6 foreign-invested biotech companies enter cell and gene therapy sector in Shanghai

In a significant move towards the liberalization of the healthcare sector, Shanghai's Pudong New Area witnessed the first batch of six foreign-invested biotechnology companies, including Merck Testing and Frontera Therapeutics, completing changes in their business scope to include cell and gene therapy on Nov 14.

This development signified a milestone in the pilot project that allowed foreign-invested enterprises to engage in the development and application of human stem cells, gene diagnostics, and therapeutic technologies in Pudong. The move aligned with a notice jointly issued in September by the Ministry of Commerce, the National Health Commission and the National Medical Products Administration, permitting foreign-invested companies to participate in such technologies in eight cities, including Beijing, Shanghai and Hainan province for product registration and production. Approved products can be used nationwide.

The initiative showcased not only China's proactive approach towards expanding its openness but also its commitment to offering new opportunities for global enterprises. Multinational companies said such policy relaxation enables them to bring their advanced technologies and expertise to China, and foster collaborations with local research institutions and businesses to jointly develop new technologies and products.

Cell and gene therapy represents the latest generation of precision medical treatments following small molecule and large molecule targeted therapies, offering innovative approaches to treating tumors, rare diseases, chronic illnesses and other challenging conditions.

The current negative list restricts foreign investment in the development and application of human stem cells and gene diagnostics within the cell and gene therapy (CGT) sector, in which China is one of the leading countries in the world.

"The revised business scope allows for a more conducive environment for companies like us to introduce significant foreign investment, talent and technology resources. This change not only benefits individual companies but also accelerates the progress of the domestic CGT industry," said Chen Li, executive assistant to president of Neukio Biotherapeutics, one of six enterprises dedicated to developing next-generation immune cell products.

Germany-headquartered Merck Testing said the updated scope allows the company to localize advanced technologies in Shanghai's Free Trade Zone, engage in cutting-edge biotechnology innovation and to better cater to China's biomedical development needs. The company plans to introduce stem cell and gene therapy-related testing technologies from its parent company overseas within the next six months.

According to the Pudong District Commission of Science and Technology and Economy, Pudong has emerged as a core hub for the cell and gene industry with a robust industrial foundation and strong development momentum. The district has already seen three CAR-T products approved for the market, and is actively exploring various immunocellular therapies, stem cell therapies and gene therapies, particularly targeting solid tumors, metabolic diseases and other major illnesses, with rapid progress in pipeline development.

At this year's International Biopharma Industry Week Shanghai that began on Saturday, Chen Jining, Party secretary of Shanghai, emphasized the municipality's commitment to strengthening open, international cooperation.

"Shanghai will focus on the frontier of life sciences and innovation-driven projects, and cultivate and accumulate its competitiveness in new fields, making every effort to build a world-class biomedical industry cluster," he said.

Shanghai has been actively promoting the cell and gene industry in recent years. In last September, several departments, including the Shanghai Science and Technology Commission, jointly issued an action plan, aiming to enhance the city's technological innovation capacity in gene therapy by 2025.

According to the plan, Shanghai is constructing internationally competitive gene industry landmarks, such as the Zhangjiang Cell and Gene Industry Park, which aims to become a hub for gene therapy technological innovation and industrial development. At the meantime, leveraging areas like the Pujiang Gene Future Valley in Minhang district, the city aims to establish demonstration zones for the entire industrial chain regarding gene therapy, involving research and development, testing, and manufacturing.