Investing in China’s Biotech Industry

Image result for biotechnology industry news

Biotech investment is driving not only services outsourcing (vs. manufacturing) to China, but also accelerating China’s growing leadership in innovation – central to the country’s 13th Five Year Plan 2016-2020.  In the previous Five Year Plan, the central government injected US$2 billion in subsidies to spur biotech innovation, creating expectation for electron microscopes and spectrometers directed toward discovering therapies.

China’s pharmaceutical market is approaching US$150 billion with roughly a third, or US$50 billion, in biotech drug discovery. This compares to America and Europe’s regional pharmaceutical markets of about US$350 billion each, with approximately half devoted to biotech and drug discovery.  China is currently demonstrating an impressive inflection point or shift away from low risk contract work in sales and generics (“biosimilars”) development – to novel therapy research.

China has in recent decades served mainly as a contract researcher (CRO) for chemistry, as opposed to biology and health therapies.  Given the US$1 billion cost in developing new bio-therapies in the U.S. and Europe, big pharmaceuticals have been eager to reduce costs and therefore outsourced to China.  China’s big three CROs benefited, including WuXi AppTec (formerly Wuxi PharmaTech – based in Shanghai), ChemExplorer (Shanghai) and Pharmaron (Beijing).  In addition to most leading global pharmaceuticals with offices in China, foreign CROs in China include Brunswick, Viva and Xenobiotic Labs.  The problem for China is that foreign brands dominate the high end market

Leave a Reply

Your email address will not be published. Required fields are marked *