Biotech Companies in China

The biotech sector in China is increasingly focused on global blockbusters and innovative drug development. The government has invested significantly in the R&D sector, and has created incentives such as designated biotech zones and preferential regulations for locally developed drugs. This has led to an increase in the number of Chinese startups. But this growth is not without its challenges.

Less than 5% of sales revenue is spent on R&D

According to a Chinese government survey, less than 5% of biotech companies’ sales revenue is allocated to R&D. While this number may seem low, it reflects an increasing emphasis on innovation and research. In China, the government has encouraged the development of new technologies and pushed companies to invest more in R&D. In fact, nearly half of the top 100 high-tech enterprises spend more than 5% of their annual sales on research and development.

In China, the government supports pharmaceutical R&D through the Key Drug Innovation Program. This program receives 10,000 million Chinese Yuan from the central government, or about 1,653 million USD at the current exchange rate. The government also encourages private investors to invest huge sums in pharmaceutical R&D. This has led to a sharp increase in R&D investments in the pharmaceutical industry.

Dependence on governmental funding

The biotech industry in China is a growing industry, spurred by scientific discoveries, advances in technology, and increased government support for biotechnology. The sector has attracted substantial investment from both domestic and foreign sources. Investment in biotech in China has grown by about 22% since 2005, with seventy percent of this coming from foreign companies. China’s cabinet, or State Council, has announced several measures to boost the industry, including policies in key fields and preferential tax incentives, including a 50 percent tax deduction.

The biotech sector in China has seen a dramatic growth over the past decade, from being the least developed country to the most advanced nation in biotechnology adoption. China considers its biotech sector to be a key area for national development, with the potential to help ease the country’s food shortage, combat disease, and solve hereditary problems. As of 2005, China’s biotech industry was worth US$3.3 billion. By 2010, that figure is expected to rise to US$9 billion.

Investment in R&D

Investment in R&D by Biotech companies chinahas increased in China in recent years. The biopharmaceutical industry in China has three key concentrations of R&D activities: the Pearl River Delta, Bohai Rim, and the Yangtze River Delta. The concentration of biopharmaceutical companies in these three regions is indicative of a general spatial pattern for the industry. Furthermore, the pattern of biopharmaceutical companies’ R&D investments is reflected in a spatial gravity center, which has been shifting from the west to the east.

One such example of biotech companies increasing their R&D activities in China is Novartis, which recently announced a USD 1 billion investment in the country over the next five years. This investment will help Novartis expand its R&D activities in China and signal the firm’s long-term commitment to the region. The investment will include a substantial expansion of the Novartis Institute of BioMedical Research in Shanghai.

Competition from foreign biotechs

China’s foray into biotech companies is relatively new compared to other nations, but it is gaining steam as other nations deal with economic downturns. Since 2010, China has made a major push to create and develop biotech companies. It has also launched the Made in China 2025 initiative, which aims to build key industries in order to reduce reliance on imported products and to boost domestic production.

In addition to its growing biotech sector, China is booming, with four homegrown meds and eight PD-1/L1 agents already on the market. One of these companies, BeiGene, has grown to almost three thousand employees across 17 locations in China and offices in the U.S. and Europe. The firm has been attracting top talent, and it has already doubled its staff.

Innovations in gene therapy

Biotech companies in China continue to source innovation from the global market. By 2020, they plan to sign more than 60 in-licensing agreements. Biopharmaceutical companies in China are pursuing innovative deal structures such as strategic partnerships with equity investment, licensing, and tie-ups with Chinese venture capital funds.

The non-State-owned biotech companies in China have experienced rapid growth in the past decade. They have significantly increased their capabilities in drug discovery and development, largely due to favorable policy conditions and a conducive funding environment. Edi-Gene’s Wei Dong is an example of a biotech company in China that has made significant progress in developing genome editing technologies.

Immunotech, a leading domestic company in cell & gene therapy, has embraced digitization and intelligent manufacturing as core strategies. It is implementing the Korber Manufacturing Execution System (MES), which will enable interconnection and data transfer throughout the manufacturing process. This system will support the company’s strategy of digitization while ensuring high-quality products.