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China's Big Pharma makes strides
April 22, 2013, Monday
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ONE of seven priority industries championed by China's 12th Five-Year Plan, China's biopharmaceutical sector is on the go.
Once predominantly focused on producing generics and performing contract research for Western companies, the industry is developing at a rapid clip in China.
Spurred by generous government investment and the return of thousands of China-born, Western-trained researchers and managers, more Chinese companies are now engaging in new drug discovery, and foreign pharmaceutical companies, large and small, are clamoring to set up partnerships with them.
Yet, say experts, even as China is emerging as a new center for pharmaceutical research, the industry is still in its early days.
"China is still in a stage where there's a lot of work to be done to catch up in innovative content," says Zhihao Yu, a biotechnology industry analyst at Boston-based Lux Research.
Still, "with so much investment going on now in the biopharmaceutical industry, these pieces will all fall into place eventually," says Sarah Frew, director of business and commercial development at Malvern, Pennsylvania,-based TetraLogic Pharmaceuticals, co-founded by former Princeton University microbiology professor Yigong Shi, now dean of Tsinghua University's School of Life Sciences in Beijing.
Multinational pharmaceutical companies, facing patent cliffs and weakening R&D portfolios, see significant potential in China, says Frew, who holds a Wharton MBA and a PhD in cancer biology from the Massachusetts Institute of Technology and has written extensively about the Chinese industry.
Stephen M. Sammut, a Wharton School lecturer and biotech venture capitalist, takes a measured outlook also: "We may be five to 10 years away from seeing something in China that begins to duplicate what is happening elsewhere in the US, for example," he says.
Domestic market
Chinese companies have plenty on their plate now, creating drugs to serve the Chinese population. "There's a great desire in China to see Chinese-developed molecules targeting the Chinese population, rather than Big Pharma dictating what drugs get developed and bringing them to China," says Robert Nelsen, the Seattle-based co-founder of ARCH Venture Partners, an investor in Shanghai biopharmaceutical company Hua Medicine.
At this point, the ability to come up with breakthrough innovations is "not the issue," agrees Charles Hsu, adviser to Shanghai-based venture capital firm Mustang Ventures. Rather, the focus is "to meet enormous unmet needs in China," he says. "You don't need the next Avastin or Herceptin, but an effective and efficient way to deliver tried and true treatments to a billion people. It's not the same level of inventive science as in the US, partly because it doesn't yet need to be. But China is rapidly acquiring the ability to innovate - it's just a matter of time and priorities."
Indeed, "one of the strategic issues for China and the Chinese industry is whether to focus on the disease burden of their own society or Western diseases for the purpose of selling overseas," says Sammut. "All indications are that they're focusing on needs of their own population, and if a particular drug has universal benefit, so much the better. That drug can be sold in the US and Europe."
Bringing back talent
China's central, regional, and local governments are investing heavily into the sector.
Government policies supporting the industry have reaped outsized benefits. In 2008, the central government launched the Thousand Talents program to bring back 2,000 high-level Chinese-born science and technology academics and professionals over the next five to 10 years.
More than 2,000 have returned under the program so far, including star Princeton professor Yigong Shi, now at Tsinghua. Altogether, some 80,000 life science professionals have gone back to China, lured by heady opportunities and government funding in the sector, if not the Thousand Talents program itself, according to a 2010 Monitor Group study.
Building bench strength
Western-trained scientists and global-spanning partnerships can help accelerate China's drug development acumen, but China is far more behind when it comes to nurturing the deep bench strength required for basic research and blockbuster drug discovery.
Few of China's universities and research institutions teach or practice the risk-taking mindset that has fueled US innovation in life sciences, though China is starting to establish a few such institutions.
Still, the addition of China to the world biopharmaceutical industry is a plus, says TetraLogic's Frew. "Multinational pharmaceutical companies are not replacing drugs going off patent with an innovative pipeline," she notes. "We need to expand opportunities where innovation will come from. This is not taking away from scientists at MIT and Harvard and giving to scientists at Beijng and Tsinghua Universities. It just expands the pie to take advantage of all the available brain power."
Adapted from China Knowledge@Wharton, http://www.knowledgeatwharton.com.cn. To read the original, please visit: http://www.knowledgeatwharton.com.cn/index.cfm?fa=article&articleid=2756
Once predominantly focused on producing generics and performing contract research for Western companies, the industry is developing at a rapid clip in China.
Spurred by generous government investment and the return of thousands of China-born, Western-trained researchers and managers, more Chinese companies are now engaging in new drug discovery, and foreign pharmaceutical companies, large and small, are clamoring to set up partnerships with them.
Yet, say experts, even as China is emerging as a new center for pharmaceutical research, the industry is still in its early days.
"China is still in a stage where there's a lot of work to be done to catch up in innovative content," says Zhihao Yu, a biotechnology industry analyst at Boston-based Lux Research.
Still, "with so much investment going on now in the biopharmaceutical industry, these pieces will all fall into place eventually," says Sarah Frew, director of business and commercial development at Malvern, Pennsylvania,-based TetraLogic Pharmaceuticals, co-founded by former Princeton University microbiology professor Yigong Shi, now dean of Tsinghua University's School of Life Sciences in Beijing.
Multinational pharmaceutical companies, facing patent cliffs and weakening R&D portfolios, see significant potential in China, says Frew, who holds a Wharton MBA and a PhD in cancer biology from the Massachusetts Institute of Technology and has written extensively about the Chinese industry.
Stephen M. Sammut, a Wharton School lecturer and biotech venture capitalist, takes a measured outlook also: "We may be five to 10 years away from seeing something in China that begins to duplicate what is happening elsewhere in the US, for example," he says.
Domestic market
Chinese companies have plenty on their plate now, creating drugs to serve the Chinese population. "There's a great desire in China to see Chinese-developed molecules targeting the Chinese population, rather than Big Pharma dictating what drugs get developed and bringing them to China," says Robert Nelsen, the Seattle-based co-founder of ARCH Venture Partners, an investor in Shanghai biopharmaceutical company Hua Medicine.
At this point, the ability to come up with breakthrough innovations is "not the issue," agrees Charles Hsu, adviser to Shanghai-based venture capital firm Mustang Ventures. Rather, the focus is "to meet enormous unmet needs in China," he says. "You don't need the next Avastin or Herceptin, but an effective and efficient way to deliver tried and true treatments to a billion people. It's not the same level of inventive science as in the US, partly because it doesn't yet need to be. But China is rapidly acquiring the ability to innovate - it's just a matter of time and priorities."
Indeed, "one of the strategic issues for China and the Chinese industry is whether to focus on the disease burden of their own society or Western diseases for the purpose of selling overseas," says Sammut. "All indications are that they're focusing on needs of their own population, and if a particular drug has universal benefit, so much the better. That drug can be sold in the US and Europe."
Bringing back talent
China's central, regional, and local governments are investing heavily into the sector.
Government policies supporting the industry have reaped outsized benefits. In 2008, the central government launched the Thousand Talents program to bring back 2,000 high-level Chinese-born science and technology academics and professionals over the next five to 10 years.
More than 2,000 have returned under the program so far, including star Princeton professor Yigong Shi, now at Tsinghua. Altogether, some 80,000 life science professionals have gone back to China, lured by heady opportunities and government funding in the sector, if not the Thousand Talents program itself, according to a 2010 Monitor Group study.
Building bench strength
Western-trained scientists and global-spanning partnerships can help accelerate China's drug development acumen, but China is far more behind when it comes to nurturing the deep bench strength required for basic research and blockbuster drug discovery.
Few of China's universities and research institutions teach or practice the risk-taking mindset that has fueled US innovation in life sciences, though China is starting to establish a few such institutions.
Still, the addition of China to the world biopharmaceutical industry is a plus, says TetraLogic's Frew. "Multinational pharmaceutical companies are not replacing drugs going off patent with an innovative pipeline," she notes. "We need to expand opportunities where innovation will come from. This is not taking away from scientists at MIT and Harvard and giving to scientists at Beijng and Tsinghua Universities. It just expands the pie to take advantage of all the available brain power."
Adapted from China Knowledge@Wharton, http://www.knowledgeatwharton.com.cn. To read the original, please visit: http://www.knowledgeatwharton.com.cn/index.cfm?fa=article&articleid=2756
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