Chinese Biotech Strategies: Biologics or Small Molecules

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While the vast majority of the global pharma market still comprises small molecule drugs, the biologics sector has grown rapidly since its inception in the 1980s, and presently, biologics represent a stunning eight out of the top ten best-selling drugs in 2019. In China, this sector has lagged behind developed markets. However, despite being a late starter, the Chinese biologics sector’s growth has outpaced global growth, particularly in the last couple of years. According to estimates, the biologics market in China has surged from just under USD 10 billion in 2012 to over USD 22 billion in 2019.

 

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For players within the Chinese market, the opportunity of playing in the nascent biologics market is too irresistible to pass up. With the regulatory reforms encouraging the entry of global innovative medicines – many of them biologics – into the market, rising trends in biologics INDs and INDs are clearly visible. As MNCs face increasing price pressures on their previously lucrative legacy portfolios, the need to bring their novel products to China has grown urgent. Established Chinese pharmacos that previously played in the chemical drug or traditional Chinese medicine (TCM) spaces are also moving into biologics, where they can typically benefit from lower competition levels and higher prices.

 

The same goes for biotechs; many of the biotech companies established over the past decade have chosen to focus on biologics, and in many cases, monoclonal antibodies (mAbs), driven by the severe unmet medical needs in the country and the relative lack of competition. As an illustration, the mAb market in China – valued at USD 730 million in 2014 – reached a staggering USD 9 billion just four years later.

 

In China, the development of the biologics industry is far behind more developed countries like the US or Europe

Michael Yu, Innovent Biologics

 

As leading player Innovent Biologics chairman and CEO Dr Michael Yu lamented, “in China, the development of the biologics industry is far behind more developed countries like the US or Europe. The vast majority of the Chinese industry is generics – and still today, the quality is low and bioequivalence is not always established. Fortunately, the government has invested a lot of efforts to rectify this.” For Innovent, they decided to specifically focus on monoclonal antibodies because, as Yu indicated, “in the US, over 90 percent of patients that qualify for such therapies have access to them. In China, only six percent of such patients do. Furthermore, the affordability and availability of such therapies are very limited. This is what inspired the establishment of Innovent.”

 

On the other hand, despite the headlines-grabbing developments in biologics over the past decade or so, including monoclonal antibodies, CAR-T as well as other cell and gene therapies. HitGen’s chairman and CEO Dr Jin LI stands by the company’s choice to work with small molecules, emphasizing the immense potential that continues to exist in the chemical drug space. He weighed up, “on one hand, it is true that small molecules are a more mature field. The characteristics of small molecule therapeutics are well-known and well-established, and the industry knows how to manage small molecules fairly well. Not much will probably change here.” However, “there are many exciting developments within this space. There is a lot of potential to use small molecules to target the new biological mechanisms uncovered over the past couple of decades – in fact, the speed of discovery is actually accelerating.”

 

There is a lot of potential to use small molecules to target the new biological mechanisms uncovered over the past couple of decades

Jin LI, HitGen

 

For instance, he explained, “we used to focus predominantly on small molecules as inhibitors or activators of proteins important for disease onset and progression [but] even with traditional targets like proteins, we are still only targeting a small percentage of them. Today, we are exploring many different therapeutic mechanisms for small molecules.”

 

To his mind, there are a few therapeutic areas in which small molecules will continue to prove indispensable. He highlighted, “another important advantage is that small molecules can enter cells or penetrate the blood-brain barrier. So far, we can see that neurological diseases have been a difficult area for biologics to tackle.” Ultimately “we are a strong advocate for the innovative potential of small molecule therapeutics, which we believe will continue to have a major role in the industry’s development.”

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