Dr.Yu:Strategies of Developing an Innovation System for Pharmaceutical Industry in China.
Since the “twelfth five-year” plan, China’s bio-industry has experienced a rapid growth, with CAGR up to over 15%, double than the speed of GDP in this year. In 2015, the scale of bio-industry has over 3500 billion yuan, presenting a leap from quantitative change to qualitative change.
It is no doubt that innovation is the main driver of this industrial development. In order to have a better understanding of China’s bio-industry development replaced by pharmacy, especially new medicine innovative status, intellectual has studied BioBAY in recent years, having become a shadow of fast development of China’s bio-industry after 10 years increasing development. We will regard BioBAY as section to provide reads with the real appearance of China’s bio-pharmaceutical innovation.
In 2016, BioBAY has two new medicine research companies, which are Innovent Biologics and Jishi medicine, ranking within top 10 of global bio-pharmaceutical investment, with total 0.41 trillion dollar of money raising. In 2015, the two times cooperation between Innovent Biologics and American Lilai pharmaceutical group has become the milestone of China’s bio-pharmaceutical industry by developing new tumor immunity to cure bispecific antibody with totally 0.33 trillion dollar.
Doctor Yu Dechao, China’s “thousand people plan” expert, derector of Innovent Biologics said to intellectual, under about 20 years promotion of China, basic scientific level has improved largely, so does new medicine research environment. But, in the respect of new medicine research and supervision, national payment system and capital market access, new medical innovation always is being limited. How to create a better new medical research environment? The followings are Doctor Yu Chaode’s suggestion.
Intellectual:Recently, wall street journal and American chemical weeks have witnessed the boom of China’s new medical research market, so what’s your opinion?
Dr.Yu:I think the two articles have exaggerated the status of China’s new medical research, especially wall street journal using “Powerhouse” to describe China a strong country of biotechnology in the world. Maybe, I should say China is reaching the purpose but there is still a long way. Undeniably, China’s bio-industry has experience a rapid growth in recent years. There are two major reasons: one is the continuous support of four five-year plans which are from “ninth five-year plan” to “twelfth five-year plan”; the other one is increase of China’s basic research and numerous talents coming back to China. For biotechnology industrialization, from my part, it isn’t come really. Lots of technologies have been in an “under developing” stage. However, it has a bright future because of the conception changes of international market on China’s medicine. Years ago, when global market talked about China’s medicine, the general impression was worrying, fake, and low quality, so no foreigners would like to lash money to buy China’s things. Nowadays, a big environment of China’s new medical research has turned well from policy, talents, capital, venture investment and supervision. The eye of global market on China’s medicine is changing. As long as you have good goods, they would rather to invest you.
Intellectual:In recent years, as the rapid development of bio-industry, whether we have a broader space to improve research environment or to encourage medical innovation?
Dr.Yu:For innovation, no matter what industry, the three aspects is very important, which I call as innovative eco-system: the first one is basic research. All the advanced medicine are based on it. After “fourth five-year plan”, China has improved its basic study and technology, with plenty of papers and patents. But, the original innovation is not so much. The real reforming technology is still less, like gene editing, RNA vaccine and other technologies. Last year, RNA medical technology became the most money raising company which was located in Boston, America. It raised more than 0.04dollar at A stage. Besides, it completely changed the traditional thinking and acting. China still has few reforming technical breakthrough like this; the second is regulatory science. Surprisingly, CFDA recently has been implementing large scale reform, which leaves a strong point on the innovation history of China medicine. For example, in 2016, CFDA has released integrated comment of generic drug, requiring doing a comment again of the quality and effect of specified marketing generics and removing all underqualified generics. China’s innovation especially pharmaticeucal industry, needs a strong safeguarded “regulation”, which would promote the long-term development of China medicine. This year, CFDA has released several major reforms. In March, it carried out Decision on adjusting the relevant matters concerning the registration administration of imported medicine. In May 11, it continuously publicized three notices of encouraging new medicine development in a day (for opinion drafts). This unprecedented reforming strength has boosted the China medicine to global.Medicine supervision is a kind of science, following “scientific spirit” and “scientific path”. In fact, all medical technologies, product breakthroughs in America have a close relationship with their supervision science. In America, if you have creative ideas, or fantastic things, you are admitted to try and to sale in market as long as they are allowed by science; the third is market access. New advanced medicine must ensure the inventing company or person to make money. With fortune, they have the power to promote innovation. However, we now face a status that new researched medicine would not sale out because it cannot enter medical insurance, so that company cannot make money. Here, I have a number. In 17 innovative medicines of China stipulated, there are only 4 medicine with over 0.01 trillion sales. The company cannot make money even with 0.01 trillion sales for large investment. A passage on people’s daily, I wrote that reasonable repayment is the base of sustainable innovation. Therefore, I think innovation can be defined as three aspects which are basic study, regulatory science and market access. China would have real innovative drugs by the implementation of the three aspects.
Intellectual:Recently, in order to encourage the unlisted new medicine from abroad, CFDA has conducted clinical test after approval, which narrows the listing time. But many people believe “the wolf is coming”, so what’s your opinion?
Dr.Yu:Years before, China was always making drugs with a closed door. The foreign company want to come in. there is a threshold “three declarations and three approvals”. It is intentional to prevent foreign companies and protect companies in China. Lately, the draft of CFDA, from my part, is good because of three importance: firstly, it is good for people to have opportunity to use most advanced medicine in the world. In the past, these medicine would be in China market after five or six years in foreign market; secondly, it is profitable for foreign company because of China being a second large market; thirdly, it generates great shock for Chinese company. But better a finger than aye wagging, like China joint in WTO, now looking back to it, the decision forces us to realize a great development.
Intellectual:Many people think Innovent Biologics develops very quickly, so which main reasons it can be attribute to?
Dr.Yu:Innovent Biologics is founded in August, 2011, with less than six year development. Its rapid development majorly attributed to a good times, being in the right place at the right time, and in harmony with our neighbor. If we say our company has character, it is creation. To judge one thing, the simple standard is firstly whether it can be approved or not; and secondly, whether multinational company would buy it with big money. Five years ago, our company had a goal to make drugs with world standard. Now, we must be the only Chinese company which passes world top 500 pharmaceutical company and GMP auditing. Besides, we have cooperated with Lilai Company on six antibodies in the world.
Intellectual:On medical research, what’s Innovent Biologics’s design? What’s your measuring base?
Dr.Yu:Nowadays, we have 15 monoclonal antibodies, with 6 in clinical test and 4 in third period of clinical test. Some people say, few companies in the world develop medicine so quickly. We are committed to monoclonal antibody for tumor. Actually, in 2016, there are 8 biological drugs in 8 best sellers around the world. There are 57 biological drugs in 100 best sellers. Among them, Humira is the best seller with 1.6 billion dollar sales. Besides, its profit equals to the profit of all medicine in China. The medicine maybe not sale good in China. In China, the medicine sale depends on doctor but outside China, the medicine sale depends on its good treatment and safety. What’s more, I developed a new type Conbercept, for eye illness. It is now one of the best sellers in China. Predictably, its sales will over 1 billion yuan. Besides, it also is the first biological drug named for China by WHO. Therefore, I like ophthalmology.
Intellectual:Now, the big environment is pretty good, but how to persist continuous innovation? Lots of companies are followed by creative hotpot, without a fixed direction, so how to seize a good direction?
Dr.Yu:We are focused. With so many macromolecules and small molecules, there are several fields in macromolecule. We refuse to do it including ADC medicine in monoclonal antibody. American company has done many research on it and we just make monoclonal antibody. We hope one day, that they are high qualified biological drugs available to the ordinary. A company is just like a man who can act or cannot act. We collectively do the best segment market. Actually, monoclonal antibody is a huge market, with 83% monoclonal antibody in modern researched biological drug.
Intellectual:China has many large pharmacy enterprises, but many are familial enterprises. They have done differently to the international. From your part, are they connected to the international? Are they guiding China pharmacy in future?
Dr.Yu:Pharmaceuticals sector is still in initiative phase in China. Unlike other industry, resource is of importance in this sector. A familial company has the first returns with many resources, which is unlike us no first returns. The sector returns by large-scale investment, so familial company is not sure to make good. There are several good familial company, and China also has a lot of companies like this. Of course, in this era, pharmaceutical company transforms to a real innovative industry. It must to face the world, standing on a global platform and then being innovative company.
Intellectual:xperts said, nowadays, bio-industry, technology, and capital are not the big problem. But lack of comprehensive administrator, this situation would possibly have no influence on researched company. For a productive company, how to face it?
Dr.Yu:Well, at present, most companies including our company have most returned students who focus on technology, so bio-industry would not succeed only depending on researches. Therefore, I always remind me and my team. I do not hope that others see Xinda only an advanced medicine research. Our things are based on centered and guided by market, including our innovation and input. We employ a kind of international talents, using internationalized capital to make new product with international investors and market. Our company is in transforming period from research to commercial and now, we are ready to operate sales business.
Intellectual:Now, China’s capital market cannot support innovative company, if a company want to be listed, it must have profit. How do you think of it?
Dr.Yu:Personal opinion, though China at present is releasing innovative national strategy, the supporting has yet implemented. China's capital market always pursues a short-term return which is extremely unfavorable for the policy. For example, there is a barrier for our innovative company to enter into capital market. Only profitable company can be listed by sailing normal saline and syrup for it can make money. This would lead to the real innovative company not being listed when money losing. But when it has profit, is it necessary to be listed? Unlike American Nasdaq, you can be listed with a good business mode, innovative base, and potential profit.
Intellectual:What should China’s capital market do to promote innovation?
Dr.Yu:American security committee supports innovation. That’s why America always walks in front of world. For a long time, American government’s all functional departments are serving for national strategic support to let America be an innovative center. Moreover, American innovation could be classified as the following two aspects: firstly, if you can immigrate, they give you green card, which attracts all creative talents to America; secondly, innovation must get a return, creating personal fortune and large social fortune. Specially, if innovation could generate a huge social fortune, this great self-realization would promote innovative resource forming a compound power.
Intellectual:What’s the biggest challenge do you think, on making innovative drugs in China?
Dr.Yu:The biggest challenge is the third factor (market access) in what I talked three factors just now. Usually, a good drug ultimately could not share with people. Therefore, a country must change the payment system because America depends not on the government but the commercial insurance. So China must intensify efforts to develop commercial insurance, to open medical market, and to attract more social funds. We make tumor drug save people, but if all the expense undertaken by individual, most villagers would not afford it because of expensive fees. Therefore, we need a payment system. The key reason why America becomes a leading country on creative medicine is that it has the biggest market. It has a close relationship with a comprehensive commercial insurance system. The large part of patient’s fees would be paid by commercial insurance company.
Intellectual:What’s the difference in China and American environment?
Dr.Yu:For us, the biggest influence maybe also is capital market. In American entrepreneurship Association, someone would continuously take over it. When it comes to a new phase, someone would take over it. For example, after my “young crops” medicine, someone would buy it indifferent phases. What’s more, it has an existing mechanism. All these become a sound circulation for investor, creator and product. It is totally a sound ecology. But no this ecology in China, if you make (medicine), you must stick to the day of listing. Therefore, it has a huge venture.
Intellectual:Looking for next 10 years, how does the China bio-industry?
Dr.Yu:In my opinion, the market value is ten times larger than now. for example, monoclonal antibody market now is 8 billion and then, it would turn to 80 billion.
Intellectual:Is there any possible to emerge a company like Genentech in the following five or ten years.
Dr.Yu:In just five or ten years? Of course no.
Intellectual:More fatherly, is there any possible?
Dr.Yu:Yes, it cannot appear in just five or ten years. Now, China’s overall innovative direction is still put priority to tracing. Like running on the playground, all people follow to run with it. Still, there are many people running outside of playground. This is not a good way with wrong direction and more wastes. Fewer people lead the race, so we should slowly follow the race, and then run with them and at last lead the race. We need a process.