Page 150 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
Pharmaceutical Group in Nanjing claims to have been two years. Other companies have invested in research
investing double-digit percentages of their revenues into outposts outside of major cities and forged relationships
research and development, on par with their American with Chinese academic centers (Garede).
and European counterparts (Laing).
Whether they are Chinese-born executives returning
In 2016, Janssen, a pharmaceutical company that is with a Western education or Westerners with experience in
part of the Johnson & Johnson Group, announced that multinational pharmaceutical firms, the Thousand Talent
it will expand its investment in China so that it can focus program, a 2008 Chinese initiative, continues to attract
on developing medicines including those that fight lung foreign experts with basic science and entrepreneurial
disease, a major problem in the country. Janssen’s Global interest to China. A large percentage of these talents are
Head of Research and Development William N. Hait said working in industries and universities where they are
that his company plans to launch these new drugs in the becoming well known for publishing in the top journals
Chinese market before going global. Johnson & Johnson’s in their fields (Laing). Christian Hogg, the boss at Chi-
aim is to set up a global research and development center Med—which has eight drugs in clinical development and
in China to combat lung cancer. Janssen plans to launch was listed on the NASDAQ stock exchange in 2016—used
more than ten new pharmaceutical products and expand to work at Procter & Gamble, a global consumer-goods
its line in 50 existing medicines during the next five years. firm. Samantha Du, known by many as the godmother of
“Johnson & Johnson has witnessed rapid development in Chinese biopharma, was formally an executive at Pfizer and
the Chinese market. One of the major global strategies of at one time managed healthcare investments for Sequoia
our company is to invest in China constantly. It is estimated Capital. Du helped found Zai Lab in 2013. The company
that the R&D will continue to play an essential role in licenses late stage drugs from Western pharmaceutical
the innovative process of Johnson & Johnson,” said Alex companies to develop and sell in China (Chinese pharma
Gorsky, Chairman and Chief Executive Officer of Johnson firms). The talent field in China was already broad, but now
& Johnson. Joaquin Duato, Executive Vice President and the country is investing in making this field deep (Laing).
Worldwide Chairman of Pharmaceuticals at Johnson
& Johnson said, “China is one of the most important China has become a biotech powerhouse, fueled by the
pharmaceutical markets for us globally. It is the second influx of foreign trained talent and what almost appears to
largest market after the United States.” “We have a strong be an endless amount of cash to buy foreign companies.
presence, including manufacturing, commercial, as well as The country’s rapid rise became apparent in 2016 at
research and development” (Zhong and Zheng). the annual meeting of the American Society of Clinical
Oncology. The meeting became a coming-out party for a
It’s clear why innovation in drugs is a priority for China little-known Chinese firm named Nanjing Legend Biotech
given its ageing population, higher incomes, and rising when it was able to snag a coveted spot among the late-
demand for healthcare. The domestic pharmaceutical breaking presentations for its new approach to cancer
market has quickly grown into the second largest in the immunotherapy. Brad Loncar, an independent investor
world. America’s Department of Commerce estimates that who heads an oncology focus fund, claimed people did
the Chinese market will grow from $108 billion in 2015 to a double take when they first saw the company’s late-
about $167 billion by 2020. Although the Chinese pharma breaking position in the program, “They had some great,
industry is still mostly fragmented with thousands of small very intriguing data. [Cancer immunotherapy] is really
manufacturers and distributors, that began to change in technical, and they really proved that they’re at the
2016 when the government encouraged the industry to forefront of it” (Garde).
consolidate primarily by raising standards for the quality of
new medicines and by improving the country’s regulatory Essex Bio, a Hong Kong company with a production plant
infrastructure. Healthcare deals have increased as a result. in Zhuhai, is another innovative Chinese pharma company.
Research firm ChinaBio claims life sciences pocketed more Essex Bio became a pioneer in the use of recombinant DNA
than $40 billion from local and foreign investments in technology, a process that involves molecular cloning of
2016 alone. CStone, Innovent and Ascletis, three Chinese DNA. It uses this process to develop its own unique series
biotech firms, together raised more than $500 million in of biologics. Pharmaceuticals are normally derived from
financing (Chinese pharma firms). Merck, Eli Lilly, Tesaro, chemical compounds; however, biologics are treatments
and Incyte have all signed multimillion-dollar deals for the derived from living organisms and are cutting-edge drug
rights on novel drugs developed in China over the past treatments. They have transformed the treatment of many
diseases such as arthritis, multiple sclerosis and cancer by
150
Pharmaceutical Group in Nanjing claims to have been two years. Other companies have invested in research
investing double-digit percentages of their revenues into outposts outside of major cities and forged relationships
research and development, on par with their American with Chinese academic centers (Garede).
and European counterparts (Laing).
Whether they are Chinese-born executives returning
In 2016, Janssen, a pharmaceutical company that is with a Western education or Westerners with experience in
part of the Johnson & Johnson Group, announced that multinational pharmaceutical firms, the Thousand Talent
it will expand its investment in China so that it can focus program, a 2008 Chinese initiative, continues to attract
on developing medicines including those that fight lung foreign experts with basic science and entrepreneurial
disease, a major problem in the country. Janssen’s Global interest to China. A large percentage of these talents are
Head of Research and Development William N. Hait said working in industries and universities where they are
that his company plans to launch these new drugs in the becoming well known for publishing in the top journals
Chinese market before going global. Johnson & Johnson’s in their fields (Laing). Christian Hogg, the boss at Chi-
aim is to set up a global research and development center Med—which has eight drugs in clinical development and
in China to combat lung cancer. Janssen plans to launch was listed on the NASDAQ stock exchange in 2016—used
more than ten new pharmaceutical products and expand to work at Procter & Gamble, a global consumer-goods
its line in 50 existing medicines during the next five years. firm. Samantha Du, known by many as the godmother of
“Johnson & Johnson has witnessed rapid development in Chinese biopharma, was formally an executive at Pfizer and
the Chinese market. One of the major global strategies of at one time managed healthcare investments for Sequoia
our company is to invest in China constantly. It is estimated Capital. Du helped found Zai Lab in 2013. The company
that the R&D will continue to play an essential role in licenses late stage drugs from Western pharmaceutical
the innovative process of Johnson & Johnson,” said Alex companies to develop and sell in China (Chinese pharma
Gorsky, Chairman and Chief Executive Officer of Johnson firms). The talent field in China was already broad, but now
& Johnson. Joaquin Duato, Executive Vice President and the country is investing in making this field deep (Laing).
Worldwide Chairman of Pharmaceuticals at Johnson
& Johnson said, “China is one of the most important China has become a biotech powerhouse, fueled by the
pharmaceutical markets for us globally. It is the second influx of foreign trained talent and what almost appears to
largest market after the United States.” “We have a strong be an endless amount of cash to buy foreign companies.
presence, including manufacturing, commercial, as well as The country’s rapid rise became apparent in 2016 at
research and development” (Zhong and Zheng). the annual meeting of the American Society of Clinical
Oncology. The meeting became a coming-out party for a
It’s clear why innovation in drugs is a priority for China little-known Chinese firm named Nanjing Legend Biotech
given its ageing population, higher incomes, and rising when it was able to snag a coveted spot among the late-
demand for healthcare. The domestic pharmaceutical breaking presentations for its new approach to cancer
market has quickly grown into the second largest in the immunotherapy. Brad Loncar, an independent investor
world. America’s Department of Commerce estimates that who heads an oncology focus fund, claimed people did
the Chinese market will grow from $108 billion in 2015 to a double take when they first saw the company’s late-
about $167 billion by 2020. Although the Chinese pharma breaking position in the program, “They had some great,
industry is still mostly fragmented with thousands of small very intriguing data. [Cancer immunotherapy] is really
manufacturers and distributors, that began to change in technical, and they really proved that they’re at the
2016 when the government encouraged the industry to forefront of it” (Garde).
consolidate primarily by raising standards for the quality of
new medicines and by improving the country’s regulatory Essex Bio, a Hong Kong company with a production plant
infrastructure. Healthcare deals have increased as a result. in Zhuhai, is another innovative Chinese pharma company.
Research firm ChinaBio claims life sciences pocketed more Essex Bio became a pioneer in the use of recombinant DNA
than $40 billion from local and foreign investments in technology, a process that involves molecular cloning of
2016 alone. CStone, Innovent and Ascletis, three Chinese DNA. It uses this process to develop its own unique series
biotech firms, together raised more than $500 million in of biologics. Pharmaceuticals are normally derived from
financing (Chinese pharma firms). Merck, Eli Lilly, Tesaro, chemical compounds; however, biologics are treatments
and Incyte have all signed multimillion-dollar deals for the derived from living organisms and are cutting-edge drug
rights on novel drugs developed in China over the past treatments. They have transformed the treatment of many
diseases such as arthritis, multiple sclerosis and cancer by
150
