Wednesday, 16 January 2013

China's Innovative Pharma Landscape: Companies Currently Conducting R&D in China


Several pharmaceutical companies are actively growing pipelines of their own in China, although at present the cumulative R&D expenditure of all Chinese pharma businesses amount to less than the spent of a single multinational corporation (MNC) in the West. Almost all the businesses to date started off as generics producers who used existing cash flows and pharma positioning to move into the local innovative sector. Furthermore, whilst previously 90% of all pharma were state-owned, today roughly 6 out of 10 are already private.

A downside to local Rx businesses most often quoted by VCs and investors is the inexperienced approach to R&D and clinical trials: many companies have burned cash with little consideration or understanding of regulatory approval prognosis. In addition, the frame of mind of Chinese businesses still suffers from relative short-sightedness when it comes to achieving success: many investors and executives do not yet appreciate the difficult-to-fathom time span of drug development. Unlike in the US VC arena, where early-stage deals are widespread, in China the lack of confidence and immaturity of the industry push investor confidence towards later-stage and established players, particularly ones which have previously received product approval.  

Some of the current drug developers in China are presented in the table below It is noteworthy that, to date, only one Chinese product has gained FDA approval—Levonest, a non-patented compound marketed by Novast Pharmaceuticals. Despite several Chinese INDs currently undergoing clinical trials in the US, all other products mentioned below have only thus far been approved by the SFDA.

Company Name
Est.

Location

Public/Private
Main products/leads
MNC partners
Novast Pharmaceuticals Ltd
2005
Nantong, Jiangsu &
Sterling, VA, USA
Private; Venture-backed: Bioveda China Fund, Lilly Asian Ventures, New Enterprise Associates, SAIF partners, Sequoia Capital
Generics; First and only FDA-approved Chinese ANDA available in USA:  Levonest (levonorgestrel and ethinyl estradiol); pipeline under construction.
Eli Lilly
C & O Pharmaceutical Technology Holdings
1981
Hong Kong; Wide distribution across China
Public (SIN:COPT)—current subsidiary of Shionogi & Co (Japan) and associate company of Sumimoto Corp (Japan)
Generics; Three potential Category 1* leads: anti-Hepatitis B, an immuno-enhancer, and antibiotic targeting resistant bacterial pathogens.
Optimer Pharma
Harbin Pharmaceutical Group
1986
Harbin; Wide distribution across China
State-owned;
US$ 250 million invested by Warburg Pincus (NY) and Citic Capital (HK)
One of three largest pharma companies in China.
Generics; Aim to spend 5% on R&D annually in the near future.
None
1997
Shijiazhuang Hebei;  Wide distribution across China
Private
Butylphthalide (NBP)—a compound derived from celery seeds, acquired from Chinese Academy of Medical Sciences and indicated for the treatment of mild and moderate acute ischemic stroke; approved by the SFDA in 2002.
None
2001
Beijing
Public (AMEX:SVA)
Most established vaccine producer in China. Major products, vaccines against: Hepatitis A&B, SARS, Mumps, Rubella, Rabies, H5N1 & H1N1 influenza, all approved by SFDA for marketing in China. Pipeline consists of: Hand, foot & mouth disease vaccine, Pneumococcal conjugate vaccine, Rotavirus, Chickenpox, Viral Meningitis vaccines.
Being largest vaccine maker in China, Sinovac highly likely to benefit from new US$ 125 billion healthcare budget & become standard provider in new hospitals being built.
None
2000
Shanghai;
San Diego, CA, USA
Private;
State-backed; Anticipating NASDAQ/London IPO within 2 years
Marketed and SFDA-approved products: Recombinant Human Neureglin-1 for the treatment of heart failure; Recombinant Human ErbB3 vaccine against tumors—both anticipating FDA approval & currently in USA clinical trials. Pipeline includes vaccines to overcome immunosuppression and small cell lung cancer antibodies
None
Sihuan Pharmaceutical Holdings Group Ltd
2001
Tongzhou, wide distribution across China
Public; Multiple stock exchanges: (HKSE:0460), (Berlin:TEL1)
Generics: largest cardio-cerebral vascular drug franchise; IND in development: Tylerdipine Hydrochloride—calcium channel blocker for hypertension, accepted for clinical trials by SFDA, FDA IND application pending.
None
Simcere Pharmaceutical Group (also trademarked as Zailin, Yingtaiqing and Bicun)
1995
Nanjing; wide distribution across China
Public (NYSE:SCR)
45 Generic products; 6% of total annual revenue dedicated to R&D; 5 IND applications filed to the SFDA since 2010 in oncology, cerebrovascular and cardiovascular areas.
Merck (joint venture);
Bristol-Myers Squibb (partnership in oncology)
SinoPharm: China National Pharmaceutical Group Corporation
1998
Shanghai; wide distribution across China
State-owned; Major public subsidiaries:
Sinopharm Group (HKSE:1099); China National Medicines (SHA:600511); Beijing Biological (SHA: 600161)
Largest pharma group in China (distribution, logistics, retail, R&D); specializing in generics and traditional medicines; intent on becoming innovative through acquisitions, MNC partnerships & franchising
Merck partnership in vaccine development; Rare disease research partnership with Sanofi
VenturePharm Laboratories Ltd
1998
Beijing
Public (HKSE:8225)
Services provider & Products; Main business centered around CSO/CRO/CMO services, but growing own pipeline
None
Shaanxi Bicon Pharmaceutical
1997
Shaanxi; Wide distribution across China
Private;
Venture-backed
Generics and Traditional Medicines; Recent PAG-Asia US$ 250 Million investment due to be directed towards R&D centre construction
None
3SBio: Shenyang Sunshine Pharmaceutical
1993
Shenyang
Public (NASDAQ:SSRX)
(Prospects of going private in near future)
Substantial number of protein-based products and leads obtained through in-licensing and in-house R&D: 4 genetically-engineered protein-based products, 8 other protein-based products are in clinical trials or undergoing SFDA registration process
DaVita, AMAG Pharma & others
Yangtze Pharmaceutical Group
1971
Taizhou;
San Francisco, CA
State-owned
Generics; US$ 500 million invested in R&D; US$ 30 million invested in an innovative research centre in Taizhou; ten products in the pipeline for neurological disorders
Leiden Bio Science Park, Netherlands
MicuRx Pharmaceutical
2007
Shanghai;
Hayward, CA
Private;
venture-backed by Morningside, HK
Drug discovery of antibiotics targeting antibiotic-resistant organisms
Pfizer
Cumencor Pharmaceutical
2009
Zheingjiang Hi-Tech Park
Private
Drug discovery of multiple resistant tuberculosis and other organisms
Pfizer
Chipscreen Bioscience
2001
Shenzhen Hi-Tech Industrial Park
Private; Venture-backed
7 leads in the pipeline targeting the areas of oncology, autoimmune disorders, diabetes
HUYA Bioscience, Quintiles
Hutchison China MediTech
(Chi-Med)
2002
Shanghai
Public (LON:HCM);
Venture-backed
Pipeline of 8 products based on traditional Chinese medicine, in the areas of oncology and inflammatory disease
J&J, Eli Lilly, Merck, Procter & Gamble