Small Firms to Be Mainstay of New Era in Biomedical R&D
Yicai Global
/SOURCE : Yicai
Small Firms to Be Mainstay of New Era in Biomedical R&D

(Yicai Global) Sept. 28 -- The biomedical field has some small firms with strong research and development ability and star products that are very likely to be snapped up by large drugmakers at high prices.

In the past, such outstanding companies often flocked to the San Francisco Bay Area. The wind is now blowing in China's direction, with companies landing in Shanghai's Zhangjiang Hi-Tech Park and Wuhan's Optics Valley.

Companies such as BeiGene Ltd. [NASDAQ:BGNE], Innovent Biologics Inc., Shenzhen Chipscreen Biosciences Ltd. and Suzhou Jishi have emerged in recent years. BeiGene focuses on new cancer drugs. As yet it has not released a single product and is still in its investment phase, but the Nasdaq-listed company is valued at USD1 billion.

"New types of biopharmaceutical R&D companies are growing in number," Mr. Li Qing, general manager at GE Healthcare Life Science, told Yicai Global. "You can see small companies with just 40 to 50 employees constantly emerging. They specialize in R&D of new biological drugs and biological drug analogues before being acquired by large pharmaceutical companies at a certain point."

In Mr. Li's view, it is these small but exceptional companies that give China's biopharmaceutical industry its vitality.

"Many of these companies' developers have studied or lived abroad," he said. "They have been exposed to international products, and so they have greater strength."

"The gap between domestic and overseas R&D of new biological drugs is only two to three years at present, the narrowest in the history with the US," said Wuxi Biologics Co. CEO Chen Zhisheng. "For example, when the phase one clinical studies of some new targets are performed in the US, many Chinese companies are also doing trials. In the next five to 10 years, bio-medicines of the best possible efficacy in the world may be created in China -- and this is the best opportunity."

"Domestic startups have the same ideas as their foreign counterparts in terms of technology and products selection," he said. "They're taking the lead in the bio-pharmaceutical field and may make some breakthroughs in China."

Nearly everyone, including Mr. Chen Zhisheng, agrees that with capital, the right policies, and talent, this is the best time for the bio-pharma industry.

"For example, take a college professor who has invented a bio-pharmaceutical drug target, but doesn't have the human or material resources to provide support for the work," he said. "In the past, he or she would not be able to continue research. But now, with a platform for new drug research and development that is compatible with those in the rest of the world, the new drug target can be tested by professional institutes in the US as well as in China, and the new drug can be developed in a more efficient way. Thus, the gap between China and foreign countries can be narrowed."

Generally, cooperation that goes from initial development to product development, from first clinical production phase to market launch can have a time span of 10 to 20 years. The platform for new drug research and development can create long-term, stable earnings through this kind of cooperation.

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