The high level of biotech innovation being produced by Chinese companies today was amply demonstrated at the recent ChinaBio Partnering Forum in Shanghai.
The event attracts the country’s most innovative life sciences businesses, and I was delighted to join some of them when I moderated a panel on China Innovation. The discussion ranged from cell and gene therapy to immuno-oncology and the future of medical innovation in the country.
Panellists Wei (William) Cao from Gracell Biotechnologies Group, Ming Wang of Phanes Therapeutics, Zheng Wei from Connect Biopharma and Dajun Yang of Ascentage Pharma shared their expert views on the drivers for innovative therapeutics development in China.
Rapid changes, huge advances
The first thing we discussed was the nature of innovation itself. The type of innovation you see in China is markedly different from that seen a decade ago, when the focus was firmly on low risk generics, biosimilars or me-too/better versions of existing drugs. Affordability was the key objective of most development programmes, and with good reason – western medicines, including the novel biologics for oncology indications, were simply too expensive for most of the population.
While state insurance coverage has now increased in terms of the percentage of the population covered, the amount of coverage per person is limited for many. This means there are still opportunities for companies operating in the ‘me-too’ or ‘me-slightly-better’ space. However, several of the first-generation China biotechs – such as Innovent, founded in 2011 – have diversified and initiated more differentiating programmes. Such innovation is strongly encouraged by the government, whose ‘4+7’ rule on centralised drug procurement made it harder for companies to compete merely on profit from high-priced generics. The value of innovation is also noted by investors. Innovent made its IPO on the Hong Kong stock exchange in 2018 and currently has a market cap in excess of $4 billion.
Consequently, a wave of new companies are developing new technologies and/or pursuing more high-risk and difficult to tackle targets, including those targeted by either no or relatively few other companies. One of the firms on the ChinaBio panel, Ascentage, fits this profile. CEO Dajun Yang flagged that the willingness to assume more risk is particularly important. This can be a challenge in a culture where losing face is less acceptable than in some western cultures. Another example of an innovative company is the AstraZeneca-SDIC joint venture in China, Dizal Pharmaceutical. Every compound in Dizal Pharmaceutical’s pipeline aims to be best-in-class or first-in-class.
Driving this is unmet medical need. Just as in the western world, the hunt is on for new medicines that provide real value, which includes addressing resistance mechanisms to current drugs and targeting specific niche populations.
As one of the panellists pointed out, the era of Chinese companies just focusing on China is over. Today, Chinese biotech companies are working to serve un-met patient need globally, regardless of current geo-political challenges.
China innovation – the future
China is a really exciting space for AstraZeneca to be present. To mention a few examples where we engaged in innovation in China, it is again worth flagging our joint venture Dizal Pharmaceutical and their work on innovative, new medicines. Then there is our iDREAM initiative, whose integrated science ecosystem model will be coming to the Wuxi High-tech District in the form of an international Life Science Innovation Park. Finally, we tap into local innovation through our many partnerships, such as Hutchison China MediTech (Chi-Med), with whom we are developing a novel oncology drug currently in late stage clinical trials.
The mutual exchange of ideas in our work and across the sector is encouraging. The technology transfer system is moving towards the level of sophistication seen in the western world, and as that continues, it will clearly facilitate a new generation of companies based on academic ideas.
Having been in China for the past three months, I’ve experienced an energy level, a drive and a way of getting things done here which is very impressive. These qualities, and the innovative technologies they produce, should be a source of inspiration to us in the west.
My thanks to Wei (William) Cao, Ming Wang, Zheng Wei and Dajun Yang for taking part in the China Innovation panel at ChinaBio Partnering Forum and to Xiaogang Pan from the AstraZeneca team for his many insights.
In my next blog I will look at some of the structural changes, such as access to capital and approaches to intellectual property, that are driving China’s current wave of biotech innovation.