Ongoing geopolitical tensions between China and the West have led the G7 group of countries to warn of the threat of “economic coercion” from China and the US to scrutinise Chinese investment in its biotech sector more closely. Against this backdrop, and despite many of the leading lights in global biopharma now scaling back their China presence or halting further investment, one company is bucking the trend.
Anglo-Swedish drugmaker AstraZeneca, the largest foreign pharma company by sales in China, is currently doubling down on the country and its leadership have not been shy in showcasing what they see as the opportunities that still exist in the world’s second largest pharma market. Indeed, following a two-week trip to China in April and the signing of three licensing partnerships with local firms, CEO Pascal Soriot declared that China was “completely open” to multinational pharma, adding that “we definitely could make acquisitions. There is no limitation to this.”
On an April press call, Soriot proclaimed that “It’s hard to not be impressed by the progress that has been made in China over the last few years,” also noting that Chinese biotechs, would “shape the future of medicine.” AstraZeneca plans to use its presence in the country to “tap into this innovation and help those companies develop and commercialise their products globally,” according to reporting from the FT.
Having established a dense network of partnerships and made several capital investments across China, not just with regional governments in its biggest cities, the company is now perhaps more appealing to the Beijing government than those of some of its competitors. China market entry strategist Paul O’Brien asserts that these partnerships and investments have helped “blur some of the boundaries” between being seen as a purely foreign entrant and “one with significant skin in the China market.”
The company has followed the demands of China’s developing healthcare system closely, including through building thousands of centres within hospitals to deliver its drug for asthma and chronic obstructive pulmonary disease, ailments which affect over 100 million people in the country.
AstraZeneca is also the market leader in Hong Kong, where the market framework allows it to bring global innovation to market more rapidly than to the mainland. General Manager for Hong Kong and Macau Shan Wu, previously head of the company’s 400-strong breast cancer franchise team in Shanghai, is keen to draw from AstraZeneca’s mainland experience to foster further success in the city.
“We are looking to implement some of our mainland China approaches in Hong Kong, which is important as, being market leaders, we should do something to help shape the market and facilitate its growth.”
She continues, “Firstly, we have set up a new global R&D China centre in Shanghai, and this has helped the country catch up with the global AstraZeneca pipeline, because for business to grow the product range must broaden. Secondly, there is an industry fund that has already invested in early 20 companies over the last two years, which has enriched the AstraZeneca pipeline and empowered the global R&D operations of the company. Thirdly, mainland China AstraZeneca has an incubation centre to develop and mature these start-up companies.”
Pascal Soriot and the regional heads recently visited Hong Kong, which is a good sign they are thinking about us as a part of their future plans
Shan Wu, AstraZeneca Hong Kong & Macau
Shan adds that the relationship is reciprocal, with AstraZeneca Hong Kong facilitating scientific knowledge transfer between Hong Kong, Macau, and mainland China in its core focus area of oncology, as well as for some primary care products.
Especially given the company’s continuing China focus, Hong Kong is also on the radar of its global leadership. Shan explains that “Pascal Soriot and the regional heads recently visited Hong Kong, which is a good sign they are thinking about us as a part of their future plans. When you look at Hong Kong, it has a lot to offer, with world-class universities and a flourishing and well-managed healthcare system. We must collaborate more with stakeholders to make our impact bigger and show our HQ we are a place to invest in for the future.”
She concludes, “Furthermore, we want to work with the Hong Kong government as the biopharmaceutical industry market leaders to drive forward innovation, position it as an innovation hub, and act as the gateway between China and the Western world.”