Chinese Economy Watch

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China's home-grown biotech firms unlock global potentials​

(Xinhua) 09:37, December 14, 2024

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A worker checks medicines at Shenyang Sinqi Pharmaceutical Co., Ltd. in Shenyang, northeast China's Liaoning Province, May 22, 2024. (Xinhua/Yang Qing)

SHANGHAI, Dec. 13 (Xinhua) -- Chinese biotech firms are emerging in a highly resource-intensive and time-consuming scientific innovation endeavor: drug discovery.

One of the latest examples was LaNova Medicines, a Shanghai-based biotech company, which secured a remarkable deal in November with its promising anticancer drug LM-299.

U.S. pharma giant Merck & Co., Inc., or MSD, obtained an exclusive global license to develop, manufacture and commercialize LaNova's clinical-stage novel investigational antibody, with a payment up to nearly 3.3 billion U.S. dollars.

"This agreement adds to MSD's growing oncology pipeline, and we look forward to advancing LM-299 with speed and rigor for patients in need," said Dean Y. Li, president of MSD Research Laboratories.

In the first half of 2024, China's innovative drug license-out deals reached 42 transactions, with the disclosed total transaction value increasing by 80 percent year on year.

Some companies have opted for the riskier path of going global on their own. In February 2022, Legend Biotech's Cilta-cel became the first Chinese CAR-T therapy to gain FDA approval in the United States for treating adult myeloma patients. It is priced at about 465,000 dollars per dose.

CAR-T is an immunotherapy involving the genetic engineering of a patient's T-cells to recognize and attack cancer cells.

BEST IN CLASS

The prospect of high profits draws Chinese biotech firms into the sector amid China's efforts to prioritize innovative drug discovery as a new economic engine. This year's government work report has highlighted it as an emerging industry alongside new energy vehicles, low-altitude economy, and commercial space, among others.

Competitiveness in the pharmaceutical industry hinges on securing core patents. Zanubrutinib, a cancer drug developed by Chinese biotech giant BeiGene, outperformed the U.S. blockbuster Ibrutinib in a "head-to-head" contest. Ibrutinib is the world's first BTK inhibitor, and it has been marketed and used for treating blood cancers.

The "head-to-head" clinical trial involves close combat where drug A challenges the established drug B to see which performs better. If A succeeds, it quickly rises to prominence; otherwise, it withdraws from the market.

Innovative drugs are typically classified as first-in-class, best-in-class, me-better, me-too, and me-worse. Until recently, China's pharmaceutical landscape was largely dominated by me-too and me-better drugs. Zanubrutinib is now a "best in class."

In 2023, Zanubrutinib achieved a total annual revenue of over 1 billion U.S. dollars for the first time.

UNMET DEMANDS

Chinese biotech entrepreneurs strategically focus on unmet medical needs to gain a foothold in international markets.

"Advanced colorectal cancer poses a significant medical challenge, with rising global incidence and mortality rates, and a dearth of effective new treatments," said Su Weiguo, CEO of Shanghai-based Hutchmed. "The United States has not seen a new drug approval in this field for 10 years."

In November last year, Hutchmed's fruquintinib received FDA approval for the treatment of metastatic colorectal cancer and was prescribed within 48 hours after the approval.

Junshi Biosciences, headquartered in Shanghai, made similar choices when exploring the U.S. market. "Our strategy is to prioritize the approval in the United States for nasopharyngeal carcinoma since it is a disease with unmet medical needs there," said Li Ning, CEO of Junshi Biosciences.

Overseas pharmaceutical titans are increasingly venturing into China for promising domestic biotech firms. AstraZeneca announced in February this year that it would establish its fifth global strategic center in Shanghai and support 30 Shanghai-based enterprises in their international expansion efforts.

FIRST IN CLASS

Some Chinese biotech firms are aiming high. They set their sights on groundbreaking first-in-class drugs with an ambition to lead in global innovation.

The first-in-class medication is a prototype drug that uses a "new and unique mechanism of action" to treat a particular medical condition.

So far, the number of approved China-designed first-in-class drugs has been few. Yet the landscape is on the cusp of transformation as an increasing number of home-grown players joined the game.

"China's 'low-hanging fruit' opportunities in drug discovery are dwindling, and only the more innovative first-in-class targets point to future prospects," said Chen Kan, co-founder of Qiming Venture Partners, which invests in new drug development.

Data from Pharmcube, a pharma consultancy, reveals that by August, China's new drug pipeline count stood at 5,380, representing over a third of the global total and nearly matching the United States.

Also, China ranks second globally in the number of first-in-class drug candidates poised to make debuts in the coming years.

Moreover, the rise of AI technology offers new possibilities for China's drug industry.

MindRank, a Hangzhou-based biotech firm, has harnessed AI drug discovery to develop a small molecule medication, MDR-001, targeting conditions such as obesity and type 2 diabetes.

This AI-driven approach enabled the research team to swiftly identify a preclinical candidate from nearly 100 molecules in just eight months. The drug candidate has now received clinical trial approvals in both China and the United States.

In 2023, XtalPi Inc., a Shanghai-based startup, introduced an AI-driven drug discovery solution that promises to overcome the speed limitations in chemical synthesis, enhance the success rate of drug development experiments, and reduce the development time for new drugs.

 

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New Indian program visiting China?


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China’s poorly behaved aunties are at it again. A viral video shows a group of tourists from mainland China leaving a rental house in Osaka, Japan, in a complete mess after staying there for three days. The clip, shared on X by a Japanese blogger has been viewed 3.6 million times and sparked heated discussions among both Japanese and Chinese netizens.Join this channel to get access to perks:





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[srev2004]

@E-195 keep this discussion focused on economy.

 

[E-195]

@E-195 keep this discussion focused on economy.

okay

By Kevin Yao, Joe Cash and Ethan Wang

BEIJING (Reuters) - China's industrial output growth quickened slightly in November, while retail sales disappointed, keeping alive calls for Beijing to ramp up consumer-focused stimulus as policymakers brace for more U.S. trade tariffs under a second Trump administration.

The mixed data underline how challenging it will be for China's leaders to mount a durable economic recovery heading into 2025, when trade relations with China's biggest export market could worsen while domestic consumption also stays weak.
U.S. President-elect Donald Trump's vow to impose tariffs exceeding 60% on Chinese goods could push Beijing to accelerate plans to rebalance its $19 trillion economy, analysts said. This comes after over two decades of deliberation on transitioning from the current growth model focused on fixed-asset investment and exports to a consumption-driven one.

China's industrial output in November grew 5.4% from a year earlier, faster than the 5.3% pace seen in October, data from the National Bureau of Statistics (NBS) showed on Monday, beating expectations for a 5.3% increase in a Reuters poll.

However, retail sales, a gauge of consumption, grew at its weakest pace in three months at 3.0% last month, much slower than a 4.8% rise seen in October. Analysts had predicted a 4.6% expansion.

"China's economic policies have been amazingly consistent in promoting manufacturers over consumers despite clear signs of lasting weakness," said Dan Wang, a Shanghai-based independent economist.


"So, one can expect production capacity to strengthen, potentially agitating the overcapacity issue and motivating Chinese companies to seek overseas markets."

Fixed asset investment also increased at a slower 3.3% pace in January-November from the same period a year earlier, compared with an expected 3.4% rise. It grew 3.4% in the January to October period.

"Worries about the poor retail sales may be overdone, as it results from an early start of the 'Double 11' shopping festival which frontloaded sales to October," said Xu Tianchen, senior economist at the Economist Intelligence Unit.

"If we smooth the October-November data, then growth should average around 3.9%, which is higher than the previous months," he added. "But consumer demand is not strong in itself, it is still very reliant on government subsidies, which contributed about 1.5-2 percentage points to monthly retail sales."



POLICY SUPPORT PLEDGES

Policymakers have begun voicing their plans for 2025 in recent weeks, well aware of the fact that Trump's return to the White House will place considerable strain on an already ailing economy.

Over the weekend, an official at China's central bank said it had room to further cut the amount of cash banks must hold as reserves, but credit numbers out last week showed past easing had done little to boost borrowing.

That is partly because policymakers have yet to find a fix to a years-long property crisis that is dragging on consumer confidence, with some 70% of household savings parked in real estate.


And while there was some encouraging signs in China's new home prices, which fell at the slowest pace in 17 months in November, it remains too early to call a recovery, analysts say.

Stabilising the property sector, which at its peak constituted 25% of the economy, will be key if Beijing is to maintain a growth target of around 5% for next year, which Reuters has reported that policy advisers have recommended.

A recent Reuters poll predicted China will grow 4.5% next year, with new U.S. tariffs potentially shaving up to 1 parentage point off growth.

On Monday, Moody's Ratings raised China's GDP growth forecast to 4.2% from 4% for 2025.

At last week's Central Economic Work Conference (CEWC), a closely-watched agenda-setting meeting, China's top leaders pledged to raise the budget deficit, issue more debt, and make boosting consumption a top priority.

The remarks echoed commitments made by a meeting of top Communist Party officials, the Politburo, earlier this month, which endorsed an "appropriately loose" monetary policy in the first easing of its stance in 14 years.

"We think the deleration in November will probably prove temporary, with growth likely to pick up again over the coming months as policy support continues to be stepped up," said Julian Evans-Pritchard, head of China economics at Capital Economics.

"But we doubt that stimulus can deliver anything more than a short-lived improvement, not least because the current strength of export demand is unlikely to last once President Trump starts to put some of his tariff threats into action."

(Reporting by Kevin Yao, Joe Cash and Ethan Wang; Editing by Shri Navaratnam and Jacqueline Wong)

China's weak consumption drags on economy as Trump tariff threat looms

China's industrial output growth quickened slightly in November, while retail sales disappointed, keeping alive calls for Beijing to ramp up consumer-focused stimulus as policymakers brace for more U.S. trade tariffs under a second Trump administration. The mixed data underline how challenging...

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