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A picture of two scrawny monkeys huddled together in an incubator was all it took to confirm China’s status as a major presence in the field of advanced healthcare research.
Zhong Zhong and Hua Hua made headlines worldwide last week, becoming the first successfully cloned pair of primates to be created artificially in a lab.
Growing prowess in R&D, a rapidly developing healthcare market, and bullish investors have seen shares in Chinese biotech firms become highly sought after.
Zhong Zhong and Hua Hua, the world's first cloned monkeys.
Question marks remain over profitability and valuations, while ethics are at risk of being left on the sidelines amid a rush to develop world-leading research. Will China’s biotech boom be sustainable and world-changing?
China’s research ecosystem
Biotech research has been a major beneficiary of state support in recent years. Last month the Ministry of Science and Technology suggested biotech would account for four percent of GDP by 2020, with an output of eight to 10 trillion yuan (1.21 to 1.51 trillion US dollars).
A growing wave of young Chinese talent returning from overseas has also propelled the biotech boom, with many launching their own pharmaceutical startups or continuing their research in China.
According to Reuters, more than 50 Chinese institutions have applied for patents in gene editing technology alone, with China accounting for 20 percent of successful patents worldwide since 2004.
China's research into gene editing, while controversial, could unlock new treatments for cancer.
Regulatory reform has seen new treatment fast-tracked from the lab to the clinic, a process that typically takes many years in the West due to stringent requirements regarding clinical trials and ethics committees.
The historic pair of cloned monkeys sparked controversy over ethics, with several critics commenting that it was one step closer to cloning humans – an accusation rejected by Pu Muming, director of the Chinese Academy of Sciences' Institute of Neuroscience in Shanghai.
Soaring healthcare demands
Biotech companies promising to deliver pioneering treatment for cancer and other serious illnesses are being backed financially because all trends point to a huge and growing demand across China for new drugs.
An ageing population, changing lifestyles and concerns over the environment are all factors contributing to rapidly growing cancer rates. The number of people living with potentially life-threatening conditions like diabetes has also risen sharply in recent years.
Thirty-six percent of the world’s lung cancer diagnoses are made in China, while five-year-survival rates for cancer are 17 percent lower than the global average, according to the World Health Organization.
China faces a diabetes epidemic, according to the WHO.
The WHO believes 100 million people in China are living with diabetes, a condition which costs the world 850 billion US dollars every year.
Investors look to China for next ‘wonder drug’
Investors are now increasingly looking to Chinese scientists to come up with new treatments that could be sold not only domestically, but to the rest of the world.
Backing the right Chinese biotech company could provide a lucrative windfall, with the boom in the sector seeing company valuations and share prices soar.
In Hong Kong, new rules set to come into effect this year will see biotech startups valued at more than 1.5 billion HK dollars (192 million US dollars) able to apply for listings before even making a profit.
The move comes as part of a move to attract more IPOs from the growing mainland sector, after firms like BeiGene, Zai Lab and Hutchison China MediTech listed in the US.
Biotech deals worth 2.1 billion US dollars were made in 2016 and 2017, while the first month of 2018 alone has seen more than 400 million US dollars spent on the sector, more than the whole of 2015.
Google recently backed Chinese-US joint venture XtalPi, joining Tencent and Sequoia China in a 15-million-US-dollar fundraising round for the biotech startup.
Chinese firm BeiGene raised 750 million US dollars earlier this month, seeing its share price on the US Nasdaq index gaining 15 percent. Investors have been attracted by BeiGene’s development of cancer drugs, which are in the latter stages of testing and have the potential to compete with treatments developed by US giants like Merck and BMY.
Multinationals under pressure
Pfizer is one of the world's biggest pharmaceutical companies, and made a revenue of more than 50 billion US dollars in 2016.
Western pharmaceutical giants will be looking over their shoulders as Chinese companies rapidly gather pace in terms of growth and new, cheaper products, forcing them to consider cooperation deals to bolster their presence in China before new domestic firms force them out of the market.
US giant Pfizer announced Friday that it would grant Suzhou Kintor Pharmaceuticals the right to market and develop one of its major cancer drugs for an undisclosed fee. It marks the first time Pfizer has handed a Chinese firm the rights to one of its cancer treatments.
Other firms like GlaxoSmithKline have previously signed research cooperation pacts with Chinese institutions, while Novartis, Johnson and Johnson and Sanofi have all opened their own research centers in China to develop treatments specifically targeting the growing market in the country.
(CGTN)
