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June 6, 2016

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New Novartis hub to promote pharma innovation

SWISS pharma giant Novartis recently unveiled a US$1 billion research and development center in Shanghai as part of Novartis Institutes for BioMedical Research.

The new facility is the third of its kind for Novartis, following similar set-ups in Basel, Switzerland, and in Cambridge, Massachusetts. The seven-building hub in Shanghai, located in the Zhangjiang High-Tech Park in Pudong, has the capacity for 1,300 workers. It is aimed at encouraging local innovation in the pharmaceutical field.

Shanghai Daily sat down for an exclusive interview with Novartis Chairman Joerg Reinhardt, who attended the Zhangjiang-Novartis Innovation Forum last week, and discussed the company’s growth strategy in China.

Q: Where does China fit in the global blueprint for Novartis? What are your growth expectations here?

A: China is among our top five markets globally, and its contribution to Novartis will grow faster than those of the US or Europe. In a number of years, we expect China to be our third-largest market after the US and Japan.

We hope local research and development results will contribute to our global business and we hope to drive for “Invented in China, made in Switzerland” strategy in the future. For example, this year we will start a clinical trial globally for one of the molecules for cancer treatment, which is a research outcome from our Shanghai team. It’s a first for us — and probably for the whole industry — to have a compound developed in China with the potential to enter the global market.

Q: Growth in China’s pharmaceutical market has fallen below double digits. Where do you go from here?

A: Despite overall growth slowing in China, we expect growth here to be stronger than in the EU or US in the coming years.

There has been a backlog in the introduction of innovative medicines in China. Government officials have told us they will try to accelerate the process, and we expect the situation to improve in the next two to three years. We’re happy to see improvements in the process for clinical trial approvals as well as for imports.

Novartis has been active in areas such as cancer, heart failure treatment, respiratory drugs, arthritis and a number of new drugs that will come to the market in the next few years. They will sustain our future growth here.

Q: Why did you choose Zhangjiang to set up your new R&D center?

A: For us, the most important resource at this site is talent, and access to world-class talent is mandatory. Overseas talent is increasingly attracted to carrying out research in China.

In the Zhangjiang High-Tech Park, international companies are setting up R&D facilities, creating a stimulating environment. We also provide talented people with a unique opportunity here to take part in something with global impact.

Q: What do you think of the rising use of digital opportunities by health facilities, patients and consumers?

A: New digital technologies will play their role in the overall public health system. The pharma industry is able to collect data from the real-life environment that helps us develop new medicines and define the efficacy of existing ones.

Our own business itself won’t be very much engaged in the digital trend, but we will certainly benefit from it.

Q: How do you view Shanghai’s effort to transform itself into a global hub of innovation?

A: We set up a center in Cambridge, Massachusetts, around 15 years ago, and we’ve experienced similar situation back then, with interaction between multinational corporations and startups. Small companies and multinational giants can benefit from each other. Talent aggregates in such an environment. However, in China, there is still room for improvement. The regulatory system here needs more supportive measures for foreigners to live in China.

A place like Zhangjiang is a perfect setting for mixing industrial and residential needs. Combining living and working is an important trend for the younger generation. Further investment in universities here would also be helpful in addressing a shortage in the skilled work force in biological fields.


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