US firm ArriVent’s plunge shows risks facing China’s biotech expansion into global markets

US firm ArriVent BioPharma’s shares plummeted after a late-stage trial failure involving a cancer drug licensed from China, a setback that analysts said highlighted the challenges facing Chinese biotech companies expanding overseas.

New York-listed ArriVent closed down nearly 47 per cent on Tuesday after reporting that its cancer treatment firmonertinib failed to meet its main goal in a phase 3 trial.

Firmonertinib was originally developed by Shanghai Allist Pharmaceuticals to treat non-small cell lung cancer (NSCLC), targeting epidermal growth factor receptor gene mutations including exon 20 insertion.

ArriVent acquired the exclusive rights in 2021 to develop and commercialise the drug outside China, becoming one of the earliest US biotechnology firms licensing Chinese drug assets.

The company said its phase 3 trial failed to demonstrate that firmonertinib could significantly delay disease progression compared with standard chemotherapy treatment.

ArriVent chairman and CEO Bing Yao said in a statement that the “disappointing” results were “not what we hoped for”, and that the company was evaluating the full trial dataset to determine the “most appropriate development path” for the drug.

The failed overseas trial highlighted a key reality for Chinese drug makers – that commercial success in China did not guarantee clinical success in new indications or overseas markets, said David Zhang, analyst at Trivium China.

Allist’s firmonertinib is approved in China for three types of NSCLC treatment and generated about 3.14 billion yuan (US$468 million) in sales in the first half of 2026.

The company said in August that the drug helped lift its first-half revenue by nearly 40 per cent from a year earlier.

Shanghai-listed Allist did not trade on Wednesday amid mainland China’s National Day holiday from October 1 to 7.

Chinese biotech firms have expanded rapidly overseas in recent years as global pharmaceutical giants increasingly turn to China for innovative therapies.

Zhang said the rapid growth in cross-border partnerships did not eliminate the risk inherent in drug development.

“This setback highlights the clinical uncertainty that remains even for an established product,” Zhang said. “As more Chinese drugs enter global trials, we should expect more visible failures alongside the successes.”