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COMPANY NEWS » Independent reports back to previous page show list
»08/05/2008 [Independent reports]
China's preclinical services scene evolving outwards

China's preclinical services providers are beginning to carve a nicehe for themselves on the global stage, buoyed by the growth of the domestic market. China's pharmaceutical industry, which holds vast potential but remains largely untapped, is finally waking up, growing 30 per cent a year between 2000 and 2005 to reach $3bn, compared with a 19 per cent annual growth rate for the pharmaceutical industry as a whole. According to a recent article in Nature Biotechnology, titled: "Chinese health biotech and the billion-patient market", as the domestic market continues to evolve, several Chinese companies that were founded with a pure research and development (R&D) business plan have recognised that to stay afloat they needed to adopt a new plan, one that would offset risks and costs and increase in-house capabilities. Hence the country's preclinical outsourcing industry was born. Many of these companies are now relying on contract services to generate revenues and remain competitive. The services they now offer range from early-stage research and preclinical development, to the clinical services and manufacturing aspect of the business also. WuXi PharmaTech, ShangPharma, Shenzhen Chipscreen Biosciences, HD Biosciences, CapitalBio, Fudan-Yueda Bio-Tech and SinoGenoMax are among the dominant contract research organisations (CROs) that have sprung up over the years. As firms such as these have gained experience they are now drawing interest form international firms who are eyeing China's cost-efficiency of developing drugs compared with the west, resulting from the low-cost scientific talent, clinical trials and raw materials available in the country (with a lowest estimate of 10 per cent of the cost of similar expertise in the US). Now these Chinese services firms are beginning to take their businesses a step further - having gained the world's attention, they are recognising that their experiences with domestic regulatory agencies and markets are valuable to international clients, and they are using this knowledge in their business plans, according to the Nature article. Assistance in drug registration with Chinese regulatory agencies, such as those offered by Shanghai Genomics; and market consultation and clinical evaluations according to Chinese State Food and Drug Administration (SFDA) requirements as offered by Beijing Wantai are examples of expanding realms of service. China's largest preclinical services provider, WuXi PharmaTech, is at the forefront of this movement, being one of the first Chinese companies to market itself internationally as a pure service company. With over 1,000 employees, it is one of the country's largest biotech firms and provides services to support new drug discovery and the chemical development of new drug candidates. The company is in the midst of expanding its capabilities into preclinical toxicity, animal studies, bioassays and plant formulations, with the aim of becoming a fully integrated services company. According to the Nature article, WuXi PharmaTech's chairman and CEO, Ge Li, credits the company's success to an innovative approach both to operations and project management and to diligent protection of its clients' intellectual property (IP). Ensuring protection of clients' IP "is the lifeblood for a company like ours", he said. Meanwhile, international partnerships for innovation are also on the rise in China, with foreign biotechs increasingly forging new alliances with Chinese services firms. In January this year, US-based MPI Research and China's Shanghai Medicilon formed a preclinical services joint venture in China and in February, Europe's Novasecta formed an alliance with Chinese CROs Sundia Meditech and HD BioSciences to provide their R&D services to European mid-sized biopharma firms. Alongside this, the Chinese government is strongly encouraging foreign companies to develop their products in the country. In addition, investment in Chinese CROs by foreign firms is also on the rise, as witnessed by an increasing incidence of such deals over the past couple of years. For example, in January, China's NovaMed Pharmaceuticals secured $13.8m in Series B Funding from international investment firms Fidelity Asia Ventures and Fidelity Biosciences, and in in November 2007, China's second largest CRO ShangPharma attracted $30m from US private investment firm TPG.

 

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