Biotech in China
A couple of weeks ago I visited Shanghai as part of a UK Trade &
Industry (UKTI) BioPharma Mission. The initiative aims to open new gateways for
UK biotechs to partner with companies based in China, understand better the
Chinese regulatory environment and introduce new sources of funding. There were
14 UK organisations participating in the mission, all of which are active in
the life sciences field.
We visited a range of public and private sector organisations in
Shanghai and the mission provided a fascinating window on life science
developments in China, the scale of which takes some digesting:· In 2009 healthcare spending was US$15B but this year it is set to reach almost US$400B. Over last 3 years the government spent US$125B to extend basic healthcare access to 95% of the country’s 1.3B people.
· The Chinese pharmaceuticals market is US$56.7B and growing at 15-20% p.a. It is now the 3rd largest market worldwide.
Traditionally the Chinese pharmaceuticals market has been dominated by
generic products and Traditional Chinese Medicine (TCM) but more innovative
approaches are rapidly coming to the fore. GSK has set up its global
neuroscience R&D centre in Shanghai with an investment of more than
US$100M, which has resulted in 6 compounds in clinical development.
Hutchison MediPharma is an indigenous company founded to exploit TCM
knowledge to find novel botanicals and NCEs. They recently licensed a novel
drug candidate to AstraZeneca, the first deal of its kind in China.The government is providing grant support to local companies to fund R&D into innovative drugs. It is also pumping US$6B into the academic sector to stimulate innovation. Last year China overtook the UK for number medical journal citations and is now ranked second worldwide after the US.
A new policy now allows academics to spin out companies and the government is providing funding for scientists returning from the US/EU (‘sea turtles’) to set up companies. Regional funding is also available for these companies to locate in high tech clusters.
Local venture capital funds have been established (e.g. Nanjing VC) and
are actively investing in medical diagnostics, TCM etc. Government funding for
local VCs is also coming on stream. International fund managers are also active
in China e.g. Sequoia Capital, which plans to invest 30% of its local funds in
healthcare. The UK VC SPARK Ventures now has an office in China and is looking
at ways in which the Chinese government could fund innovative projects
originating from UK scientists for exploitation in China.
Some UK biotechs, such as ImmunoBiology and CompanDX, have already
successfully sourced funding from China and I am sure that this is the start of
a trend given the current investment climate in Europe
There seems to be plenty of business development opportunities for UK biotech
companies in China. In a 2011 report the EU SME Centre in Beijing identified
three main areas of development opportunity: medical devices, pharmaceuticals
and healthcare services.
The UK has a strong reputation in China for its 60-year experience of
running the NHS as well as a reputation for clinical excellence and strong
private sector expertise. Synergy Health, a UK healthcare services provider,
has been running commercial operations in China for three years providing
outsourced sterile services to hospitals and clinics. This was a novel concept
for China but the NHS spearheaded this practice in 1996 as a way to improve
quality whilst driving down costs through economies of scale and public-private
partnerships. Synergy now expanding from its original site in China and is
embarking on 3 new projects in key cities including Shanghai.
UKTI is keen to stimulate inward investment by Chinese life science
companies into the UK. In this respect we were disappointed to hear one of the
local pharmaceutical companies tell us that when accessing Europe they tend to do
deals in Germany, Denmark or Sweden. Their perception is that the business
environment in the UK is constantly changing, and is not a stable environment
in which to do business.
This is a clear message to the UK government that whilst China presents
lots of business opportunities for UK companies, there is still a lot for the
government to do improve the business climate in the UK to attract significant
inward investment from China.Labels: Biotech, business development, China, investment
1 Comments:
Thanks for your great information, the contents are quiet interesting.I will be waiting for your next post.
life sciences
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