China's biopharmaceutical industry not only holds a place in the generic drug market but has also become the world's second-largest new drug development country, following the United States. With government support, its strategy of improving existing drugs and stabilizing funding sources through licensing transactions has demonstrated strong competitiveness in innovative drug R&D, stunning the global industry.

Rapidly rising, China's biopharmaceutical industry leverages cost-effective and efficient R&D advantages, enabling a number of private enterprises to shine on the international stage and attract frequent transactions from overseas companies. According to data from investment bank Stifel, 30% of large pharmaceutical company licensing deals in 2024 came from China, compared to 12% two years ago. American media bluntly stated that "China's innovative drugs have reached the DeepSeek moment," meaning that China has made groundbreaking progress in the biopharmaceutical field, comparable to its achievements in the AI (artificial intelligence) sector.

According to reports by Ta Kung Pao, in recent years, China has comprehensively supported biopharmaceutical enterprises and the entire industrial chain innovation through a series of policies. In January this year, the General Office of the State Council issued an opinion on comprehensively deepening the reform of drug and medical device supervision to promote high-quality development of the pharmaceutical industry, providing specific guidance for establishing and improving regulatory systems and mechanisms to support innovative drugs and medical devices.

In July 2024, the State Council released the "Implementation Plan for Comprehensive Support of Innovative Drug Development," proposing to strengthen policy guarantees across the entire chain, making full use of pricing management, medical insurance payments, commercial insurance, drug procurement and use, and financing policies. It also aims to optimize review and approval processes and hospital assessment mechanisms to collectively promote the breakthrough development of innovative drugs.

Drug Authorization to International Pharmacies

Under a series of policy supports, an increasing number of Chinese biotechnology enterprises are beginning to license their independently developed drugs to global pharmaceutical giants, marking the growing influence of China in the global pharmaceutical industry.

On February 6th this year, Shanghai-based biopharmaceutical enterprise Henlius announced that it had signed a licensing agreement with Dr. Reddy's Laboratories S.A., one of the largest generic drug manufacturers in India, regarding its independently developed investigational daratumumab biosimilar HLX15 (recombinant humanized monoclonal antibody injection targeting CD38), achieving the authorization of HLX15 in the European and American markets. The total amount of this licensing transaction exceeded $100 million.

Henlius' Chief Business Development Officer and Senior Vice President Cao Ping stated that HLX15 is a candidate for Johnson & Johnson's daratumumab biosimilar. According to the latest data from IQVIA (one of the largest pharmaceutical consulting companies globally), daratumumab's sales worldwide were approximately $10.6 billion in 2023.

Staff members of Suzhou Beikang Medical Co., Ltd. perform sample pre-processing, which will later be used for sequencing. (Xinhua News Agency)

No daratumumab biosimilar has been approved for marketing worldwide yet. HLX15 is expected to become the first globally approved daratumumab biosimilar. "The differentiated layout of HLX15, combined with the local experience of our partners, will provide a new paradigm for the global competitiveness of Chinese biologics."

Besides Henlius, over the past two years, major pharmaceutical groups such as AstraZeneca, GSK, and Merck have signed licensing agreements worth more than $1 billion with Chinese biotech companies, demonstrating the growing strength of China's biopharmaceutical enterprises.

An earlier report from the Wall Street Journal revealed that last year, Summit Therapeutics, an American biopharmaceutical company, announced that one of its new drugs outperformed Merck's best-selling cancer drug in lung cancer treatment trials.

Notably, this new drug was developed and licensed by a Chinese biotechnology company. The Wall Street Journal described this result as a watershed moment in the biotech industry, highlighting the emerging competitiveness from China.

It is not difficult to see from these figures that competition from China is rapidly catching up with the United States. According to data from investment bank Stifel, 30% of licensing deals from large pharmaceutical companies in 2024 came from China, compared to 12% two years ago, and this trend is expected to continue this year.

Automatic lamp inspection machines of Liaoning Chengda Bioengineering Co., Ltd. inspect lyophilized formulations. (Xinhua News Agency)

Data from biopharmaceutical industry research institution DealForma shows that in 2020, less than 5% of transactions valued at $50 million or more in the pharmaceutical industry involved China; by 2024, this ratio had risen to nearly 30%. Stifel predicts that in ten years, many drugs entering the U.S. market will originate from Chinese laboratories.

Goldman Sachs published a depth investment value analysis report on China's biotechnology, expressing continued optimism about the biotech sector within China's healthcare sector. Global recognition of China's innovative power is ongoing and will continue. The report also mentioned that leading companies such as Zai Lab, Legend Biotech, NovoPharma, BeiGene, and Innovent Biologics have become preferred investment targets. By 2025, Chinese enterprises are expected to continue gaining international recognition for their innovation capabilities across broader therapeutic areas.

In the process of China's biopharmaceutical industry surpassing global technology, the self-reliance and efforts of enterprises played a crucial role. The report noted that from interviews with pharmaceutical companies and medical device companies in the pharmaceutical industry, the research and development process is often arduous and time-consuming, but through long-term accumulation and practice, they can continuously improve technology and accumulate experience.

"The development of biosimilars is expensive and time-consuming, usually taking five to six years, with development costs potentially reaching $200 million based on the price of the reference originator drug." Cao Ping stated that on February 6th, the Group had cumulatively invested approximately RMB 120 million (unaudited) in HLX15 by November 2024. According to the terms of this cooperation, Henlius will continue to take responsibility for the R&D of HLX15 and bear the corresponding costs.

Overcoming Talent and Funding Challenges

Cao Ping pointed out that new drug R&D faces numerous challenges in terms of technological complexity, global registration applications, large-scale international multicenter clinical trials, international scale production, and quality control.

She further explained: "For example, the challenges in the biologics chemistry, manufacturing, and controls (CMC) phase involve highly consistent process development with the originator drug. Since biologics are prepared using live cells or biological systems, their production process is very complex, highly sensitive to process changes, and molecular structures may change during the production process, significantly impacting the final product quality, purity, biological characteristics, and clinical effects."

Aside from pharmaceutical companies, enterprises in the medical device sector of the biopharmaceutical industry also expressed the difficulty and risks associated with developing new products independently.

The independently developed Tumor Multi-Port Endoscopic Surgical Robot of Shanghai MicroPort Robotics (Group) Co., Ltd. has recently received approval from the National Medical Products Administration for market entry. Relevant company officials stated that everything started from scratch, so for the first five years, they focused all their efforts on overcoming the most challenging technologies.

"During this period, including controllers, endoscopes, software algorithms, etc., there were no talents, so we trained them ourselves; lacking industrial support, we explored on our own; needing technical direction, we discussed repeatedly with clinical doctors in hospitals. After years of R&D innovation and industrial accumulation, we achieved today's results," the official said.

The Tumor Multi-Port Endoscopic Surgical Robot of Shanghai MicroPort Robotics has already completed commercial installations and entered clinical application in several countries around the world. (Source: Weibo)

AI Reshapes Industry Ecosystem: Transition from "Following" to "Running Neck and Neck"

Regarding China's pharmaceutical industry entering a peak period of independent R&D, Cao Ping stated: "We see that China's pharmaceutical innovation is gradually transitioning from 'following' to 'running neck and neck.' Policies and capital are the engines, while technology is the fuel. These three forces collectively drive the leap from 'China New' to 'Global New'."

Of course, the efforts of enterprises cannot be ignored. For Henlius, the company has formed a complete and standardized full-industry-chain technology platform through long-term accumulation in antibody technology, discovery and optimization of biologic macromolecular drugs, preclinical studies, construction of production cell lines, upstream and downstream process development, formulation development, and clinical development.

At the same time, Henlius successfully built an efficient integrated global R&D, regulatory affairs, and clinical development operations platform. To date, Henlius has completed over 700 regulatory submissions worldwide and obtained more than 500 approvals, covering countries and regions such as China, the United States, the EU, Canada, Indonesia, and Japan. It has also conducted international multicenter clinical trials in countries and regions such as the United States, the EU, Southeast Asia, and Japan to accelerate the globalization of its products.

Going Global Has Become a Must

Relevant officials of Shanghai MicroPort Robotics stated that going global has become a must for Chinese medical device enterprises. The first core product to go abroad is the Honghu Orthopedic Surgical Robot and the Tumor Multi-Port Endoscopic Surgical Robot, which have already completed commercial installations and entered clinical applications in multiple countries worldwide.

"Our products go abroad not by competing on low prices but by winning customer trust through innovative technology, product quality, customer service, and highly valuable clinical solutions," he said.

Henlius' globalization strategy involves advancing both "the breadth of licensing cooperation" and "the depth of independent innovation" simultaneously. It not only exports innovation capabilities and affordable high-quality R&D paradigms but also fulfills the mission of patient accessibility while realizing commercial value.

Cao Ping stated that true global innovation must be rooted in real-world needs. When Chinese pharmaceutical companies can enhance patient survival with high-quality data, this is the best interpretation of "innovation discourse power."

The report pointed out that in recent years, AI is reshaping the biopharmaceutical industry at an astonishing speed. Through the deep integration of big data analysis, machine learning, and deep learning, AI can accelerate the drug development process, reduce traditional difficulties such as input costs, and so on. Especially in China, the integration of AI and biopharmaceuticals is becoming a key engine driving industrial upgrading, with multiple pharmaceutical companies and tech companies achieving technical breakthroughs.

Breaking the Double Ten Law

In fact, AI-powered drug development is not uncommon domestically. FuKang Pharmaceutical is a Chinese company deeply integrating AI into drug R&D, focusing on drug R&D and production in the fields of oncology and anti-aging. The company uses its self-developed Right 6D combined with AI technology platform to make progress in the field of oncology, providing innovative treatment options for a wide range of cancer patients. Its product pipeline is strong, covering solid tumors such as breast cancer, prostate cancer, pancreatic cancer, liver cancer, stomach cancer, and lung cancer, which urgently need innovative treatment solutions domestically and internationally.

In the pharmaceutical industry, there is a "double ten law": the average cost of developing an innovative drug from the start of R&D to market launch exceeds $1 billion, and the R&D time exceeds 10 years. Approximately 90% of drugs fail during the clinical trial phase. Crystal Technology, a leading domestic AI drug R&D company, has broken through the AI + quantum computing reconstruction of the drug R&D logic. In the drug discovery stage, its algorithms can quickly screen potential compounds and predict crystal stability, shortening the early R&D cycle by 40% to 60%.

The rapid development of China's AI-powered drug R&D benefits from multiple factors. National policy support provides fertile ground for the industry. The "14th Five-Year Plan" for bioeconomic development clearly states that, facing a series of major diseases, relying on artificial intelligence technology, biomedical, and health big data resources, intelligent auxiliary decision-making knowledge models and algorithms should be developed to assist in personalized new drug R&D and provide decision support for disease diagnosis and treatment. Moreover, major technology giants such as Huawei, Baidu, Tencent, and JD.com are increasingly investing in AI, further enriching the industry ecosystem.

On June 12, 2024, visitors viewed ultrasound therapy robots at the 10th China (Shanghai) International Technology Import and Export Fair. (Xinhua News Agency)

Ren Feng, co-CEO of Insilico Medicine, stated that in 2025, there will be two highlights in the AI drug R&D field: first, the number of clinical milestones will increase; second, large transactions involving platform licensing, CRO business, and pipeline trading will rise.

Lai Lipeng, co-founder of Crystal Technology, believed that the core value of AI lies in helping to fill the "unknown unknowns," supporting decision-making through powerful memory and analytical capabilities. For example, in the biopharmaceutical industry, AI technology demonstrates immense potential. Traditional drug R&D faces the "anti-Moore's Law" dilemma, such as long R&D cycles, low success rates, and high costs. AI technology significantly improves R&D efficiency through end-to-end optimization and multifactor integration.

On September 4, 2023, at the Health and Sanitation Services Special Exhibition in Shougang Park, staff members of Beijing Union Hospital displayed knee surgery robots. (Xinhua News Agency)

Original article: https://www.toutiao.com/article/7499008482461499945/

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