Same Litre of Capacity, Two Prices: Foreign CDMO Moves in China Are an Asset Repricing

On 21 October, Spain's ESTEVE CDMO said it would invest more than USD 80M to relocate, expand and modernise its Shaoxing site: three workshops, 250 m3 of reaction volume, 150 m3 reserved, expandable past 400 m3. In the same month, Boehringer Ingelheim's 6,000-litre Zhangjiang biologics plant went to Shanghai RAAS for a nominal RMB 1 base price and no more than RMB 20M - a site that cost over EUR 70M in 2017, lost RMB 73.3M in 2024 and RMB 259.3M in 2025. Between the two lies one question: in China, which capacity is still worth paying for.

October 2026 produced two transactions in China's CDMO market that point in exactly opposite directions.

One is entry. On 21 October, the CDMO division of Spanish family-owned ESTEVE announced an investment of more than USD 80M to relocate, expand and modernise its Shaoxing site: three manufacturing workshops, 250 m3 of total reaction volume with 150 m3 reserved for expansion, a potential footprint above 400 m3, a purpose-built centralised control centre, integrated automation and digitalisation, and a BREEAM Very Good rating.

The other is exit. On 23 September, Shanghai RAAS announced a cash acquisition of 100% of Boehringer Ingelheim Biopharmaceuticals (China). The target sits in Zhangjiang, Shanghai, with 6,000 litres of mammalian-cell commercial capacity and a drug manufacturing licence - a scarce large-molecule platform in China. Pricing followed a cash-free, debt-free principle with a nominal base price of RMB 1 and an expected final payment of no more than RMB 20M. The plant opened in 2017 after more than EUR 70M of investment; it lost RMB 73.29M in 2024 and RMB 259.31M in 2025.

Do the per-litre arithmetic first

Put both deals on the same ruler - capital cost per litre of capacity - and the picture resolves.

Boehringer's Zhangjiang site cost over EUR 70M for 6,000 litres in 2017, roughly EUR 11,700 per litre. The 2026 second-hand price of no more than RMB 20M is about EUR 2.4M at 8.3, or roughly EUR 400 per litre. Nine years on, the transaction value is 3% to 4% of the original build cost.

ESTEVE sits at the other end. USD 80M for 250 m3 - 250,000 litres - is about USD 320 per litre, roughly RMB 2,300 per litre; spread over the 400 m3 potential footprint it is about USD 200 per litre. That is a new-build price, and it includes a premium for spray drying, high-potency API handling, automation and green building certification.

The units are not the same ruler: biologics capacity is measured in culture litres, small-molecule capacity in reactor cubic metres, so the two do not compare on technical difficulty. But two deals in the same country in the same month, at RMB 400 per litre second-hand versus RMB 2,300 per litre new-build with a technology package, say one thing clearly: capacity itself is no longer scarce in China. What is scarce is irreplaceability along a specific capability axis.

The exit is a timeline, not a mood

Line up the foreign CDMO moves in China over five years and the direction is consistent - and almost always the same asset type: large-molecule, heavy-asset capacity aimed at domestic Chinese orders.

In 2021 Pfizer sold its Hangzhou biologics drug substance and product site to WuXi Biologics, the earliest of the exits. In 2023 Merck transferred its Zhangjiang manufacturing site to Guangzhou-based Hanteng Biologics; Merck did not formally confirm the deal but said its China CDMO business had undergone an important transformation. Thermo Fisher's Hangzhou plant, opened in 2022 with 80,000 m2 of clinical and commercial drug substance plus sterile fill-finish, ran into insufficient orders almost immediately; a plan for partner Innoforce to take the site over did not close, and its fate remains unresolved. Lonza's Guangzhou large-molecule plant, bought from GE Healthcare in 2018 for close to USD 100M and commissioned in 2021, was sold to Joinn Biologics in January 2025 - under four years from start-up to sale.

What these five deals share is not a loss of faith in China. It is that the model of selling China capacity to the China market stopped working: the customer base was overestimated, leading biotechs preferred to build in-house, smaller biotechs ordered in small volumes and were highly price-sensitive, domestic leaders compressed on cost, responsiveness and modality coverage, and service pricing built on Western drug-price levels had no room in China.

Other ways in: sell compliance, buy a modality, embed lightly

Foreign players did not leave China wholesale; they changed how they enter, and each route carries different asset economics.

The first is to build capacity, which is ESTEVE's move. It is not a bet on total market size but on complex small-molecule API as a niche: ESTEVE entered China in 2000, more than a quarter of a century ago; group revenue was EUR 828M in 2025 and is guided to EUR 950M this year, with third-party manufacturing contributing 58%. CDMO president Joan Petit framed it as bringing capabilities closer to Asian customers - the keyword being closer, not cheaper.

The second is to sell compliance. Vetter has no manufacturing in China, only sales offices, and sells sterile fill-finish from Germany, Austria and the US back into Chinese companies' outbound needs: drug substance at home, drug product abroad. It carries none of the Chinese overcapacity risk and still shares in the outbound boom.

The third is to buy a modality. CordenPharma signed to acquire AmbioPharma in May 2026 and closed in August, integrating the Shanghai site as a peptide manufacturing node - a bet on GLP-1-driven scarcity, with the peptide CDMO market projected to grow from about USD 4.8B in 2025 to about USD 12.6B by 2032 at roughly 15% CAGR. In the same geography, large-molecule capacity is being sold and peptide capacity is being bought; the asset economics invert completely.

The fourth is light embedding. NorthStar entered radiopharma through a registration-agent plus local-labelling model: Ac-225 has a roughly 10-day half-life and global output under 2 curies a year, so every step of cross-border shipping and labelling burns shelf life. It has to push terminal production into China without owning a plant.

Editor's read: three implications for Chinese CDMOs

First, the capacity-scarcity narrative is over; capacity is now priced by capability. A large part of ESTEVE's USD 80M buys HPAPI handling, spray drying and automation - capabilities only a handful of players worldwide can offer. Standard 6,000-litre mammalian capacity, by contrast, now clears in China at close to residual value. Book values of self-built capacity need an honest re-rating, especially at large-molecule sites running structurally below 60% utilisation.

Second, the function of the China node is shifting from manufacturing destination to supply-chain node. Vetter's substance-at-home/product-abroad, NorthStar's US isotope plus Chengdu labelling, CordenPharma's Shanghai peptide node: in all three, China is no longer where things are made because it is cheap, but the segment of the chain that has to sit here. That changes pricing directly - price the node, not the litre.

Third, the number worth watching over the next two years is not who added how many litres but whose legacy assets are being taken over, by whom, at what price. The real significance of the Shanghai RAAS deal is not CDMO at all: it buys process transfer and commercial capacity for SR604, a first-in-class haemophilia antibody against activated protein C - converting an outward-facing CDMO platform into captive capacity. When capacity is in surplus, the most rational buyer is often not a CDMO but a drug company with a pipeline and no plant.

Which is why ESTEVE's USD 80M is small on the global map - Lonza alone paid CHF 1.1B for the Vacaville site and will spend about CHF 500M more upgrading it. The amount does not matter; the direction does. While the leaders talk about regional supply-chain resilience and a high-thirties margin target, a mid-sized European CDMO that has been in China for 26 years adds to small-molecule API. It is betting on irreplaceability in one specific capability, not on a market's total volume.