HONG KONG—Xian-Ping Lu left his job as director of research at drug maker Galderma R&D in Princeton, N.J., to co-found a biotech company to develop new medicines in his native China.

It took more than 14 years but the bet could be paying off. In February, Shenzhen Chipscreen Biosciences’ first therapy, a medication for a rare type of lymph-node cancer, hit the market in China.

The...