In recent years, M&A in the global biopharmaceutical sector has remained highly active. According to incomplete statistics, in the first four months of 2025 alone, multinational pharmaceutical companies concluded 38 major transactions with a total value reaching USD59.6 billion.
These transactions have taken various forms including equity acquisitions and intellectual property licensing, and have spanned multiple therapeutic areas such as oncology, metabolism, immunology and inflammation, and rare diseases. This vividly demonstrates the vitality and transformation of the global pharmaceutical industry.
At the same time, antitrust reviews in multiple countries have become a significant factor affecting M&A transactions. A single transaction may trigger antitrust filings and reviews in several jurisdictions. An antitrust filing is generally a statutory prerequisite for the completion of a transaction, influencing the process and even the outcome of the deal, and introducing potential risks.
This article briefly introduces the main types of pharmaceutical M&A transactions that are subject to antitrust review to assist enterprises in better identifying antitrust filing obligations and risks in overseas transactions.
Equity acquisition transactions
Partner
Han Kun Law Offices
Tel: +86 188 0134 4864
E-mail:
angus.xie@hankunlaw.com
Equity acquisition transactions are the most common form of M&A in the pharmaceutical industry and are also the primary type of transaction that triggers antitrust review.
In most countries, a transaction will trigger an antitrust filing obligation if it simultaneously meets two requirements: It constitutes a concentration of undertakings, and it meets the relevant filing thresholds, specifically:
(1) Constitution of a concentration of undertakings. In most countries, if a transaction results in the acquirer obtaining control over the target company, it constitutes a concentration of undertakings. This standard is also known as the “change of control standard”.
It is important to note that the determination of control for antitrust purposes differs from that under company law and accounting standards. The core consideration is whether the acquirer can exert significant influence over the target’s business decisions.
Therefore, even the acquisition of a minority equity interest, without consolidation in financial statements, may still be deemed as obtaining control under the antitrust law perspective. Transaction parties must make a comprehensive assessment based on this standard.
In addition, some countries do not adopt the change of control standard, but instead use shareholding ratios as the basis for determination. For example, in South Korea, acquiring 20% or more of another company’s shares may constitute a transaction subject to antitrust filing. Consequently, even if a transaction does not lead to a change of control or significant influence, it may still trigger antitrust filing obligations in certain jurisdictions, and companies must assess accordingly.
(2) Meeting the filing thresholds. Where a transaction constitutes a concentration of undertakings and satisfies the relevant filing thresholds, a filing obligation may be triggered. Typical thresholds include turnover, assets, market share, and transaction value. Among these, turnover thresholds are the most common ones.
For example, in China, if the combined turnover of all parties to the transaction within China exceeds RMB4 billion (USD560 million) or their combined global turnover exceeds RMB12 billion, and at least two parties each have turnover within China exceeding RMB800 million, the transaction will trigger China’s antitrust filing obligation.
In most countries, turnover or asset thresholds are based on the relevant data of the transaction parties within that country. Therefore, after confirming that a transaction constitutes a concentration of undertakings, it is crucial to thoroughly review the turnover and asset allocation of the transaction parties in each country to determine whether a filing obligation is triggered.
Licensing-out transactions
IP licensing-out is also a key transaction model for Chinese innovative pharmaceuticals going global. In 2024, the total number of license-out transactions involving Chinese innovative drugs reached 98, with the disclosed total transaction amount standing at USD59.6 billion.
The pipelines licensed in IP transactions are typically at the research and development stage, and have not yet generated sales revenue. As a result, such licensing transactions generally do not trigger antitrust reviews in most countries.
However, jurisdictions such as the US have a distinctive approach to antitrust review of pharmaceutical licensing transactions. Under US antitrust regulations, exclusive licensing in the pharmaceutical sector is regarded as an asset transaction. If the reporting thresholds are met, this triggers a US antitrust filing obligation. Even if the exclusive licence is limited to a specific region or particular use, it may still be considered an asset transaction.
US antitrust filing thresholds
Size of transaction test. The value or transaction amount (whichever is higher) of the acquired assets, namely the IP subject to the exclusive licence, must exceed USD126.4 million.
Size of person test. If the transaction size is between USD126.4 million and USD505.8 million, at least one party must have US sales or assets exceeding USD25.29 million, and the other party must have US sales or assets exceeding USD252.9 million. If the transaction size exceeds USD505.8 million, the filing threshold is met directly.
For new drugs under development, the valuation must be based on the acquirer’s good-faith assessment of the current value of the drug. If the scope of the licence includes regions outside the US, the asset value corresponding to the US must be calculated based on the drug’s sales prospects in the US market.
In practice, a growing number of domestic innovative pharmaceutical companies have made antitrust filings in the US when conducting licensing-out transactions. For example, in May 2025, 3SBio announced an agreement with Pfizer, granting it exclusive rights to develop, manufacture and commercialise the company’s independently developed breakthrough PD-1/VEGF bispecific antibody SSGJ-707 worldwide (excluding mainland China). In July 2025, this exclusive licence passed US antitrust review, and the agreement formally took effect.
In March 2025, United Laboratories entered into an exclusive licence agreement with Novo Nordisk, granting the latter exclusive rights to develop, manufacture and commercialise UBT251 globally outside China. In June 2025, this licence passed US antitrust review, and the agreement formally took effect.
According to US filing requirements, both the licensor and licensee must separately submit antitrust filings to the US antitrust enforcement agencies. After both parties have filed, a 30-day waiting period begins. If the period expires without objection from the enforcement agencies, the transaction passes antitrust review and may proceed.
If, during this period, the enforcement agencies issue a second request, indicating potential competition concerns and requesting further information, the review period will be significantly extended.
Angus Xie is a partner at Han Kun Law Offices. He can be contacted by phone at +86 188 0134 4864 and by email at angus.xie@hankunlaw.com
