Understand partnering in China by understanding the journey
Only 12 years ago, China’s biotech sector was filled with abundant enthusiasm but could not compete in the global drug-development market. The enthusiasm began as the Chinese government declared biotech as one of the national priorities for their twelfth Five-Year Plan — a goal that was ambitious and necessary to move Chinese economy from a low-cost cheap-goods exporter to a new economy capable of innovation in high tech, biotech, and advanced materials. Given the global geopolitical direction and the rapid increase in healthcare needs from the aging population after four decades of the one-child policy, this was critical to China’s goal of becoming a powerful nation again, explicitly announced by Xi Jinping during his second term.
With this marching order and the accompanying government subsidies and enabling policies, Chinese biotech companies sprouted like bamboo shoots after the first spring rain (using a direct translation from a Chinese proverb), and the first waves of companies invariably jumped into biosimilars. It was commonly believed that because China had achieved reasonable success as an active pharmaceutical ingredient (API) supplier for the world’s generic drugs by mid-2010, then it could also become a sizable player in biosimilars and achieve huge financial rewards when the pending patent expired for some of the blockbuster biologics. However, this seemingly feasible path did not come to fruition as expected. Instead, several forces have reshaped the industry in the past decade.
The wave of returning talent: After the 2008 financial crisis, many highly trained and talented Chinese-born scientists lost their jobs in the R&D functions of multi-national pharmas and biopharmas and decided to return to China. Such “reverse brain drains” planted the seeds of a world-class R&D workforce. These individuals brought scientific and technical rigor from their experience from top academic labs, leading global pharmas, and exposure to the expectations of truly innovative R&D programs that lead to developable drug candidates from Western standards.
Government strategy backed by real investment: As one of the national strategic priorities, China’s biotech push was significantly funded by central and local governments and private industrial investors (largely by investment redirected from IT and real estate). In addition, those direct investment policies supported the rapid birth and growth of the biotech industry through use of land, buildings at little to no cost, talent rewards from the US and Europe, significant subsidies, and reimbursement opportunities for successful milestones. The support was not symbolic; it meaningfully expanded the scientific and technical knowledge base and the infrastructure needed for early development of the new biotech industry.
Expansion of drug modalities: China’s biotech evolution has adjusted through gradual understanding and changing priorities on therapeutic modalities. The rapid transition from generics to biosimilars did not happen, as aforementioned, due to the significant differences in the complexity of biologics compared with small molecule generics, particularly in CMC and experience in manufacturing and good manufacturing (GMP) quality. Faced with a much slower progress for their biosimilar efforts, a large number of biosimilar companies had to quickly find new ways to survive, and that started the advent of the immuno-oncology era; shortly after the first approval of Opdivo (Bristol Myers Squibb) and Keytruda (Merck) in the West, having an anti-PD-1 monoclonal antibody (mAb) on their portfolio became a “rite of passage” for Chinese biotech companies to secure new investment. At one point, the race resulted in over 100 anti-PD-1 clinical trials at similar stages; 15 such products have been approved in China so far. At each of these waves, many companies failed to advance their original ambitions, some before they even started operations. Rapid changes and adaptations then followed, largely in pursuit of me better (production of high-quality products to gain global leverage) from the cycle of me too (rapid, inexpensive manufacture of products similar to those already on the Western market) to stand out amongst the competitions. This inevitably propelled the engine of biotech innovation in China. Between 2017 and now, the following therapeutic modalities have been pursued with China’s now trademark style and speed: bispecific (or trispecific) antibodies, antibody–drug conjugates (ADCs), chimeric antigen receptor (CAR) therapies, stem cell therapies, gene therapies, and RNA-related therapeutics. Each of these modalities grew rapidly, and overlapping ripples and occasional tsunamis have produced experiences and capabilities that now form the backbone of China’s biotech R&D and early-stage development strengths.
Today, China is widely recognized as a globally competitive early R&D hub. Its biotech sector excels in discovery, preclinical development, and early-stage clinical–ready assets across multiple modalities.
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