China’s biotech firms are pressing ahead with global expansion, a trend industry insiders describe as “irreversible”, even as Washington rolls out investment restrictions and national security measures aimed at slowing their advance.
“The US has erected numerous regulatory and non-tariff barriers for Chinese companies seeking to enter the American market,” said Zhang Jun, co-head of the global healthcare group at Chinese investment bank Citic Securities, at the Hong Kong Exchanges and Clearing’s Future Tech Summit in Shenzhen on Thursday.
“But the trend of Chinese biotech companies commercialising their products globally is already irreversible. In markets such as Europe, tight fiscal conditions have made governments more receptive to Chinese innovative drugs and medical devices that offer strong cost-performance advantages.”
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Overseas markets represent the most profitable segment of the global pharmaceutical value chain, with the United States remaining the world’s most lucrative drug market.
Chinese companies now account for about half of all global biotechnology business development deals, including out-licensing agreements, according to Citic Securities. Beijing has identified biotechnology as a strategic industry to help drive economic growth.
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Speaking at the same event, Ren Feng, co-CEO and chief scientific officer of Hong Kong-listed AI-powered drug developer Insilico Medicine, said international expansion was essential for Chinese biotech companies.
“If you don’t internationalise and only focus on the China market, it will be very difficult to build a big future,” Ren said. “And when it comes to global expansion, Chinese companies generally lack large overseas clinical teams. That is the weakness. So the only way out is to pursue business development deals.”