SHANGHAI-Chinese biotech companies, rapidly evolving from manufacturers of low-end generic drugs to serious competitors to American pharma giants, are training their sights on one of the most lucrative medicines: GLP-1s.

Today Eli Lilly and Novo Nordisk, with drugs like Mounjaro and Ozempic, are the undisputed leaders of the $80-billion global GLP-1 market, which is dominated by U.S. sales.

But Chinese biotechs are pouring in, hoping to steal a slice of the weight-loss drug market. There are currently nearly 250 Chinese competitors in the research pipeline, according to data provider PharmCube. More than 20 of those treatments are already licensed overseas.

One example is Vincentage Pharma, a five-year-old company that is on track to become one of the first oral GLP-1s developed in China. In late 2024, the company, which has just 50 employees, secured a licensing deal to sell the drug, called VCT220, to overseas markets like the U.S.

"It's like a 100-meter sprint: From the first step, we have gone very quickly," said Feng Chen, Vincentage's chief medical officer.

It caught the eye of Corxel Pharmaceuticals, the biotech firm that licensed VCT220, partly because the drug causes fewer side effects like nausea and vomiting than other GLP-1s.

"It's a very tiny company," said Sandy Mou, chief executive of Corxel, which completed a Phase 2 trial for the drug in the U.S. this summer and aims to seek Food and Drug Administration approval for the treatment. "They can still deliver so much."

In the last two decades, China has transformed from a basic manufacturer of generics and precursor chemicals into a hotbed of scientific discovery, boosted by government support and low operating costs. Global pharmaceutical companies are now trawling for promising drugs from labs in biotech centers such as Shanghai and Suzhou. Last year, China licensed more than $130 billion in new drugs overseas, across cancer, weight-loss and immunology therapies, according to PharmCube.

"The growth has been remarkable," said Todd Liao, a partner at Morgan Lewis in Shanghai who has worked on biotech licensing deals. "Deal volume has gone from essentially negligible prior to 2020 to well over $100 billion...with GLP-1 and obesity among the hottest areas within that."

Global giants like AstraZeneca, Merck and Novo Nordisk have all landed licensing agreements worth billions to secure the next big Chinese obesity drug. No China-origin GLP-1s have received FDA approval so far, but several are undergoing clinical trials in the U.S. and elsewhere.

In April, Kailera Therapeutics, whose business is based on GLP-1 drugs from China-based Jiangsu Hengrui Pharmaceuticals, raised more than $700 million in a Nasdaq initial public offering. Kailera is currently conducting global clinical trials for the Hengrui-originated treatments.

The recent GLP-1 breakthroughs in China are largely incremental rather than revolutionary, experts say. Still, for patients in the U.S. seeking to shed pounds, the potential influx of new weight-loss therapies from China may push down drug prices and provide a wider array of treatment options.

Chinese biotechs are pushing overseas in part because the domestic market is far less lucrative. China has a large-and growing-obesity problem and counts nearly 150 million diabetic adults. But the slice of the population taking GLP-1s is small compared with the U.S., while drug pricing is far lower in China. The national drug reimbursement system also covers the medications only for diabetes, not obesity, forcing most patients to pay out of pocket.

"Making money can be very hard" in the Chinese biotech industry, said Leon Tang, founder of InScienceWeTrust BioAdvisory, which helps broker connections between Chinese and international biotech firms.

That pricing squeeze in China is also hitting Novo Nordisk, the Danish pharmaceutical giant that developed Ozempic and now sells GLP-1s in China for diabetes and obesity. Under pressure from Chinese upstarts, the company saw an 8% drop in net GLP-1 sales in China in 2025 and lowered the list price of two such products in that market earlier this year. The company is soon set to face a flood of generic alternatives, after the patent for semaglutide, the key component of Ozempic, expired in China earlier this year.

"The competition is quite intense," said Hai Pan, the CEO of Sciwind Biosciences, a Hangzhou-based drugmaker developing GLP-1s. "But competition makes you better."

London-based Verdiva Bio signed a deal with Sciwind to license three of its metabolic drugs last January for the global market, in a deal potentially worth $2.4 billion. Verdiva is conducting Phase 2 clinical trials in the U.S. for one of Sciwind's oral therapies.

Just like in other cutting-edge fields in China, biotech companies benefit from state support. Beijing has poured billions into the industry as part of its self-sufficiency drive and sought to attract legions of scientists working overseas to do pioneering research in Chinese labs.

Speed and cost are also important factors. The clinical trial process in China is more efficient, biotech executives say. Trials are concentrated at a few large public hospitals with vast patient populations.

China's biotech hubs also have a dense network of specialized contract research organizations, or CROs-which are critical for running clinical tests-allowing researchers to quickly transform scientific hypotheses into results. Executives at Sciwind, for instance, say that the company is located nearby its CRO, allowing them to check on research progress daily.

More than 30% of all global clinical trial launches were in China last year, up from 1% in 2009, according to the Cure Innovation Index. Phase 1 trials in China cost half what they do in the U.S.

"This is our competitive advantage in the global market: It is much more efficient and cheaper," said Matthew Qiu, head of public affairs for Innogen Pharmaceutical, a Shanghai-based biotech firm that received Beijing's approval for its weekly injected GLP-1 last year.

Biotech experts expect that GLP-1s from China will gradually upgrade from fast-follower drugs to groundbreaking treatments. Cancer therapies, for instance, are already trying to make this shift.

"You must develop step by step-you cannot jump to first-in-class drug when you just start," Sciwind's Pan said. "You should learn how to make generics first, then how to make 'me too' drugs, then 'me better' drugs, then innovative drugs. It's a process."

Selling treatments overseas is still difficult for small Chinese biotech firms, whose drugs need to go through U.S. clinical trials, FDA approval and commercialization in an increasingly crowded weight-loss market.

International licensing agreements make the process of marketing and distributing drugs easier and can help Chinese firms conduct clinical trials outside of China, which typically leads to smoother FDA approval.

But the biotech licensing boom is facing mounting U.S. regulatory scrutiny as politicians have grown more concerned about China's biotech rise. U.S. Congress is considering a bill to screen outbound investment in the biotech industry, and lawmakers have also proposed banning any FDA consideration of Chinese clinical trials due to concerns about data reliability and transfer of scientific know-how to Beijing.