Biotechnology, in the simplest explanation, is technology based on biology. It harnesses cellular and biomolecular processes to aid in developing products and technologies that help improve the health of our planet and the people that call it home. But when it comes to Biotech, why should we look to China?
Thanks to China’s economic reform and free-marketing principles, business is expanding. Industries are observing unprecedented growth, firmly establishing China as the world’s second-largest economy, with $137 billion in sales in 2018. In light of the rise of this economy, more and more global companies are working on improving their presence in the Chinese market.
What Sparked the Boom in China’s Biotech Industry?
Over the past few years, the amount of capital funding into biotech investments in China has increased dramatically. GlobalData predicts that China’s biotechnology market could reach profits of up to $209 billion by 2022.
Amgen (AMGN), AstraZeneca (AZN), Pfizer, Merck, and Novartis are just a handful of big-time biotech companies that are looking to China for innovation and investment opportunities.
Even though investment into most of China’s business sectors generally plunged throughout the Coronavirus crisis that broke out in 2020, biotech has been a noticeable exception. This was one of the only industries that continued to attract investments, partly due to its importance of managing the pandemic and also as a result of government incentives.
Why Should Global Market Biotech Companies Consider Chinese Venture Capital?
China’s economic growth, higher average salaries, and increased awareness of the importance of biopharmaceuticals have seen the biotech industry playing an ever-increasing important role in China’s national economy, which draws in even more private and public investors.
Partnering with Chinese companies and biotechs can help global brands monetize their pipeline in a non-dilutive way. With China being the second-largest healthcare market in the world, tapping into this market won’t only be lucrative for clinical trials. It’ll also offer much-needed help for thousands of Chinese patients.
New regulatory requirements have made it quicker and easier for Chinese scientists to get through the clinical trials development stage of new pharmaceuticals. With so many patients that need help, the patient recruitment process in China is much speedier than it is elsewhere in the world.
One also has to consider the commercial opportunity at hand. Reaching a Chinese audience can be a very lucrative endeavor. But to succeed, you absolutely have to translate and localize all your content in order to bridge the language barriers and cultural differences.
Innovative Pipelines from Chinese Companies
Chinese companies and biotech firms are starting to build their own innovative pipelines. Many of them plan to out-license their products for ex-China rights to U.S. and European partners.
The Chinese scientists are driven to become leaders in the global biopharma ecosystem. Almost every biotech leader looks to build globally competitive companies that can fill the shoes of brands such as Amgen and Genentech.
According to the United Nations, China also has a rapidly aging population compared to other global destinations. This fact directly impacts rates of critical and chronic illness among China’s population.
This unique market landscape creates an increase in demand for groundbreaking medical treatments. Western biotech companies are turning to Chinese biotech firms. They are investing in the development of innovative drugs that’ll treat not only the Chinese population but enhance treatments worldwide.
The West’s major pharmaceutical companies are taking note of these developments in the biotechnology sector and considering bolstering their presence in China. Many European companies are funding Chinese research centers, while others foreign companies coordinate research cooperation initiatives with Chinese firms.
The Importance of the Made in China 2025 Strategy
Made in China 2025 is China’s investment plan to become a high-tech and high-value powerhouse for industries. These industries where biotechnology innovation will be used include robotics, aviation, medical technologies, and biopharmaceuticals.
The biotech plan, more specifically, includes the commercialization of 30-35 innovative drugs. There is also a goal to achieve innovation capacity, international competitiveness, and production volume in pharmaceuticals by 2025.
The building of biotechnology parks is a critical element in advancing China’s biotech industry. These campuses are designed to house high-tech companies working on a common theme, such as nanotech or biopharmaceuticals. So far, China is home to over 100 national-level biotech parks and more than 400 provincial-level parks. These parks offer talent pools, infrastructure, and business support for collocated companies. Plus they also provide support with regulatory processes and financing.
Global leaders understand that their strategies’ effectiveness is always related to their insights and understanding of emerging markets. When it comes to the Chinese biotech landscape, it is a growth market that cannot be overlooked. Multinational pharmaceutical companies are investing more in the life sciences sector than ever before!
Indeed, innovative biological drugs might be out of reach for Chinese biotech companies at the moment. This is because the industry lags when compared to the U.S. and European biotech firms. But international collaboration is on the rise.
Out-license deals can help Chinese biotech firms commercialize their discoveries globally. And domestic Chinese biotech players can use in-licensing to boost their mainstream market exports. It’ll be investors with in-depth knowledge of China’s biotech industry that leverage the winds of change that bring about plenty of new business opportunities, both in the Chinese biotech landscape and that of its Western counterparts.