News & Insights New Era for China’s Biopharma Sector

New Era for China’s Biopharma Sector
Talent returning to China from overseas, favorable policies and an influx of capital have driven innovation in China’s fast-growing healthcare industry.

New way to tackle old puzzles

Ray Yang, partner of Marathon Venture Partners, attributed the rapid growth of China's innovative medicines in the past five years and the enormous opportunities to be seen in the coming five years to the support of government and the return of senior scholars to China. The majority of scholars on the list of the nation’s "Thousands of Talents" Programme are leading experts in biological medicine.

Mr. Yang pointed to three driving forces in the genetic sequencing sector that he is focusing his investments on. The first is consumption upgrading. The second is the open-door policy, the most important driving force in the past five years and in the coming five years. The third is a massive market and the application of technology. Though still lagging behind the US in technology, China is on a par in its application.

Mr. Yang sees the big opportunity of medicine sales as lying at the grassroots level. With the progress of medical reform, grassroots-level organizations will play an increasingly important role in the healthcare system, with a corresponding rise in the ratio of medicine sales in the market. There is also a major opportunity for business in providing marketing support for multinational pharmaceutical companies and a distribution channel for basic medical supplies.

Based on his hospital management and investment experience for more than ten years in China, Christian D. Orejudos, former CEO/General Manager of Kunming LIH Skycity Rehabilitation Hospital, said the best hospital investment model is to quickly develop a hospital into maturity and replicate the same model in other cities to build economies of scale for generating more income and profit.

The rise of innovative biopharma companies in China

Lawrence Tian, founding partner of Yuanming Capital, expressed his approval and expectation of China’s fast-growing healthcare industry. Mr. Tian described the rapid expansion in recent years as the result of talents, policies and capital working together. On the talent front, the return of a large number of technical professionals in biochemistry to China has swollen the ranks of professionals with specialized knowledge and technology skills. Regarding policies, the China Food and Drug Administration, together with regulatory authorities, have since 2015 gradually accelerated the pace of reform, and by 2017, the reform efforts reached such a level that sharply reduced examination and approval time. As for capital, the healthcare industry has seen an influx of venture capital in recent years. Mr. Tian expected the trend to continue, with venture capitalists showing more favour to start-ups involved in biomedical manufacturing.

Mr. Tian also shared his insights into investing in biomedical start-ups and his selection criteria. He preferred companies with a team that is familiar with domestic and foreign markets and with successful experience, companies with a certain level of clinical capability, a considerable market presence and products that are predictable, and also companies with a relatively high shareholding concentration. Mr. Tian is convinced that there will be more successful teams of top scientists combined with leading investors in the future.

Bo Tan, President and CIO of 3SBio, shared his company’s strategy and vision for the future. Mr. Tan said that the overriding strategy of 3SBio covers the manufacturing of biomedicine and innovative medicine, and a focus on critical areas of medical treatment. He added that 3SBio will continue to improve its R&D and innovation capability to become an international company. He said that greater policy support will accelerate the examination and approval process for new medicines and reduce the level of uncertainty in the process. Against a background of favourable policy support, the focus in the future will be on mustering resources for building a clinical base, according to Mr. Tan.