Emerging Markets
I
nnovation is a word which has not been in China that is the main attraction. By 2010, cardiovascular disorders, and to launch
associated with China’s pharmaceutical for example, GlaxoSmithKline expects to several of these outside China. The first
industry. Some observers have likened employ more than 1,000 people at its new round of 120 or so selected projects will
its present state to that in Japan in the neuroscience R&D centre in Shanghai. receive support valued at Yuan1.5 billion.
1960s and 70s. Common generics and bulk “China’s growing talent pool of scientific A wide variety of infrastructure and other
antibiotics dominate manufacturing output, expertise is leading to the rapid support is also available to both foreign and
while R&D spending at the typical pharma development of excellence in life sciences in domestic investors, with biotech/high tech
enterprise accounts for less than 2% of general and neuroscience in particular,” the parks and clusters near major cities typically
revenues. company said upon unveiling the plan. providing tax breaks and tax deductions for
But while it took Japan around 20 years to Executives also note that investments on R&D expenses for innovative technologies.
develop its first innovative global products, the ground are indispensable to establishing
will the breakneck pace of economic links with China’s huge network of state
IP and VC
development in China mean that this research institutes, where the quality of
What are some of the other factors that
timeframe could be halved or even science is seen as high. Novartis, for example,
might spur innovation within China’s industry?
quartered? The portents are positive but sees the value of its Shanghai facility for
Stronger IP protection, access to business
change is not going to happen overnight. research into virus-induced cancers as going
development capital and shifting disease
As the argument goes, as economies and beyond the scientific. “We view it as a
patterns are all set to play a role.
per capita incomes grow, there will be more wonderful tool for interactions with local
There is little doubt that China’s IP regime
to spend on healthcare, which in turn will government, universities and other groups,
has been steadily improving since the country
create demand for novel, effective drugs and and very important for building up long-term
joined the World Trade Organization in 2001,
drive the development of the industry. relationships,” the Swiss company’s head of
and the Chinese government is now pushing
Indeed, China has already carved out an corporate research, Dr Paul Herrling,
domestic companies to use the patent
important place for itself in the R&D sector, commented to Scrip.
system to develop their own IP portfolios.
albeit as a provider of cost-competitive
“The government is already providing a lot of
contract research services to the
financial support on the IP side, although
international industry, with a focus on
The latent strategic value of
obviously this is only available to domestic
screening, medicinal chemistry and biology.
China’s vast pool of talent
firms,” Dr James Zhu, a partner at the US law
Companies such as Wuxi PharmaTech,
firm Perkins Coie told Scrip.
seems to have been recognised
recently renamed Wuxi AppTec, which
For example, the state will provide financial
floated in a highly successful US IPO in 2007,
by the country’s top leaders support to domestic firms filing Chinese or
have struck alliances with major firms
international IP applications, with the amount
including Merck & Co and AstraZeneca, and
dependent on the company and the nature of
there are numerous drug discovery tie-ups There is no arguing with the numbers.
the protection being sought, he said.
between big pharma and Chinese research Around five million people graduate from
Meanwhile, the third major amendment to
institutes. A recent survey of Asia by university every year in China, with many
China’s patent law should be approved by the
PricewaterhouseCoopers identified China as going on to doctorates and further
end of 2008 and will introduce a new
the leading location for pharma outsourcing education. On top of this, the number of
requirement for absolute novelty. Together
in the region, driven by a favourable mix of self-described “sea turtles” migrating back
with an IP blueprint released earlier in 2008,
costs, risks, expertise and market growth home after gaining valuable qualifications and
“these really set the stage for a shift to
prospects. experience abroad (often in the US) is rising
innovation by aiming to nurture a culture of IP
A growing number of foreign firms are all the time. Wuxi is one example of a highly
creation and protection,” Dr Zhu observed.
now also choosing to develop in-house R&D successful firm set up by such returnees.
Besides Wuxi, a number of Chinese
capability on the ground in China through Critically, the latent strategic value of this bioventures have already listed on western
multi-million dollar bricks and mortar vast pool of talent seems to have been bourses to gain access to the new sources of
investments. Roche, Lilly, Pfizer, recognised by China’s top leaders. Addressing capital essential to fund their expansion
GlaxoSmithKline, AstraZeneca and Novartis the People’s Congress in 2007, President Hu plans. This is likely to continue, but experts
are just some of those laying down serious Jintao highlighted the need for the country point as well to the growing availability of
money. The latter two firms are planning to to shift to an economy based more on venture capital within China, including from
pump in up to $100 million apiece, with innovation to secure its future growth and foreign investors.
oncology as a focus. place on the world stage. Apparently reassured by the money being
This desire to tap into local research Faced with continuing state R&D budget ploughed in by big pharma, several western
capabilities was not something that was seen constraints at home, European and Japanese equity funds have already made sizeable
in the early stages of multinationals’ push companies might well be envious of the investments in Chinese ventures. Among
into the Japanese market, where the focus government support already being provided them is the US group TPG, which spent
was on joint ventures for marketing to reach this goal. China has so far not shied around $30 million for a minority stake in
purposes rather than basic research. away from backing up its grand the contract research services firm
Admittedly the pharma environment was proclamations with cold cash from its ShangPharma. Whether the global credit
considerably different back then, but booming economy. For example, a crunch will restrict such sources of capital
obviously China has something that the Yuan6.6 billion ($971 million) fund under the should become clearer over the next few
industry wants. government’s “11.5” plan, which runs for five months, although pharma is expected to
While budget and political considerations years to 2011, has been set up specifically to weather the storm better than many sectors.
have certainly played their part in these support innovative drugs R&D. More than $1 billion in venture capital and
investments, rising labour costs are leading The overall aim of the programme is to private equity funding is already available in
more and more firms to proclaim that it is develop 30 innovative drugs for major the China life sciences field, according to
rather the availability and quality of expertise diseases, such as cancer, diabetes and Dr Marietta Wu, general manager for greater
90
www.scripnews.com/supplements Scrip 100
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128