(Yicai) Nov. 15 -- The Germany’ Merck and five other overseas pharmaceutical companies have been given the green light to offer human stem cell and gene diagnostic and therapy services in Shanghai’s Free Trade Zone, two months after China opened up its major free trade zones to foreign investment in these sectors.

Merck’s Shanghai unit, Merck Testing (Shanghai), has updated its business license to include "human stem cell technology development and application; genetic diagnosis and treatment technology development," according to company officials who took part in the process, These activities were previously explicitly excluded from the business license.

In all, six foreign-funded companies, including Merck Testing, received their updated business licenses yesterday, paving the way for their entry into these cutting-edge fields. Merck Testing is the only one among the six that is a unit of a global top 30 pharmaceutical company. Another two international firms have also said they plan to set up subsidiaries in the FTZ to carry out these businesses.

"We've already received numerous inquiries about our upcoming expanded services," Tao Juhong, Asia-Pacific head of biopharma operations at Merck Life Science Biomedical Testing Services, told Yicai. The new permit will significantly boost Merck's business scope, enabling it to participate in frontier biotechnology innovation and provide testing services for Chinese biopharmaceutical companies in advanced medical care and biological drug development.

"With the broadening of our business scope, Celligeon (Shanghai) Biotechnology will pump substantial foreign capital, talent, and technical resources into the sector to accelerate industry development," said Chen Li, executive assistant to the company president .

Foreign-invested businesses will be allowed to engage in human stem cell and genetic diagnosis and treatments as part of a pilot program in the free trade zones of Beijing, Shanghai, Guangdong and Hainan, the Ministry of Commerce, the National Health Commission, and the National Medical Products Administration said in September. Their approved products will be available for use nationwide.

Shanghai's Pudong New Area, an early mover in China's stem cell and gene industry, is home to over 120 companies along the supply chain, including more than 80 product development firms, plus dozen of service providers that offer testing, pilot production, contract manufacturing, materials and clinical trial services.

Pudong New Area has already seen three CAR-T cell therapies, which use T cells engineered with CARs to treat cancer, go to market. Its clinical development pipeline accounts for nearly one-third of the national total, encompassing various immunocell therapies, stem cell treatments, and gene therapies targeting solid tumors, metabolic diseases, and other conditions.

Editors: Tang Shihua, Kim Taylor