Chinese firms see strong start in R&D

Promising industry

In the international pharmaceutical market, a shift has been observed from the development of small-molecule medical medicine to that of large-molecule therapeutic biologics, marked by an increase of the biological market share from 13 percent in 2006 to 17 percent in 2010, according to a report from the international consultancy firm Boston Consulting Group.

Global sales of therapeutic biological products reached $180 billion in 2012, a year-on-year increase of 14 percent, which is expected to remain at 15 to 18 percent over the next five years.

Therapeutic biological drugs are more complicated than medical ones in terms of molecular structure and manufacturing requirements. Meanwhile, biotherapies are said to be safer, more efficient and more directly target debilitating diseases such as cancer and diabetes.

China has designated the biological industry as one of the seven strategic emerging industries in its 12th Five-Year Plan (2011-15), while the therapeutic biologics sector is the priority in the biological industry. Billions of yuan in R&D funds and preferential tax and administrative policies will be offered to Chinese self-development projects.

Last year, 3 billion yuan ($490 million) had been put into related projects. Wang Jingyuan, an official of the China Chamber of Commerce for Import & Export of Medicines & Health Products, said that more subsidies will be offered this year.

Over the past five years, the annual growth of China's therapeutic biologics sector has been 15 to 18 percent, which is expected to continue. Meanwhile, the share of the sector in China's pharmaceutical industry as a whole has remained at 5 percent.

So far, China accounts for 7 percent of the global pharmaceutical market, while the figure in the therapeutic biologics sector is only 2 percent. "We need to accelerate development of this promising sector," Wang said.

She pointed out that although Chinese drugmakers lag behind multinational companies, which started in the industry more than a decade ago, the Chinese companies have an advantage. "We get a chance to see technologies emerging quickly and then can innovate from there," she said.

A group of Chinese enterprises, including Simcere Pharmaceutical Group, are using this advantage to conduct further development via cooperation with mature international biopharmaceutical giants. A typical case is Simcere's partnership with Bristol-Myers Squibb Co on discoveries and commercialization of cancer therapy and cardiovascular diseases.

Another case is Zhejiang Beta Pharma Co Ltd's announcement in mid-May that it will form a joint venture with US-based therapeutic biologics company Amgen Inc to commercialize Amgen's colon-cancer drug Vectibix in the Chinese market.

Ownership of the new venture, to be named Amgen-Beta Pharmaceuticals Co Ltd, will be split 51-49 in favor of Zhejiang Beta, pending approval by the Chinese government.

The planned joint venture will also include research in China, according to Amgen."Amgen's 30-year track record of developing innovative medicines means we are well positioned to support the development of an 'ecosystem of innovation' in China's biotech industry," said Mary Klem, an Amgen spokeswoman.

Zhejiang Beta is one of China's top 10 biopharmaceutical companies by sales. Ding Lieming, founder and chairman of the company, said: "We share Amgen's passion for developing molecularly targeted therapies for unmet medical needs."