Worldwide, big pharma may be retrenching, but it continues to invest in China. Because China’s drug market is young and growing, the country represents opportunity for these industry veterans, an opportunity that is made more attractive by their difficulties elsewhere. It’s not surprising, therefore, that several big pharmas have expressed their intention to enlarge their presence in China. Novartis (NVS), Novo Nordisk (NVO), GlaxoSmithKline (GSK), Bayer Schering and Bristol-Myers Squibb (BMY) have each been in China biopharma news in recent days.
Novartis, for example, announced it will make additional investments in its Shanghai R&D center and increase the employee count in its China marketing team by 20%. The goal is a 30-40% annual increase in its China business for the next five to ten years, according to Jeffrey Li, Novartis China President.
When Novartis established its Shanghai R&D center, the focus was on infectious disease, such as hepatitis B and the infectious cause of cancer. The $100 million facility planned to combine the best of Western medicine with the insights of traditional Chinese medicine.
But Novartis is also interested in the OTC business, a sector that may provide a more immediate boost to China revenues. Novartis said that it is seeking to acquire OTC drug firms in China. Rather than forming partnerships with existing firms, Novartis wants to purchase companies as a means to expand its presence in the Middle Kingdom.
In terms of sheer dollar size, no other big pharma announcement can compete with Novo Nordisk’s recent ground breaking of a $400 million insulin manufacturing facility in Tianjin, which we reported on separately (see article). The new facility, which is being constructed adjacent to an existing Novo Nordisk plant, will be the company’s primary production site in China, while also serving the entire Asia Pacific region. The new 22,500 sq. meter facility, which will employ almost 500 people, is expected to become operational in 2012.
GlaxoSmithKline has made plans to double the number of researchers it has on staff in China, according to Carol Zhu, who runs GSK’s China research arm. The Shanghai-based R&D operation will grow from a staff of 170 today to 200 by year's end and 350 next year, if all goes as planned.
The company’s R&D goal is to create a “beginning to end” drug research operation in China, according to Perry Nisen, MD, PhD, senior vice president, Cancer Research at GlaxoSmithKline. Nisen cited the “magnitude of the slope of change” evident in China’s biopharma research. Especially important to GSK is the large number of PhDs coming out of China universities. Nisen’s remarks were contained in a keynote address at the China Trials 2008 Global Clinical Development Summit recently held in Shanghai. The title of his address was “From ‘Made in China’ to ‘Discovered in China.’”
“There is every aspect of R&D in China,” Nisen said. “Some elements are reasonably mature and others are sophisticated at a global level.” If some part of the China R&D world is not already at world class levels, Nisen expects it to attain those levels in the near future.
Bayer Schering Pharmaceuticals, another multinational company with deep roots in China, has pledged $1.9 million over five years to build 40 Hemophilia Treatment Centers in China. The project is a partnership between Bayer Schering and the Chinese Society of Hematology. It seeks to improve hemophilia care throughout the country.
Bayer pointed out that China’s 70,000 to 100,000 hemophilia sufferers constitute about one-fourth of the world’s total hemophilia population. Currently, China has just six Hemophilia Treatment Centers to serve its vast population.
Since 2000, Bayer has been selling Kogenate, the only recombinant factor VIII therapy available in China. The company donated product last year when plasma-based therapies were in short supply.
Bristol-Myers Squibb (BMY) and the Bristol-Myers Squibb Foundation have committed to bestowing $1.4 million of grants to aid hepatitis C prevention and education. The grants will be spread over four countries in Asia, including four individual country grants of $250,000 to support two-year projects in China, India, Taiwan and Thailand. A fifth multi-country grant of $400,000 will support a collaborative two-year project involving two or more of these countries.
With this kind of investment, multinational big pharma remains highly committed to building their respective companies’ presence in China.
Disclosure: none.
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Nov 20 02:18 PMRoche the Swiss Pharmaceutical giant which also owns a controling share of Genentech is expanding its research and manufacturing facilities in China
Roche has had a presense in China since the 1920's