The Competitive Landscape of the Healthcare World Cup

Good morning Armchair Army,

Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.

Big industries like healthcare don't just operate at the local level.

There's a world stage.

A World Cup of Healthcare, you might say.

And it's competitive.

(The World Cup starts this week! You bet I’ll be at the pub to watch the Socceroos vs the US on Sunday)

The NASDAQ are the top seed. 

The favourites. Deepest squad, biggest budget, best coverage.

Then you've got the mid-tier nations. 

Your European biotechs. 

A few genuine stars, but not the side you'd back to lift the trophy.

And then there's us. The ASX.

The battlers. 

We punch above our weight on game day, but we're never the favourite.

Healthcare is a competitive landscape. 

Capital and attention are driven a lot by data and M&A transactions.

Those nations that can close more deals have more capital to reinvest into the next wave of biotech talent and the next generation.

There's one nation that's been climbing the rankings, though.

China.

For the last 10 years, China has been seen as a manufacturing hub rather than an innovation hub.

The biotech industry's back-office. 

China's 14th Five-Year Plan for Bioeconomy Development (2021–2025) was the nation's first overarching strategy dedicated to the bioeconomy 

Cheap generics and contract manufacturing…

But not the builder of first-in-class drugs and IP.

By 2024, it was running nearly a third of the world's clinical trials, with lower costs, bigger patient pools, and a regulator that cleared a backlog of 20,000 applications in two years.

Then it stopped being just the back office.

In 2024, the value of drugs licensed from China to the West hit US$48 billion, fifteen times the 2020 figure. 

In 2025, the CCP made biotech a "pillar industry".

Direct R&D investment, tax incentives, subsidies, faster regulatory timelines, and a push to bring scientific talent home.

It worked.

The Chinese share of global licensing deals went from 4% to 48% between 2019 and 2025. 

US companies noticed. 

Over a recent 16-month stretch, Chinese biotechs landed roughly 6 of every 26 major pharma deals, nearly a third of the total headline value, worth around US$53 billion. 

(That’s more than the entire market cap of ASX-listed biotechs if you take out CSL)

Merck, AstraZeneca, AbbVie, Pfizer, Lilly. 

All shopping in Shanghai and Suzhou.

M&A deals in the biotech industry and big pharma companies have reached a level where Washington is starting to notice.

In December 2025, the Comprehensive Outbound Investment National Security Act (COINS) was signed into law as part of the FY2026 defence bill.

In plain English, it restricts US money flowing into certain technology sectors in "countries of concern". 

Chiefly China (now joined by Cuba, Iran, North Korea, Russia and Venezuela). 

The covered sectors started with the usual suspects…

Semiconductors, AI, quantum, supercomputing, hypersonics.

Biotech wasn't on the list.

But after a number of high-profile M&A transactions, Congress has moved quickly to restrict Biotech transactions between big pharma and China.

The figures quoted by the select committee indicated that US-China biopharma licensing could reach roughly US$136 billion in potential value since 2025, up from under US$5 billion in 2020.

Now that China has become “investible” for big pharma companies, there is a race to get their hands on the best assets.

The genie is out of the bottle, and it’s not so easy to put it back in.

So, what does this mean for Australia?

As I mentioned, the healthcare industry operates on a global stage.

If one nation is getting all the attention and capital, it means less attention and capital is going elsewhere.

In the US, biotechs are experiencing a boom.

Just yesterday, a US company called Parabilis listed on the NASDAQ in the largest ever IPO for a biotech company on the NASDAQ:

US$670M upsized IPO.

So far in 2026, a dozen drugmakers have gone public and raised a median of US$300M each.

I remember speaking to one of the Canacord corporates three weeks ago, and the equivalent biotech team in North America was having its best year on record.

Interest in investments operates like a waterfall.

(Particularly in the drug development space).

A few winners give confidence to an increasing number of speculative investments, which trickles down like a waterfall.

(When I say winners, I mean drugs that make it to market or have an exit through a licencing deal) 

Australia is still very much at the top of the waterfall, while China and the US are at the retail fever stage:

This year is set to be the biggest year for M&A transactions and licencing deals in biotech history.

Driven by money printing from weight-loss drugs like Ozempic, there has been US$211 billion spent so far on licencing deals.

Now, since the start of the year, I can only recall TWO big pharma licensing deals on the ASX:

(Let me know if I’ve missed any)

There is an old saying in the biotech space that Australia generally operates around 6 months AFTER the US.

The theory is simple.

In a big M&A cycle, once all the good assets are locked up locally, big pharma looks overseas, to places like Australia, where there is good science at relatively low prices.

BUT, I think the challenge this time has been that China's rise has started to soak up much of the M&A attention from Australia.

As I said, it's a competitive landscape on the world stage.

Without deals… the top of the waterfall doesn't fill. 

The trickle never comes.

… and the investment landscape drags.

BUT, with Congress now looking more closely at China deals from a national security perspective, it could put Australian biotech BACK in pole position.

The challenge right now is that the Australian Government is not doing the biotech industry any favours.

Recent changes to the budget are what I call the double whammy.

FIRST, the CGT changes, which make speculative investment a harder sell. The risk-on capital early biotech runs on.

SECOND, the change to the R&D time horizon. After 10 years, a company's R&D tax benefit flips from a refundable cash rebate to a non-refundable tax credit.

I have put my thoughts into an article here: Innovation Decimation: Budget to Break Biotech

And there was a great write-up in the AFR this morning as well: Budget tax changes will be ‘devastating’ for biotech sector.

(as well as some good lobbying from the sector)

To call this a massive own goal would be an understatement.

Just like the World Cup, the healthcare space is global and competitive.

The US is splashing cash to soak up as many good biotech assets as possible to refill its innovation pipelines before a number of blockbuster drugs come off patent.

This is an opportunity for Australia… and we should be grasping it with both hands.

Let’s dive in…

Emyria (ASX: EMD) published a new company presentation featuring slides highlighting its per-clinic breakeven point for its psychedelic-assisted therapy scaleup operations. (EMD)

🪑This is the clearest way that Emyria has been to showcase the pathway to profitability for its psychedelic clinics. Each one will be around breakeven at ~9-12 months, at which point it will start to print cash for the business:

Also, it was interesting to see Perth as the “case study”, with the ramp-up numbers over the first few months and the impact of seasonality:

According to Emyria’s March quarterly presentation, Perth is still operating at ~30% capacity, so there is still a lot of room to grow from here.

Emyria is one of my high conviction Armchair picks and I own 2 million shares in the company.

Argenica Therapeutics (ASX: AGN) announces the successful completion of the third and final FDA-required safety assay, demonstrating no safety concerns and advancing toward lifting the clinical hold. (AGN)

🪑 Milestone ticked, I bought some AGN yesterday as one of my five ‘tax loss sell’ trades.

LTR Pharma (ASX: LTP) secures exclusive US pharmacy fulfilment partnership with Strive Pharmacy for its intranasal erectile dysfunction treatment, ROXUS. (LTP)

ReNerve (ASX: RNV) appoints J4 Biologics as a second manufacturing partner for its nerve repair product range. (RNV)

CleanSpace Holdings (ASX: CSX) launches CleanSpace AGILE, a patented loose-fitting Powered Air Purifying respirator, targeting Europe’s industrial market. (CSX)

Imricor Medical Systems (ASX: IMR) submits the third module of its FDA Premarket Approval application. (IMR)

🪑 I think I read this right: “The submission exceeds ten thousand pages” - that’s a huge effort from the Imricor regulatory approvals team.

Regal Watch: As of last Friday, Regal Funds held 110 million shares in Opthea (ASX: OPT) - down from 366 million when it first started trading. (OPT)

🪑 Given the trading volumes of the last two days, I suspect that they would be out, or very close to it.

Microba Life Sciences (ASX: MAP) requests an extension of its voluntary suspension to finalise its capital raise. (MAP)

🪑 It’s never good when you extend the suspension.

Vitasora Health (ASX: VHL) raises $4.0M at $0.01 per share, including a $3.0M strategic investment from private investor Bob Peters. (VHL)

🪑 That’s a decent cornerstone investment. Bob is a notorious horse breeder and a top shareholder in MEM and PCK.

Syntara Limited (ASX: SNT) has completed a Share Purchase Plan (SPP) raising $0.84M at $0.027 per share, bringing total funds raised, including a prior placement, to $8.84M. (SNT)

See you all tomorrow,

The Armchair Analyst