, expect China to remain a focal point for licensing. The 2024 flurry of China sourced deals is unlikely to be a one off. Western companies will continue scouting Chinese pipelines for high quality, relatively lower-cost assets. One potential headwind is if U.S. China relations further restrict biotech collaborations, but there is surely ways around that issue. So far, the trend is toward more collaboration, not less, but this will be an area to watch in the rest of 2025 going into 2026.

In summary, the licensing deal landscape in oncology and immunology is vibrant and evolving. Early-stage deals have taken center stage, enabling pharmas to bet on the future of cancer and immune disease treatment.
 from ADCs and bispecifics to protein degraders and cell therapies  while later stage deals provide crucial nearer term pipeline boosts.
The concentration of activity in areas like ADCs and the China to West deal flow are clear signals of where innovation is perceived to lie. As we move through 2025 into 2026, all signs point to a sustained or even heightened pace of deal making. The looming patent cliff acts as a continual incentive for large companies to hunt externally for the next big therapy. For biotechs, this environment presents rich opportunities: those with compelling early data or differentiated modalities can attract impressive deals, even at preclinical stages. We can expect a continued blurring of lines between “early” and “late” stage deal values, especially when strategic imperatives  like staying ahead in oncology or immunology  are at stake. In the late 2020s, the winners in pharma will likely be those that successfully leveraged licensing and partnerships now to usher in new waves of therapies for patients in need.

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Author: Kristoffer Danielsson
Founder & CEO
Jarlen Capital
Email: Kristoffer@jarlencapital.com