1、Outlook on biopharmainnovation trends in ChinaJuly 2021Outlook on biopharma innovation trends in China | ContentsContentsPreface1. Innovative breakthroughs in the global biopharma industryBiopharma innovation is accelerating amid digital transformationApplication of AI in the entire medical industri

2、al chain is accelerating technical breakthroughsBiopharma enterprises R&D priorities are shifting to innovation of targets and the development of new-generation therapies2. Innovation trends in Chinas biopharma industryInnovative biologics are increasingly valued by government agencies; R&D and mark

3、et access are acceleratingChina becoming a digital transformation powerhouse for biopharma enterprisesInnovation breakthroughs as AI empowers the entire biopharma industrial chainNew-generation therapy: China a burgeoning market for CGTInnovation and implementation capabilities are shifting from MNC

4、s to local enterprises3. Conditions in Chinas biopharma industryRegulatory policies reform: the main areas and core policiesR&D models: innovative transformation and international cooperationLaunched products types: from universal innovation to leading innovationInvestment and M&A are creating innov

5、ative biopharma portfoliosFrom Importing to China to Exported from China4. Innovative biopharma development in the Yangtze River DeltaPolicy support: National and provincial policies promote regional integrationTalent accumulation: Top industrial talent is being brought in to accelerate scientific i

6、nnovation and reformCapital strength: Substantial capital support is being provided to enable innovative corporate development in the Yangtze River Delta5. Challenges and suggestions for biopharma innovation in ChinaEndnotes 242730344045660616770Outlook on biopharma innovation

7、trends in China | PrefacePrefaceInnovation is a major driver of industrial development across the world and a vital force in biopharma sector transformation and advancement. Over recent years, Chinas biopharma industry has been actively innovating in technologies, business models, and enterprise man

8、agement. Innovation occurs constantly, from using science and technology to empower new concepts and develop new therapeutic targets and options, to biopharma distribution and information interactions. As Chinas biopharma industry continues to boom, its technical innovations are increasingly aligned

9、 with those globally. Meanwhile, the government has enacted extensive reforms to support innovation in the sector. These developments, coupled with the rapid development of digital technology in China, have made other countries optimistic about the prospects for Chinas biopharma market, with many mu

10、ltinational pharmaceutical giants building and expanding their presence in the country. New business strategies and tactics conforming to Chinese characteristics will emerge to drive innovation and transformation in Chinas biopharma industry.The imperative transformation in the global biopharma mark

11、et has only become stronger in the wake of COVID-19. It has two levels, the application and empowerment of innovative technology, and explorations and breakthroughs in innovative R&D. Since the COVID-19 outbreak began, digital technology has been advancing much more rapidly, powering the innovative

12、development of biopharma companies to meet public demand for more precise, personalized medical services in the post-pandemic era1. Application and empowerment of innovative technology: Before COVID-19, biopharma companies adopted innovative technology to drive the entire biopharma industrial chain.

13、 The application scenarios included assistance with R&D, efficient clinical trials, real-time supervision and precise collection of clinical data, big data support, smart workflow, and other digital transformations. Since COVID-19 emerged, digital transformation has been forced to accelerate from lo

14、ng-term transformation to short-term necessity2. Explorations and breakthroughs in innovative R&D: At the end of 2020, Deloitte analyzed and set out the predictions for the biopharma market to 2025, forecasting a major shift in medical diagnosis and treatment, with clinicians making decisions based

15、on therapies that include 4P elements, which are predictive, preventative, personalized, and participatory. The main 4P products are digital diagnosis and treatment (e.g. AI and nanotechnology, etc.) and cell and gene therapy (e.g. epigenetics, cell therapy, and gene editing). Both are drawing wides

16、pread attention as new-generation treatments and many related studies are underway3.This report, produced in conjunction with the Shanghai Association for Science and Technology, is based on long-term observations of the biopharma industry. It explores biopharma innovation globally and in China, ass

17、esses the opportunities and challenges facing Chinas biopharma industrys innovative development, and analyzes and envisages biopharma innovation trends through the views of thought leaders in the sector.The innovative development of global biopharma is concentrated in Europe, the US, and other pharm

18、aceutical powers. Innovative breakthroughs, including first-generation innovative biologics in the 1980s and advanced CGTs in 2021, have been powered by digital and intelligent technologies, particularly artificial intelligence (AI). 12Outlook on biopharma innovation trends in China | PrefaceBiophar

19、mas digital transformation has accelerated since the COVID-19 pandemic began, and AI has been applied more extensively. There has also been a surge in new medicine development, with the number of discovered innovative targets reaching 139, its highest-ever level, in 2020. Furthermore, investment in

20、the development of new-generation therapies such as CGTs is rising across the world.Chinas biopharma industry has also witnessed an innovation boom, with the market expected to exceed RMB4 trillion by 2022, up from RMB3 trillion in 2018. Driven by global trends and Chinas dual circulation developmen

21、t model, innovation in Chinas biopharma industry has distinctive features such as heightened government emphasis on innovative biologics, advances in digital transformation, and the increasing power of AI throughout the biopharma industrial chain. Chinas biopharma enterprises are now at the forefron

22、t of the industrys global development, embracing comprehensive innovation and working towards becoming leading innovators themselves, rather than just following global leaders as they did before.To capitalize on this momentum, Chinas biopharma companies are receiving favorable inputs from government

23、 agencies, institutional investors, and tech companies. These include policy and regulatory reforms, capital inflow, and digital technologies. But they also face challenges, including weak basic research and a shortage of skilled employees in innovative technologies. Given these challenges, Deloitte

24、 believes four factorsenhanced basic research, stronger commercialization, increased government-enterprise cooperation to ensure efficient use of capital, and comprehensive talent enhancementare essential if innovative development in Chinas biopharma industry is to succeed. In addition to industry d

25、evelopment in China and globally, this report looks at biopharma conditions and trends in the Yangtze River Delta. A leading region for biopharma innovation and R&D, the Yangtze River Delta has clear advantages in research capacity, talent, and the completeness of its industry chain. However, like e

26、lsewhere in China, it also faces challenges, including insufficient basic research and the need to attract a highly skilled workforce. To boost the biopharma industrys innovative development in the Yangtze River Delta, basic research must be given more emphasis and the resources of industry stakehol

27、ders must be deployed to attract and develop talent.Given high technical barriers, the key to driving biopharma innovation lies in talent, which is a major advantage of the Yangtze River Delta.Ingrid Zhang, President, Novartis Pharmaceuticals ChinaQuotes from thought leaders in Chinas biopharma indu

28、stryChinas biopharma industry can come to the forefront of the world if it can better capitalize on the enabling opportunity provided by digital medicine.Shengli Yang, Academician, Chinese Academy of Engineering; Researcher, Shanghai Institute of Life Sciences, Chinese Academy of SciencesThe governm

29、ent should purposefully enable more small businesses to become more courageous to make innovations and go full steam ahead.Bin Li, Distinguished Professor and Doctoral Supervisor, Shanghai Jiaotong University, Deputy Director; Shanghai Institute of Immunology, Shanghai Jiaotong University School of

30、MedicineThe government can guide the basic research of the biopharma industry, but commercialization still entails market mechanisms.Ruilin Song, Executive Chairman, China Pharmaceutical Innovation and Research Development Association; PhDScientific innovation is about discovering something unknown

31、previously. We should think what the government wants and meet market needs.Guoliang Yu, Founder, Innoforce Pharmaceuticals; PhD in molecular biologyThe reasonable utilization of big data in new medicine development, discovery of targets, clinical testing and pharmacoeconomics is the priority in fut

32、ure development .Jason Yang, Chief Medical Officer, CStone Pharmaceuticals; Doctor of MedicineBiopharma innovation is borderless, but we need to find out innovation that conforms to Chinas national conditions.Yingfei Wei, Chief Science Officer, Innoforce Pharmaceuticals; Doctor of BiochemistryCurren

33、tly, China has quite few biopharma innovation projects that are genuinely first-class. This is because investment institutions are concerned about the risk-return on original R&D.Kenneth Sun, Managing Director, Medical Industry Team, Investment Banking Division of Morgan Stanley Asia-PacificInnovati

34、on is built on failure. The government should be more willing to take the risk associated with innovation. Richard Mao, Managing Director for Medical Investment, Orchid AsiaOutlook on biopharma innovation trends in China | Preface3Best Managed Companies (BMC) Handbook | 章节标题民企卓越管理公司项目(BMC)参选手册 | 章节标

35、题Outlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry41. Innovative breakthroughs in the global biopharma industryBiologics, the major biomedicine products, can be divided into innovative biologics (with R&D focused on providing the efficacy

36、and safety of products) and biosimilars (where R&D emphasizes whether products and controls have comparable pharmacokinetics, pharmacodynamics, safety, and immunogenicity). Their development is compared in Figure 1.1 and Table 1.1 below4.Clinical trialsPreclinical studyPharmacokinetics/Pharmacodynam

37、icsMolecular synthesis and screeningDegree of pre-launch development difficultySource: mAbxience, Generics, Biologics, Biosimilars: Whos Who? Curated by DeloitteSource: mAbxience, Generics, Biologics, Biosimilars: Whos Who? Curated by DeloitteVery difficultEasyFigure 1.1 The Difficulty of Pre-market

38、 Development for Innovative Biologics and BiosimilarsTable 1.1 The Development Process for Innovative Biologics and BiosimilarsBiosimilarsInnovative biologicsInnovative BiologicsBiosimilarsDevelopment cost (USD)800 million100-300 millionTime to market (years)At least 8-10 yearsAt least 7-8 yearsFocu

39、s of clinical trial studyEfficacy and safety Phase I-III clinical study Pharmacokinetic controlling clinical trial Phase IIIPatient size800-1,000100-500Post-launch researchPhase IV, risk management plan, including pharmacovigilancePhase IV, risk management plan, including pharmacovigilanceOutlook on

40、 biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry53rd-generation & 4th-generation innovative biologicsAntibody medicine, immunization therapy4th-generation innovative biologicsBispecific antibody, reconstituted polyclonal antibody, immunization ther

41、apy2015-至今Source: Southwest Securities: Biopharmaceuticals: Domestic Investment Faces Historical Opportunity Amid In-depth Deployment of Global Giants, curated by DeloitteFigure 1.2 Comparison of Innovative Biologics Development in China and the USInnovative biologics are undergoing constant iterati

42、on, development, and breakthroughs from the earliest first-generation products in the 1980s, such as human insulin, interferon and recombinant vaccines, to fourth-generation products introduced since 2015, including bispecific antibodies, recombinant polyclonal antibodies, and immunization therapy5

43、(Figure 1.2). Today, the development of new-generation innovative biologics, such as CGTs, is well underway.R&D projects on innovative pharmaceuticals typically have five stages (Figure 1.3): new drug discovery and development; preclinical study; clinical trial study; new drug application (NDA); and

44、 post-launch study6, 7. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), in 2015 the average development cycle of innovative medicines for ordinary biopharmaceutical companies was at least 10 years, with the clinical trial study stage lasting 6-7 years. Accelerating dev

45、elopment is therefore critical to promote global biopharma innovation.1st-generation innovative biologicsHuman insulin, hemopoietin, interferon, recombinant vaccine, etc.3rd-generation innovative biologicsHumanized/fully-humanized monoclonal antibody (McNab), antibody-drug conjugate (ADC), and antib

46、ody fragments2nd-generation innovative biologicsTNF-Fc fusion protein, granulocyte colony-stimulating factor (G-CSF), insulin analogue, growth factor, etc.1st-generation innovative biologicsHuman insulin, hemopoietin, interferon, recombined vaccine, etc.2nd-generation innovative biologicsTNF-Fc fusi

47、on protein, granulocyte colony-stimulating factor (G-CSF), insulin analogue, growth factor, etc.1980-1990ChinaThe US-2000Outlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry6With technological development and breakthroughs, the n

48、umber of innovative medicines approved globally has increased every year, except for 2020 when market-entry reviews of new drugs were delayed due to COVID-198, 9, 10, 11 (Figure 1.4). Since 2016, the number of new drugs moving from clinical late-stage period (Phase III and pre-registration) and NDA

49、approval to successful launch has steadily increased. Deloittes analysis of the number of innovative biologics authorized to market in China and the US (Figure 1.5) found it has increased in both countries, but China outpaced the US in 2019 and 202012, and is expected to retain this momentum in 2021

50、. This is mainly due to Chinas wide-ranging policies on the marketing of innovative medicines, regulatory reforms, and commercialization of innovative medicines by domestic pharmaceutical companies.Application of digital technology to biologics innovation and rising dominance of medical outsourcing

51、service providers such as CROs (contract research organizations) and CDMOs (contract development and manufacturing organizations), will accelerate the number of innovative biologics across the globe.Figure 1.3 Areas of Potential Acceleration in Each Stage of Innovative Biologics Development Post-lau

52、nch study Real world evidence study Post-launch monitoring of product efficacy Monitoring of adverse events Drug improvement study Development of combinational therapyNew drug applicationSubmitting new drug application to local drug regulatory authorities (e.g., FDA, EMA, NMA, etc.) Products with br

53、eakthrough efficacy or orphan drugs may qualify for priority reviewClinical trial study Phase I: Safety and pharmacokinetics Phase II: Inspection of efficacy and safety for patients Phase III: Long-term safety and efficacy testingPre-clinical study Absorption and metabolism Potential benefits and mo

54、de of action Optimal dose and administration method Side effects/adverse events Impact on different groups Interaction with other treatment EfficacyNew drug discovery and development Discovering all potential targets Screening out invalid targets Generating molecular formula Screening out invalid mo

55、lecular formula Further adjusting molecular formulaOutlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry7Source: Deloitte research and analyticsClinical Phase IIIPre-registrationRegisteredMarketedFigure 1.4 Global Comparison of the Number of P

56、roduct Pipelines in Later Clinical Development (2016-2021)954 1,025 1,006 1,009 1,020 1,029 197 102 220 116 214 150 199 152 246 130 267 150 1,273 1,395 1,199 1,273 1,324 1,337 Source: PharmaProjects, curated by Deloitte2001720192021Outlook on biopharma innovation trends in China | 1. Inno

57、vative breakthroughs in the global biopharma industry8Figure 1.5 The Comparison of the Number of Authorized Innovative Biologics in China and the US (2016-March 2021)720020Source: P, curated by DeloitteNumber of innovative biologics in the USNumber of innovative biol

58、ogics in China Biopharma innovation is accelerating amid digital transformationDigital transformation is a hot topic in every industry, including healthcare. The concept of internet + healthcare is becoming the mainstream in many countries. Digital applications covering online consultation, remote m

59、edical services, online pharmacy, internet hospitals, and the collection of clinical information have far-reaching influence. Digital technology has been more rapidly applied since the COVID-19 outbreak began. Many pharmaceutical multinationals and medical establishments have stepped up investment i

60、n digital technology, with a view to ensuring this can be adopted rapidly. In an interview with Deloitte, academician Shengli Yang emphasized the rapid biopharma development driven by the application of digital technology in medical science.In 2020, digital technology empowered healthcare services i

61、n multiple areas, providing better service integration, assisting in early discovery and reducing operative risk, predicting and helping to manage health demand, and optimizing clinical data quality. This in turn has delivered faster, more effective, and safer healthcare services. In addition, digit

62、al transformation can enable management reforms linked with technical improvements and increase the efficiency and effectiveness of service delivery to benefit patients and clinicians. However, given the healthcare industrys demanding requirements for compliance in service provision and clinical inf

63、ormation, and the complexity of healthcare provision, digital transformation remains in its infancy. Digitalized processes have accelerated sharply due to COVID-19, and technology has been applied more widely, especially in the way doctors and patients interact, and pharmaceutical products are distr

64、ibuted. The Deloitte Center for Health Solutions surveyed 1,800 healthcare professionals in Europe, and interviewed more than 40 medical treatment and healthcare stakeholders in Denmark, Germany, Italy, Holland, Norway, Portugal, and the UK, to understand how they view the clinical application of di

65、gital technology in biopharmaceutical industry (Figure 1.6) and major challenges of enhancing its application (Figure 1.7). Doctors tend to focus on improvements in speed and convenience when it comes to digital technology13.March 2021Outlook on biopharma innovation trends in China | 1. Innovative b

66、reakthroughs in the global biopharma industry9Figure 1.6 The Description of Digital Technology by European Medical Practitioners in Their Respective CountriesSource: Deloitte Center for Health Solutions, Digital transformation: Shaping the future of European healthcareWhen the respondents were asked

67、 about the digital progress of healthcare in their country, the most frequently mentioned positive adjectives were:FastSlowInnovativeComplexEfficientBureaucraticWhen the respondents were asked about the digital progress of healthcare in their countries, the most frequently mentioned negative adjecti

68、ves were:Figure 1.7 Three Major Challenges for European Doctors in the Empowerment of Digital Technology Application57.4%50.3%BureaucracyCost of technologyFinding right technology49.0%Source: Deloitte Center for Health Solutions, Digital transformation: Shaping the future of European healthcareDeloi

69、tte also evaluated the application of digital healthcare in Europe (Table 1.2). Electronic health records (EHRs) (81%) are the most common application of digital transformation, followed by electronic prescriptions (62%). The application of new-generation technologies such as robotics, genomics data

70、, and virtual reality accounted for only a tiny share.Outlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry10Table 1.2 Digital Technologies Used by CliniciansEurope Denmark Germany ItalyHollandNorwayPortugalThe UKEMR81%95%77%69%97%89%74%87%Ele

71、ctronic prescription62%73%13%67%97%86%96%69%Online registration54%61%38%53%67%41%66%62%Software used by clinicians51%54%44%53%70%40%55%52%Online access platform/tool (for community-level healthcare or diagnosis and treatment of hospitals)46%50%23%47%49%51%68%57%Remote healthcare43%61%30%38%59%40%45%

72、47%Scheduling37%29%52%14%46%39%23%49%Automation of drugstore and drug distribution30%38%23%25%62%34%13%35%Nursing diagnosis points26%24%31%10%43%35%9%37%Software or wearable equipment for patients22%26%21%18%35%15%17%26%Remote monitoring of key indicators22%24%22%21%24%20%13%25%Automation of other c

73、linical tasks19%26%25%9%28%15%12%22%Speech recognition tool16%16%26%8%10%26%1%20%Robotics8%8%13%8%5%6%3%8%Genomics data (storage or usage)8%14%11%6%1%5%3%10%Radio frequency identification technology (RFID)6%3%8%3%3%2%5%9%AI technology5%7%7%5%5%6%2%5%Virtual reality5%4%4%5%5%5%0%7%Source: Deloitte Ce

74、nter for Health Solutions, Digital transformation: Shaping the future of European healthcareWith digital healthcare and internet + healthcare growing rapidly, the development of biologics as well as the prescription and distribution channels have been transformed. As technologies become mature, digi

75、tal healthcare will play an increasingly important role in penetrating every link of the top-down biopharma industrial chain, not only driving application transformation on the enterprise side, but also promoting comprehensive acceleration of the entire biopharma industrial chain. Given that COVID-1

76、9 is not yet effectively controlled, it is imperative that global biopharma companies engage in digital transformation and comprehensive reforms, from R&D and manufacturing, to sales of biologics. This will lead to a growing number of commercial partnerships with technology companies.Biopharma compa

77、nies are also expected to shift their business models from the previous dominance of offline model to an integrated online-offline approach. Outlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry11Case studies of biopharma multinationals using

78、science and technology to empower innovative developmentSource: Deloitte Center for Health Solutions, Intelligent drug Discovery Powered by AIFigure 1.8 Five Considerations in Biopharma Enterprises use of AIOn 29 October 2020, Takeda and Seqster announced an agreement to improve treatment efficacy t

79、hrough better access to and understanding of patient data. Seqster provides Takeda with instant access to its secure platform for visualizing longitudinal EHRs of individual patients, genetic profiles, and health data from wearable devices. Through this collaboration, Takeda will improve capability

80、of collecting real-world evidence and applying it in new drug development plans and patient services 14.Takeda partners with medical technology company Seqster on digital solutions for patientsScience 37 employed digital technology to build decentralized operating modelMetasite, with a mobile platfo

81、rm of cloud service platformNetwork Oriented Research Assistant (NORA)at its core. This platform removes geographical restrictions and provides comprehensive, patient-centric support for comprehensive clinical trials, from patient recruitment to the completion of remote trials. While recruiting a di

82、verse range of participants, it can improve the effectiveness and speed of clinical trials. On 8 January 2019, Boehringer-Ingelheim and Science 37 reached a cooperation agreement in which Science 37s NORA system will facilitate the acceleration of Boehringer-Ingelheims clinical trials to achieve fas

83、ter development of new drugs15.Boehringer-Ingelheim and Science 37 cooperate to accelerate new drug development via digital technologyApplication of AI in the entire medical industrial chain is accelerating technical breakthroughsThe Deloitte Center for Health Solutions studied how AI is empowering

84、new drug discovery and found five major considerations in biopharma enterprises use of the technology (Figure 1.8)16.Improving access to powerful and credible data through strong partnershipsBiopharma companies effectively utilize big data via cross-sectoral cooperation, realize better new drug deve

85、lopment process, bring better product pipeline portfolios and promote the development efficiency of new drugs.AI can provide better prediction models and more flexible study, thus making the development of innovative medicines more diversified.Technological companies can access big data, and most of

86、 them have invested in the application of AI to the healthcare industry.AI experts are needed to implement the solutions and assess the cooperation with third parties.New standards are required to assess and discover milestones.Increasing diversification of drug pipeline discoveryRecognizing the dis

87、ruptive potential of tech giantsAcquiring new AI skills and talentEstablishing new KPIs and design thinkingOutlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry12123Deloitte Insight surveyed biopharma companies AI deployment and costs in 2020

88、and found three development trends (Figure 1.9)17.In 2019, more than 60% of life sciences enterprises earmarked over USD20 million for AI plans and more than half predicted an increase in AI investment in 2020The key achievements life science enterprises try to realize through AI include enhancing e

89、xisting products (28%), creating new products and services (27%), and improving process efficiency (22%). About 43% of the enterprises have used AI to make workflow more efficient.Major challenges affecting the AI execution plan include difficulty in recognizing AI application scenario projects with

90、 the highest value (30%), data challenge (28%), and the integration of AI into organization (28%).Figure 1.9 Global Biopharma Companies AI Deployment and CostsSource: Deloitte Center for Health Solutions, Intelligent drug Discovery Powered by AIWith constant breakthroughs and rapid iterations, every

91、 industry, including healthcare, is embracing science and technology to achieve innovation. AI can be deployed and used in various upstream and downstream functions of the entire value chain in the biopharma industry. Some companies in the industry have generated revenue by applying AI technology. S

92、ince the COVID-19 pandemic began, an increasing number of biopharma companies and research institutes have completed innovative breakthroughs by using AI in new drug development, production, operation and even business strategy. AI assists many areas of the biopharma industry, including medicine R&D

93、, therapy development, and gene therapy analysis. Medicine R&D, a key application, now accounts for at least 35% of the AI healthcare market18.The application of modern science and technology has resolved concerns about new drug R&D. Many pharmaceutical companies build partnerships with technology f

94、irms to develop new drugs through AI. Discovery, research and development, clinical trials, and regulatory approval for new biologics takes 12 years and costs around USD1.40 billion. This lengthy development process and high cost makes it very difficult for pharmaceutical companies to develop new me

95、dicines. Furthermore, out of every 10,000 molecular formulae that pass preliminary screening, a mere 1% eventually enter clinical trials, highlighting concerns that new drug development consumes too much time, energy, and money19. However, the use of AI in new drug development can resolve these conc

96、erns. AI can shorten the R&D cycle of ordinary new biological drugs through the analysis of data in literature and other information, and the exploration of new therapeutic targets, reducing the cost of medicine R&D.Statistics indicate that AI could save about USD28 billion a year globally in new dr

97、ug R&D costs and increase efficiency in dissemination of medical information20.In 2020, AI was widely used in the life sciences industry, and the AI utilization rate has grown constantly. In the coming 3-5 years, even more AI will be used in new drug R&D, expanding the industrial chain of biopharma

98、companies from molecular development to market launch (Figure 1.10). Outlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry13Discovery and verification of targetsMore active quality controlUtilizing AIs whole-channelSelf-repair of supply chainA

99、utomatic release of batchesIntegrating patients suggestions into product renewalSupply and demand planningOptimizing capacity and outputOptimizing communication with medical practitionersImproving patient literacyDigital data flowMolecular designHierarchy of patientsFigure 1.10 AI Application Scenar

100、ios in the Biopharma Industrial ChainSource: Deloitte Center for Health Solutions, Intelligent drug Discovery Powered by AIR&DProductionSupply chainCommerceFunction launch and risk management (network, compliance and regulations)Case studies of AI assisting with the development of innovative medicin

101、esAlphaFold2, an AI product developed by Googles DeepMind team, defeated hundreds of players in the biennial competition of Critical Assessment of Protein Structure Prediction (CASP) in 2020 and gained a score of nearly 90 in the hundred-mark system21. Its prediction result was close to the experime

102、ntal data. AlphaFold2 correctly predicted protein structure based on amino acid sequence, and the prediction accuracy matched that of cryo-electron microscope (cryo-EM), magnetic resonance imaging or X-ray crystallography, and other experimental techniques. Prof. Zhang, Yang of the University of Mic

103、higan commented that AlphaFold2 achieved a breakthrough. AlphaFold2 was trained directly from the atomic coordinates in the structure. It also proved that the issue of predicting protein structure can be addressed at the CASP competition. Prof. Xinqi Gong, from Institute of Mathematical Sciences at

104、Renmin University of China, believed that AlphaFold2 proved three successes to the world: 1) The accuracy of prediction comparable to experimental crystal structure, which will replace crystal structure; 2) Some complex and lengthy single-chain structures including some structural domains reach the

105、degree that are fully comparable to experimental structure; 3) Assisted with the analysis of X-ray crystal and cryo-EM structure, which was involved in the competition but was not obtained in experiment for years. For example, for the structure of T1058 membrane protein was successfully analyzed tog

106、ether with the original crystallographic data after Alphafold2 prediction model was used22.AlphaFold2 predicts protein structure based on amino acidOutlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry14Biopharma enterprises R&D priorities are

107、 shifting to innovation of targets and the development of new-generation therapiesNew discovery of targets for inno-vative biologics is on goingThe discovery and development of new targets have long been central to the development of innovative biologics. Developing new, effective targets and bringi

108、ng them to the market can lead to huge profits and prospects for pharmaceutical companies. According to Pharma Projects, 139 new targets were added worldwide in 2020 (Figure 1.11). This increase in 2020 was second only to Figure 1.11 Number of New Targets Discovered Each Year (2005-2020)Source: Phar

109、maProjects, Pharma R&D Annual Review 2029767339020406080000620072008200920000192020MELLODDY project executes new drug discovery through machine learning ledger orchestration. Composed of 17 partners (10 top-notch

110、 biopharma companies including Amgen, Astellas, AstraZeneca, Bayer, Boehringer-Ingelheim, GlaxoSmithKline, Janssen Pharmaceuticals, Merck, Novartis, and Servier; two European universities including University of Leuven and Budapest University of Technology and Economics; four start-ups including Owk

111、in, Iktos, Kubermatic, and Substrate Foundation; and one AI company, NVIDIA), this project is committed to effectively share the data set of 10 biopharma enterprises, especially the application of AI to new drug discovery. This cooperation model is based on the utilization of blockchain technology t

112、o improve prediction accuracy and help screen better candidate products. Launched in 2019, this three-year project is predicted to cost EUR184 million. It also received funding from partner IMI (Innovative Medicines Initiative)23.The MELLODDY (Machine Learning Ledger Orchestration for Drug Discovery

113、) projectthat in 2011 (the surge in 2011 was mainly because it was the first year when bacterial targets were included), representing a very positive outcome from the industrys perspective. Continuous growth in the number of innovative targets will also deliver a more diverse product pipeline of inn

114、ovative biologics.Outlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry15As of January 2021, erb-b2 receptor tyrosine kinase 2 (Her-2) is the most pursued innovative target in the world. It was the subject of 158 projects in 2020, with five ad

115、ded in 2021, securing its top position for a second consecutive year. It is mainly because of rising demand from a rapid increase in the number of breast cancer patients. There are several emerging popular targets, such as CD3e, which moved up four places with 53 new products, and GLP-1, which has r

116、isen five places with eight new products. However, some targets declined in its popularity, such as opioid receptor mu 1, which is mainly due to the impact of negative publicity about opioid addiction causing enterprises to retreat from opioid R&D (Table 1.3)8.Table 1.3 Top 15 Innovative Protein Tar

117、gets in the WorldSource: PharmaProjects, Pharma R&D Annual Review 20212021 (2020) RankingTargets2021 (2020) Number of drugs1 (1)erb-b2 receptor tyrosine kinase 2 Her-2 163 (158)2 (3)epidermal growth factor receptor 151 (148)3 (7)CD3e molecule 149 (116)4 (5)CD19 molecule 144 (121)5 (4)vascular endoth

118、elial growth factor A 142 (143)6 (6)CD274 molecule PD-L1 141 (116)7 (9)programmed cell death 1 PD-1 122 (111)8 (2)opioid receptor mu 1 112 (148)9 (8)nuclear receptor subfamily 3 group C member 1 glucocorticoid receptor 100 (112)10 (15)glucagon-like peptide 1 receptor GLP-1 98 (90)11 (13)cannabinoid

119、receptor 1 96 (97)12 (10)prostaglandin-endoperoxide synthase 2 COX-2 96 (107)13 (11)tumor necrosis factor 89 (101)14 (14)opioid receptor kappa 1 84 (97)15 (16)membrane spanning 4-domains A182 (78)Global R&D on innovative targets is growing constantly. Leading pharmaceutical MNCs are increasing their

120、 inputs into innovative biologics, which now account for half of their medicines in R&D (Table 1.4)8. Driven by increased inputs into the application of science and technology, particularly AI, prospects for the discovery, R&D and marketing of new targets are now more promising.Outlook on biopharma

121、innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry16Table 1.4 Top 10 Biopharma Companies by the Size of Product PipelineSource: PharmaProjects, Pharma R&D Annual Review 20212021 (2020) RankingCompanies2021 (2020) Number of drugs in pipeline2021 Number of innova

122、tive drugs1 (1)Novartis232 (222)145 (63%)2 (5)Roche227 (174)137 (60%)3 (2)Takeda199 (198)86 (43%)4 (3)Bristol Myers Squibb 177 (189)99 (56%)5 (8)Merck176 (157)91 (52%)6 (6)Pfizer170 (170)113 (66%)7 (4)Johnson & Johnson162 (182)85 (52%)8 (16)Abbvie160 (89)64 (40%)9 (7)AstraZeneca157 (164)89 (57%)10 (

123、11)Sanofi141 (137)71 (50%)CGT: The rising star in next-genera-tion biological therapyConstant breakthroughs and innovations in treatment options, from compounds to McNab biological preparations and new-generation CGTs, have provided many new treatment options for diseases once regarded as incurable.

124、Many CGT treatment products, including CAR-T therapy, stem cell therapy, and adenovirus gene therapy, have been approved in countries across the world (Table 1.5)24. They have provided new remedies for many intractable diseases, such as tumors and hereditary genopathy (Figures 1.12 and 1.13)25.Table

125、 1.5 Statistics of CGT Therapies Currently Approved in the US, Japan and EuropeCountry/regionApproving authority Number of CGT products approvedThe USFDA18JapanPMDA11European UnionEMA14Source: Pharma Boardroom, InFocus Cell & Gene TherapyOutlook on biopharma innovation trends in China | 1. Innovativ

126、e breakthroughs in the global biopharma industry17CGT therapy development also needs huge amounts of funding. Statistics shows that the FDA approved the marketing of four CGT treatment products from 2018 to 2020. Enterprises and investment institutions invested more than USD13 billion in a transform

127、ational pharmaceutical study in 2018. By 2030, 40-60 new CGT products are expected to be approved for listing24. Currently, the discovery and preclinical R&D cost of a CGT treatment product is around USD 0.9-1.1 billion, and the cost of clinical stage stands at USD 0.8-1.2 billion26.The development,

128、 production, order, and delivery of CGT therapies are at a nascent stage, and enterprises are constantly designing and building new operating models to support CGT. Deloitte Insights surveyed the development of CGT treatment in 2020, interviewing 19 cross-functional leaders involved in the CGT value

129、 chain. They made the following five points about CGT development models27: Establishment of operating model: The purpose of CGT is overcoming traditional treatment barriers to realize the development and commercialization of macromolecular and micromolecular products. Industry leaders face the dile

130、mmas of whether to establish an internal development team or outsource this function; centralized or decentralized management of development and production; and whether to invest capital in unprecedented products in the market. Any single decision can have far-reaching and irreversible consequences.

131、 When tackling these issues, enterprises consider the nature of CGT treatment and how to access capital, utilize existing external capabilities, and rapidly deliver products.Figure 1.12 Coverage Ratio of Indicators of CGT Therapies in the World; Figure 1.13 Statistics of Proportion of Clinical Stage

132、s of CGT Products in the WorldSource: Haoyue Capital, 2020 Haoyue Insights Bio-pharmaceuticals: Chinas Innovation, Global Perspective Part ITA covered by global clinical trial stage CGT products (02/2021)Clinical trial stages of global CGT products (02/2021)Others12%Tumor39%Phase I55%Phase III 9%Pha

133、se II 36%Nervous system 8%Inflammation and autoimmune disease 9%Hematology department 12%Ophthalmology department 13%Cardiovascular disease 7% Business process optimization: CGT enterprises participate in top-down and intricate product flows from the upstream to the downstream, ranging from raw mate

134、rials gathering and product tracking, to the safe delivery of CGT products to patients. Their leaders are therefore striving to find well-coordinated value chains that can synchronize all functions. Establishment of digital capabilities: CGT enterprises generally need a complex set of digital tools

135、from the outset, to follow the flow of biological materials, key patient information and funds along the patient journey. Leaders now focus on finding available tools to enhance the experience of doctors and patients, and on supporting long- term data collection to assess safety and efficacy.Outlook

136、 on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry18 Improvement of risk tolerance: Leaders in every link of the value chain emphasize the importance of flexibility, risk tolerance, and rapid decision-making capability of CGT enterprises. When mer

137、ging with or acquiring CGT companies, most leading biopharma sector participants use a ring-fencing strategy to maintain their operations and a certain degree of autonomy. Experimenting with new payment mechanisms: Although CGT treatments can have remarkable efficacy, the high cost and uncertainties

138、 involved in maintaining this efficacy have yet to be addressed. CGT enterprises and payers are considering paying CGT treatment fees via value-based contracts or alternative financing mechanisms.Given the COVID-19 pandemic is not yet under control, development of CGT treatments has slowed down, but

139、 the overall market is growing consistently.In an interview with Deloitte, Ingrid Zhang, President of Novartis Pharmaceuticals China, said the industry and the entire ecosystem should focus on and consider three questions when considering the development of CGT treatments: Typically, CGT is a one-of

140、f treatment. How can we establish a value assessment mechanism of the long-term effect? CGT not only has high standards for product quality, but also involves complex and rigid procedures. How can we ensure high-quality production, execution of treatments, and safety control? What is the profit-gene

141、rating model for CGT as a new-generation treatment method, and how can we maintain a sustainable business while benefiting patients?Deloitte expects more funds and resources to be injected into the development of CGT treatments, bringing about more innovation in biopharmaceutical industry. The respo

142、ndents in Deloittes global CGT survey are optimistic about development prospects for CGT treatments. By leveraging the competitive advantage of CGT treatments and foreseeing industry standardization, companies will embrace new opportunities. Maintaining a high level of safety while focusing on effic

143、acy and designing a special value chain for CGT treatments will be the key.Outlook on biopharma innovation trends in China | 1. Innovative breakthroughs in the global biopharma industry19Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry202. Innovatio

144、n trends in Chinas biopharma industryThe biopharma industry is highly oriented towards policy and technology. Compared with most other industries, innovative biopharma development can face many technical and capital barriers. Influenced by global biopharma innovation trends and driven by the nationa

145、l dual circulation development model, Chinas biopharma market is conforming to global development and embracing international Figure 2.1 Innovation Trends in Chinas Biopharma IndustryInnovative development of Chinas biopharma industryApplication and empowerment of innovative science and technologyIn

146、telligent empowerment of R&DNew-generation treatment optionsDigital innovation pioneerInnovative target developmentExplorations and breakthroughs in innovative R&DSource: Deloitte research and analysisInnovative biologics are increasingly valued by government agencies; R&D and market access are acce

147、lerating Thanks to the implementation of a host of regulations and policies in connection with the biopharma industry, innovative medicines are now reaching the market much more rapidly in China. Before 2015, innovation. At the same time, it is enhancing its own innovation capacity to prove the inno

148、vation power of Chinas biopharma companies to the world. Within these general tendencies, Chinas biopharma innovation can be divided into four specific trends (Figure 2.1), all of which demonstrate self-innovation breakthroughs and industrial upgrading.it took 5-7 years longer for innovative medicin

149、es to be approved in China than it did in countries with advanced healthcare systems, which was mostly due to slow approvals of clinical trials and difficulty in promoting trials28. Table 2.1 below summarizes the impact of medical reforms in recent years.Outlook on biopharma innovation trends in Chi

150、na | 2. Innovation trends in Chinas biopharma industry21Table 2.1 How Medical Reforms Accelerated the Speed to Market of Innovative Biologics in ChinaSource: Public data, Deloitte research and analysisMeasure/sImpact on accelerated time to market of innovative biopharmaceuticalsRevision to the Measu

151、res for the Administration of Drug RegistrationThe 2020 Measures for the Administration of Drug Registration defines four evaluation acceleration channels, including breakthrough treatment, preferential evaluation and approval, conditional market approval and special approval, refining application c

152、hannels for subsequent marketing of innovative medicines. Different evaluation and approval schemes are required for different product types.Shortening the evaluation and approval procedures of the clinical trial applicationIn 2018, the National Medical Products Administration issued the Announcemen

153、t on Adjusting the Evaluation and Approval Procedures for Clinical Drug Trials (No. 50 of 2018), with a view to encouraging the R&D of innovative medicines via the clinical trial application process and shortening the duration necessary for the clinical trials.Joining the International Council for H

154、armonization of Technical Requirements for Pharmaceuticals for Human Use (ICH) 31In 2017, the former State Food and Drug Administration joined the ICH and was elected as a member of the management committee in 2018. Chinas accession to the ICH has allowed its systems, procedures, and standards to be

155、 more aligned with international ones, helping enhance Chinas international competitiveness and attract many international innovative medicine companies to choose China as one of the first batch of countries to market their products.Increasing the number of clinical trial institutes and centers and

156、practicing register management 31The appraisal of clinical trial conditions and capabilities is included into the rating of medical establishments, which aims to encourage set up of a higher number of clinical trial departments to facilitate more trials, promote the qualification and registration ma

157、nagement system for clinical trial institutes, and to make medical establishments more capable and interested in getting involved in clinical trials. The number of clinical trial centers rose from 375 in 2015 to 1,072 in 2019.Revision of the Patent Law safeguards patents and extends the protection p

158、eriod of patentsThe latest version of the Patent Law was passed on 17 October 2020 and implemented as of 1 June 2021. A compensation system for the term of patents was proposed at the legislative level for the first time. It offers patent term compensation to innovative medicines to enhance Chinas p

159、osition as one of the first batch of countries to market innovative medicines, and spur local innovative medicine companies to invest more in R&D to promote local innovation31.Evaluation and approval capacity strengthened to facilitate scientific supervisionThe Center for Drug Evaluation increased i

160、ts number of evaluation staff from 150 in 2015 to 700 in 2018 and established an assessment expert panel composed of 626 external experts. It promotes the release and formation of the evaluation and approval system under the principles of scientific supervision, justice and equity and openness and t

161、ransparency and beefs up support for innovative medicines.Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry22Figure 2.2 Size of Drug CRO Market in China and Prediction (2015-2022E, RMB billion)Figure 2.3 Proportion of All Types of Preclinical CRO and

162、 Comprehensive CRO Enterprises in China - Others, 25%Comprehensive, 5%Animal model, 12%Pharmacology/toxicology/pharmacokinetics, 18%Chemical synthesis, 33%Drug screening, 7%Source: AskCI.com, curated by DeloitteSource: AskCI.comProportion of all types of preclinical CRO and comprehensive CRO enterpr

163、ises in ChinaOutlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry2337.920208016044.655.967.881.597.8117.3140.2Chinas CRO industry has been growing since 2015, and the market is expected to exceed RMB100 billion in 202129 (Figure 2.2). Previou

164、sly, users of CRO and CDMO services in Chinas pharmaceutical industry were mainly enterprises developing generic drugs and biosimilars (Figure 2.3). However, with government agencies emphasis on promoting innovative medicines, the market for generic drugs and biosimilars has declined and new innovat

165、ive medicine companies are constantly emerging.A growing number of innovative medicine start-ups are choosing CRO and CDMO services to make up for a lack of in-house personnel and resources. CRO demand and the CRO penetration are expected to keep growing30. At the same time, more multinational pharm

166、aceutical companies are shifting their demand for CRO and CDMO services to China because Chinas CRO and CDMO enterprises have cost advantages over those in Europe and the US.With Chinas supervisory standards now benchmarked against international standards and domestic quality requirements for innova

167、tive medicines having risen, requirements for the quality of CRO and CDMO services have elevated accordingly. CRO and CDMO services are likely to meet the development needs of Chinas innovative medicine start-ups in the short run. However, amid the ongoing push for innovative medicines development,

168、Chinas pharmaceutical companies have built up their in-house capacity for innovation. It will be challenging for CRO and CDMO companies to continue to meet Chinas innovative medicine companies growing demand for hardware and services. If this demand cannot be met by CROs and CDMOs, Chinas innovative

169、 medicine companies could meet it through M&A or by assembling their own clinical teams.China becoming a digital transformation powerhouse for biopharma enterprisesDigital transformation, already a popular trend in China and worldwide, has accelerated since the COVID-19 outbreak began. In addition t

170、o being applied in early-stage biologics R&D, digital technology has been used in multiple areas of healthcare, including supply chains, doctor and patient education, and data collection, granted by Chinas rapid technological development. One-package services based on digital technology have been ma

171、de available over time. In an interview with Deloitte on Chinas biopharma industry, experts said that digital healthcare is a megatrend and a positive accelerator for innovative development of Chinas biopharma industry.At the beginning of 2021, Deloitte surveyed 150 respondents from biopharma compan

172、ies based out of China who shared their insights on development prospects for the life sciences industry, including their opinions and expectations for digital development. Three-quarter of the enterprises surveyed are increasing or willing to increase investment in the development of online channel

173、s31. Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry24Figure 2.4 The Willingness to Invest in New Digital ChannelsAre you willing to increase investment in new digital channels?Figure 2.5 Investment Preference in New Digital ChannelsWhat is your di

174、gital channel investment preference?YesWill set up online business channels on their ownWill partner with third parties in such investmentsNoIncluding self-establishment and partnerships with third partiesSource: Deloitte, Survey Findings of the Life Sciences and Healthcare Industries in China in 20

175、21: Status Quo and OutlookSource: Deloitte, Survey Findings of the Life Sciences and Healthcare Industries in China in 2021: Status Quo and OutlookPrivate and state-owned enterprises are less willing to increase their investment in online channels (Figure 2.4). Of the enterprises who are willing to

176、increase investment in new digital channels, large enterprises prefer to invest in self-establishment and partnerships with third parties. In contrast, domestic enterprises would rather develop their own online channels, and foreign-funded enterprises prefer a cooperative development model (Figure 2

177、.5).75%87%68%65%85%25%14%32%35%15%17%16%20%8%24%15%2%26%15%12%68%82%54%77%64%全部大型企业国有企业私营企业外商独资企业AllLarge companiesPrivate enterprisesState-owned EnterprisesWholly foreign-owned enterprisesAllLarge companiesPrivate enterprisesState-owned EnterprisesWholly foreign-owned enterprisesOutlook on biopharm

178、a innovation trends in China | 2. Innovation trends in Chinas biopharma industry25Deloitte also learned that among companies other than private enterprises, nearly 50% of respondents said their companies have earmarked larger-than-expected resources for IT and data compliance frameworks. Meanwhile,

179、most large enterprises and wholly foreign-owned enterprises will allocate more resources to data, IT security and compliance in 2021, to address Chinas rapid growth in digital healthcare. Clinical data compliance has long been a pain point in the digital transformations of biopharma companies. The c

180、ollection, management and utilization of patient health, diagnosis and treatment data are subject to both information safety and medical safety risks. This challenges enterprises, medical establishments, and regulatory authorities to establish specifically targeted risk control plans to safeguard th

181、e privacy of patients while ensuring the legal and reasonable use of patient data. In the context of big data connectivity, they also need to balance information security guarantees and open use32. Figure 2.6 Investment Related to Chinas Data and Security Environment30%40%42%22%44%43%54%37%33%59%28%

182、29%11%17%46%38%25%37%50%21%Will allocate more resources to data and IT security in 2021 to develop business in ChinaNot applicableHave allocated larger-than-expected resources to manage IT and data compliance frameworkDeploy localized IT and data solutions different from the global systemSource: Del

183、oitte, Survey Findings of the Life Sciences and Healthcare Industries in China in 2021: Status Quo and OutlookLocal and multinational biopharma companies in China are paying more attention and scaling up digital transformation. They are increasingly willing to use digital innovation and apply it to

184、a wider range of fields (Figure 2.7). They are also expanding their investment and application scenarios for digital technology in China. Dr. Ruilin Song, executive chairman of the China Pharmaceutical Innovation and Research Development Association, and Ingrid Zhang, President of Novartis Pharmaceu

185、ticals China, said the empowerment of digital technology in Chinas biopharma industry is expected to develop further, stimulating more advanced innovation. Kenneth Sun, managing In Deloittes survey, 43% of respondents (more than 50% of them are from large enterprises and wholly foreign-owned enterpr

186、ises) said their companies will allocate more resources to data and IT security in 2021 than in 2020 to support the digital transformation of their businesses in China (Figure 2.6)31.AllLarge companiesPrivate enterprisesState-owned EnterprisesWholly foreign-owned enterprisesdirector of the Medical I

187、ndustry Team in the Investment Banking Division of Morgan Stanley Asia-Pacific, believes Chinas digital technology adoption promises to drive its biopharma industry to catch up rapidly with European and US counterparts, enabling China to become a global power in pharmaceuticals.Outlook on biopharma

188、innovation trends in China | 2. Innovation trends in Chinas biopharma industry26Figure 2.7 Digital Application Scenarios in Chinas Biopharma IndustrySource: Public data, research and curated by DeloitteDigitalization speeds up innovative R&D AI empowers new drug discovery by intelligent screening of

189、 scientific literature research and protein model predictionIntelligent management of clinical trial Precise monitoring of clinical trial data Intelligent management and analysis of clinical trial dataPersonalized digital service Big data is used to refine service types based on patients demands and

190、 provide more precise assistance plansDigital transformation of production process Digital management of production supply chain Intelligent detection of production line and stabilization of manufacturing qualityDigital marketing Online medication consultation service Online academic seminars to cov

191、er more medical expertsElectronic prescription Remote healthcare and issuance of electronic prescription in online healthcare Increasing the sales volume and expanding the sales channel of drugsInnovation breakthroughs as AI empowers the entire biopharma industrial chainAI, a key link in the digital

192、 transformation of the biopharmaceutical industry, is extensively applied in biopharma in China, facilitating the innovative development of biologics from product R&D and screening, to modes of patient interaction. However, in international terms, the application of AI in Chinas biopharma industry i

193、s still nascent. As pharmaceutical and tech giants race to enact their business plans, Chinas investment market for AI + biological technology is changing dynamically. Its early industry development stage boasts huge market potential. Domestic companies need to build up their ability to engage in te

194、chnical cooperation with pharmaceutical companies to constantly accumulate data and develop their business models. In February 2020, the Ministry of Industry and Information Technology (MIIT) released the Initiative on Fully Utilizing the Empowerment Effectiveness of AI to Jointly Fight against COVI

195、D-19, calling for the empowerment of AI to be used to promote technical R&D and facilitate production. R&D breakthroughs in biopharma, including main virus gene sequencing, vaccine and drug research and development, and protein screening. In doing so, drug R&D could be accelerated even under the imp

196、act of COVID-1933.Policy changesThe Made in China 2025 strategy, which was issued in 2015, contained the earliest policy support for AIs use in healthcare and proposed intelligent manufacturing for the first time. In the 13th Five-year Plan adopted at the 4th Session of the 12th National Peoples Con

197、gress in March 2016, the concept of AI was included in key projects. In May 2016, the National Development and Reform Commission, Ministry of Science and Technology, MIIT and the Office of the Central Cyberspace Affairs Commission jointly issued the Three-year Action Plan for internet + AI, proposin

198、g to promote comprehensive development of AI in six areas: capital, standardization, intellectual property protection, talent development, and international cooperation. This was the first well-articulated support policy for the development of AI applications. The development of AI-powered healthcar

199、e is chiefly driven by top-down policy. The priorities include using AI to accelerate drug R&D, intelligentization of drug supervision, and informatization of medication monitoring data (Figure 2.8).Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry27

200、Figure 2.8 The Evolution of Policy for the AI-powered Innovative Development Relating to Chinas Biopharma IndustryMay 2016Three-year Action Plan for Internet+ AI (F. G. H. J. 2016 No. 1078)Issued by the National Development and Reform Commission, the Ministry of Science and Technology, the MIIT and

201、the Office of the Central Cyberspace Affairs Commission, this Action Plan supports and promotes the large-scale application of AI in healthcare and other fields.July 2017 Plan for the Development of New-generation AI (G. F. 2017 No. 35)Issued by the State Council, this Plan promotes AI-powered treat

202、ment and establishes a rapid and precise intelligent healthcare system. It also supports research and new drug R&D based on AI and promotes the intelligentization of pharmaceutical supervision.March 2019 Guiding Opinions on Promoting the Deep Integration of AI and Real EconomyIssued by the Commissio

203、n on Comprehensively Deepening Reform of the CPC Central Committee, these Opinions promote the integration and openness of medical data and support related enterprises in developing application scenarios and AI services with AI companies.June 2020 Annual Legislation Work Plan of the Standing Committ

204、ee of the National Peoples Congress in 2020Issued by the 58th Chairman Meeting of the Standing Committee of the 13th National Peoples Congress, this Work Plan emphasizes studies on legal issues in AI, blockchain, gene editing and other new technologies and fields. It also aims to make theoretical st

205、udies normal and institutionalized.June 2016 Guiding Opinions on Promoting and Regulating the Application and Development of Big Data in Health and Medical Care (G. B. F. 2106 No. 47)Issued by the State Council, these Opinions support AI technology for healthcare, improving the level of equipment pr

206、oduction, and promoting the large-scale application in the industrial upgrading of intelligent healthcare equipment.April 2018 National Standard and Specification for the Information-based Development of Hospitals (For trial implementation)(G. W. B. G. H. F. 2018 No. 4)Issued by the National Health

207、Commission, this Standard promotes AI prediction to achieve auxiliary diagnosis with medical imaging, auxiliary clinical diagnosis and treatment, intelligent health management, intelligent hospital management and virtual assistants.August 2019 National Guidelines on the Development of Open and Innov

208、ative Platform for New-generation AIIssued by the State Council, these Guidelines encourage leading companies in the AI segment to establish and export open-source and open platforms, and the cultivation of industrial companies.200192020Source: The State Council, 36Kr, public data, curate

209、d by DeloitteThe application of AI in Chinas biopharma industryAI can meet the comprehensive application demands of R&D on innovative biologics, from drug discovery, preclinical study and clinical trial, to marketing examination and approval. It can also cover the entire industrial chain, including

210、target discovery, pharmacology assessment, preparatory R&D, clinical trial recruitment, trial optimization, and production. Nonetheless, the application of AI by Chinas biopharma companies remains limited, as they primarily focus on medical imaging. In Europe and the US, AI is more common than it is

211、 in China for drug R&D. However, over the recent years, more AI companies and funds have been invested in new drug R&D. Moreover, a growing cohort of overseas talent returning to China with technical knowledge are set to inject new impetus into AI-driven R&D for innovative medicines. In an interview

212、 with Deloitte, Richard Mao, managing director of investment group Orchid Asia, emphasized that AI technologies allow biopharma companies to develop new drugs more quickly and efficiently. According to 36Kr and the China Academy of Information and Communications Technology, more local biopharma comp

213、anies will form partnerships with AI, with a view to advancing R&D on innovative medicines18 (Figure 2.9).Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry28Figure 2.9 Cooperative Models between AI Companies and Biopharma Companies in ChinaAI compani

214、es Technology providers that deliver different services based on R&D of innovative medicines Provide technology systems at the early stage and take charge of system maintenance, data collection, and analysis at the later stage Some AI companies establish big data platforms with research institutes a

215、nd sell the databases to biopharma companies on a commercial basisBiopharma companies Mainly large pharmaceutical companies with certain capital strength and more R&D experience Some pharmaceutical companies choose to set up their own AI teams for R&D Currently, all the top 10 global biopharma compa

216、nies have adopted AISource: Deloitte research and analysisAICase studies of China-based AI developers assisting with the development of innovative medicinesInfinite Intelligence Pharma, designer of the PharmMind AI drug R&D system, announced in February 2021 that it received a Pre-A round of investm

217、ent from Livzon Pharmaceutical. Before this, Infinite Intelligence Pharma had gained angel investments from CASSTAR and WI Harper Group in August 201934. Based on AI drug development (AIDD) technology and computer-assisted drug design (CADD) technology, PharmMind covers target discovery to preclinic

218、al study, assisting with new drug development. PharmMinds functions include simulation of molecular discovery, molecular optimization, molecular search, molecular assessment, virtual screening, retrosynthetic analysis, interactive molecular design, and molecular data mining.In July 2020, Tencent AI

219、Lab released the first AI-powered R&D platform, iDrug, at the Cloud Summit of the 2020 World AI Conference35. iDrugs functions include protein structure prediction, virtual screening, molecular production, ADMET prediction, and planning of synthesis routes, providing whole-process services up to pre

220、clinical studies (Figure 2.10). On 17 November 2020, Tencent AI Lab analyzed Type II 5a reductase (SRD5A2) using its self-developed method of improving the prediction accuracy of protein structures. The analysis revealed the inhibition mechanism of finasteride, the pharmaceutical molecule for treati

221、ng alopecia and benign prostatic hyperplasia. This advance is of great help for studies on the pathological mechanisms of related diseases and drug optimization. The project was also covered in Nature Communication, the sub-journal of Nature36.PharmMindiDrugOutlook on biopharma innovation trends in

222、China | 2. Innovation trends in Chinas biopharma industry29Figure 2.10 The Framework of iDrug Graph neural network, self-supervised learning, transfer learning, reinforced learning, etc.Database creationInput/trainingDesign/predictionData accumulationData cleansingStandardized managementNew data gen

223、erationLiterature, database and other open data set, experimental data, etc.Verification/iterationDrug discoveryAI algorithm developmentCloud computing platform(Pharmaceutical company) experimental platformSource: 36Kr, Tencent Releases the First AI Drug Discovery Platform, iDrug, to Facilitate the

224、R&D of medicines for COVID-19New-generation therapy: China, a burgeoning market for CGT The Yescarta new drug application, a CAR-T product introduced by Fosun Kite of Kite Pharma, has been officially accepted by the National Medical Products Administration and could become the first CAR-T product ap

225、proved in China37. As a country with many patients suitable for CGT, Chinas CGT enterprises have huge commercialization potential. The number of CGT clinical trials conducted in China is second only to the US38 (Figure 2.11).In 2020, Deloitte studied the development of CGT treatments in Chinas bioph

226、arma market, concluding that there are three critical factors for the promotion of CGT development in China39: Clear regulatory rules and industrial quality standard specifications: Chinas CGT regulatory system has seen an explosive growth after 2016. Such trend continued into 2019, when the Nationa

227、l Health Commission and the National Medical Products Administration released a host of regulatory policies on the clinical research and application of CGT and made clear the responsibilities of different institutions. In 2020, authorities released guiding principles for cell therapy and gene therap

228、y, including the Technical Guidelines for the Clinical Trial of Immune Cell Treatment Products (Exposure Draft), the Technical Guidelines for the Pharmaceutical Research and Appraisal of Gene Treatment Products (Exposure Draft), and the Technical Guidelines for the Clinical Trial of Humanized Stem C

229、ell and Derivative Cell Treatment Products (Exposure Draft). Further standardized regulations on CGT product R&D have also been rolled out. The number of global multi-center clinical researches, including China, is on the rise; Chinas clinical research infrastructure increasingly sophisticated over

230、time: Statistics indicate that by the end of April 2021, China had conducted 1,325 CGT-related clinical trials (including stem cell, CAR-T, TCR-T, NKT, TAA/TSA, gene editing and other CGT) and is becoming one of the worlds leading countries for the registration of clinical CGT trials. Built on this,

231、 China has access to world-class data on CGT treatment development and has accumulated profound CGT development knowledge and hands-on experience. Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry30Figure 2.11 Statistics about CGT Treatment-related C

232、linical Trials in the World by April 202170%9%0%5%8%1%6%The US4,22260%9%0%3%12%0%16%Japan13983%3%2%4%0%8%Middle East47767%13%1%5%5%0%10%Southeast Asia19786%5%1%8%0%2%Russia13347%34%1%7%6%1%4%China1,32574%5%0%2%9%0%10%Europe3,868Source: Clinicaltrials.gov.Note: Gene editing includes CRISPR, TALEN and

233、 ZFN; other CGT treatment includes iPSC, T, TIL and RNAiDue to these three main driving forces, funds are now flooding Chinas CGT segment, and the number and diversity of domestic CGT products surged in 2020. Statistics indicate that trial applications for 20 innovative domestic CGT products were su

234、bmitted in 2020. As of 29 March 2021, five clinical trial applications have been approved (Table 2.1). Altogether there are 16 cell treatment products: immune cell (12) and stem cell (4), and four gene treatment products, gene editing (1) and oncolytic virus (3) 41, 42.Canada47066%13%0%3%11%1%6%Aust

235、ralia24875%8%0%5%2%9%Stem cellTCR-TGene editingCAR-TTAA/TSANKTOther CGT treatment Cross-sectoral cooperation is pushing Chinas CGT treatments towards highly innovative CGT intellectual property rights, facilitating the rapid growth of the CGT ecosystem in China: Driven by the previous two points, Ch

236、inas local biopharma companies are witnessing a CGT boom, with more than 3,100 CGT-related patents now registered in the country40. In addition, many local biopharma companies are partnering with overseas CGT companies to obtain development rights, such as Fosun Kite/Kite Pharma and WuXi AppTec/Juno

237、. Both models mean CGT treatment development is thriving, and there are expected to be more cooperation projects, promoting CGT commercialization and industrialization in China.Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry31Table 2.2 Domestic CGT

238、 Products with Clinical Trial Applications Submitted in 2020Segments Drug name Company name Status of acceptanceImmune cellAutologous T-cell Injection Modified by Target CD30 Chimeric Antigen Receptor GeneWuhan Bio-Raid BiotechnologyApproval issuedpCAR-19B Autologous Cell Feedback PreparationChongqi

239、ng Precision BiotechApproval issuedT-cell Injection with CBM.BCMA Chimeric Antigen ReceptorCellular Biomedicine Group (CBMG)Under review (at the Center for Drug Evaluation)CTO41 Autologous CART Cell InjectionShanghai Carsgen TherapeuticsApproval issuedAutologous CD8+T Lymphocyte PreparationJiangxi X

240、idier BiotechnologyUnder review (at the Center for Drug Evaluation)T-cell Injection with GB5005 Chimeric Antigen ReceptorShanghai Genbase BiotechnologyUnder review (at the Center for Drug Evaluation)Anti-HIV-1 T-cell Injection with Chimeric Antigen ReceptorShenzhen City of Regeneration BiologyUnder

241、review (at the Center for Drug Evaluation)Autologous T-cell Injection Activated by Dendritic Cell of Complex Antigen Sensitization for Non-small Cell Lung CancerShenzhen Immuclin Biomed, Inc.Under review (at the Center for Drug Evaluation)C-4-29 Cell PreparationChongqing Precision BiotechUnder revie

242、w (at the Center for Drug Evaluation)Antihuman CD19-CD22 T-cell InjectionShanghai Hrain BiotechnologyUnder review (at the Center for Drug Evaluation)LY007 Cell InjectionShanghai Longyao BiotechnologyUnder review (at the Center for Drug Evaluation)Autologous Memory Lymphocyte InjectionNewishes Techno

243、logyUnder review (at the Center for Drug Evaluation)Stem cellHuman Umbilical Cord Mesenchymal Stem Cell InjectionBeijing Baylx, Inc.Approval issuedM-021001 Cell InjectionBeijing Zephyrm Biotechnologies/Institute of Zoology, Chinese Academy of SciencesUnder review (at the Center for Drug Evaluation)H

244、uman Umbilical Cord Mesenchymal Stem Cell for Injection Shenzhen Beike BiotechnologyUnder review (at the Center for Drug Evaluation)Mesenchymal Stem Cell for Injection (Umbilical Cord) Tianjin Amcellgene EngineeringUnder review (at the Center for Drug Evaluation)Gene editingAutologous CD34+ Hematopo

245、ietic Stem Ancestral Cell Injection of BCL11A Erythroid Hadron Modified by CRISPR/Cas9 GeneGuangzhou EdiGene MedTechUnder review (at the Center for Drug Evaluation)Oncolytic virusRecombinant Human GM-CSF Oncolytic Type-II Herpesvirus Hominis (OH2) Injection (Vero Cell)Wuhan Binhui BiopharmUnder revi

246、ew (at the Center for Drug Evaluation)Recombinant Human IL12/15-PDL1B Oncolytic Type-I Herpesvirus Hominis Virus Injection (Vero Cell)Sinopharm Funuojian BiotechnologyApproval issuedRecombinant Human nsIL12 Oncolytic Adenovirus Injection Beijing BiotttUnder review (at the Center for Drug Evaluation)

247、Source: H, Y, curated by DeloitteOutlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry32Against this backdrop of rapid development, Chinas CGT segment faces the dilemma of who should be paying for the expensive CGT treatments. Kenneth Sun from, Morgan St

248、anley Asia-Pacific notes that approved cell treatment products are expensive and very few patients in China can afford them. Furthermore, commercial health insurance is not widespread in China, and it is unclear if CGT therapy is covered by national medical insurance. Deloitte suggests that innovati

249、ve biopharma companies with CGTs in China should consider diversified and innovative payment models to ensure patients have sufficient sources of payment when receiving CGT treatment. This is the only way to ensure a steady and long-term development of CGT products39.Raising CGT treatment output whi

250、le ensuring quality is another challenge. The production of CGT treatments is highly sensitive to environmental factors, including temperature, humidity, and CO2 concentration. The production quality requirements for CGT treatments are higher than those for traditional pharmaceutical chemicals and b

251、iological preparations. One of the dilemmas that global CGT development enterprises face is a stable and sufficient carrier supply from small-scale to large-scale commercialization, and one possible solution is to utilize CDMO services. Earlier in this report, we discussed the accelerated marketing

252、of biopharma products driven by CRO and CDMO services. CDMOs, equipped with sophisticated technology and professionals, have become the carrier suppliers of CGT treatments, especially gene products. Alongside the rapid growth of CGT treatments, filling gaps in the viral vector manufacturing will als

253、o become a business growth point for CDMOs. With a growing proportion of CGT product companies using CDMOs to prepare for commercialization, CDMOs will play a vital role in the marketing of CGT products. While using CDMOs, some enterprises are also making substantial investments in automatic process

254、es to lower cell production cost. CDMO services and automatic production are vital solutions to resolve bottlenecks in CGT treatment production43, 44.Apart from participating in the burgeoning international market for CGT products, China is playing a critical role in their development and commercial

255、ization. The main roles of Chinas CGT enterprises in international CGT development are: Developing and commercializing self-developed CGT products in conjunction with pharma MNCs. Many CGT enterprises in China with solid R&D capacity have developed CGT products with commercialization potential that

256、have entered clinical trials. Several pharmaceutical MNCs have entered strategic partnerships with these local CGT enterprises to expand their product deployment. Examples include the strategic cooperation on CAR-T product development of Nanjing Legend Biotech and Johnson & Johnson. Together, they a

257、re developing and commercializing LCAR-B38M, a CAR-T product for multiple myeloma created by Nanjing Legend Biotech. Johnson & Johnson will bear the costs of and gain profits from LCAR-B38M sales everywhere except China and will pay some of the costs and receive proportional profits45 in China. Thes

258、e partnerships highlight the rise of Chinas local CGT enterprises to international prominence. China and multinational pharmaceutical companies jointly developing and commercializing MNCs CGT products. Chinese pharmaceutical companies without self-developed CGT products partner with a pharmaceutical

259、 multinational company to develop and commercialize the MNCs CGT products, and strengthen their CGT R&D and production capacity, while supporting global development. The strategic cooperation between CBMG and Novartis is one example. Under this agreement signed in September 2018, CBMG became respons

260、ible for the production and supply of Kymriah (Novartis CAR-T product) in China, and Novartis obtained a stake of around 9% in CBMG46. Helping CGT products available internationally to enter the Chinese market. Chinese patients have unique health profiles, representing greater market potential for C

261、GT products available on the international market, such as treatments for gastric and intestinal cancer and other solid tumors and hereditary diseases commonly observed in Asian communities. Many diseases without curative therapies are potentially lucrative markets for international CGT enterprises.

262、 However, due to strict regulations and restrictions on market access, data transfer and data privacy, overseas CGT companies often prefer to avoid these barriers by working with Chinese pharmaceutical companies. Chinese pharmaceutical firms can leverage this opportunity to obtain world-leading CGT

263、R&D and production technology, creating win-win scenarios39.Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry33Innovation and implementation capabilities are shifting from MNCs to local enterprises Fueled by the Chinese government and drug testing ag

264、encies, Chinas biopharma companies have made great progress in innovation and delivered superior performance since the COVID-19 outbreak began. The development and roll-out of COVID-19 vaccines demonstrate the progress of Chinas biopharma companies innovation.The first COVID-19 vaccine in the world

265、to gain regulatory approval was the inactivated vaccine from Sinopharms CNBG Beijing Institute of Biological Products. The rapid availability of vaccines was not only helping to bring COVID-19 under control, but also demonstrated the R&D strength of Chinas biopharma companies. In addition to Sinopha

266、rm vaccine, several domestic COVID-19 vaccines have been approved as of March 2021 and some have entered clinical trials with the potential to hit the market soon (Figure 2.12)38. Of Chinas domestic COVID-19 vaccines, four have been approved and one has been authorized for emergency use. Of the 12 C

267、OVID-19 vaccines in use worldwide, the largest proportion originated from China (Table 2.2). ProductsDeveloperVaccine typeCompaniesExpected annual output (doses)PreclinicalPhase IPhase IIPhase IIIAuthorized for emergency useGaining the approval for marketCOVID-19 inactivated vaccineCNBG Beijing Inst

268、itute of SinopharmInactivated300 million 1CoronaVacSinovacInactivated300 million Adenovirus-vectored COVID-19 vaccineCanSino/Academy of Military SciencesVirus vector100-200 million 2COVID-19 inactivated vaccineCNBG Wuhan Institute of SinopharmInactivated300 million 1Recombinant protein subunit vacci

269、ne for COVID-19 (CHO cell)Anhui Zhifei/Institute of Microbiology, Chinese Academy of SciencesRecombinant protein300 millionCOVID-19 inactivated vaccineChinese Academy of Medical SciencesInactivatedNot made publicCOVID-19 mRNA vaccine (ARCoV)Yunnan Walvax/Abogen Bio/Academy of Military Medical Scienc

270、es, Academy of Military SciencesmRNANot made publicRecombinant COVID-19 vaccine (Sf9 cell)Huaxi HospitalRecombinant proteinNot made publicCOVID-19 inactivated vaccine (Vero cell)Kangtai Biological ProductsInactivatedNot made publicRecombinant protein subunit vaccine for COVID-19ZhongyiankeRecombinan

271、t proteinNot made publicL lentiviral vector modified DC vaccine (V-SMENP-DC)Shenzhen Geno-immune Medical InstituteVirus vectorNot made publicS-tripolymer recombinant protein subunit vaccine for COVID-19 (SCB-2019)Clover Biopharmaceuticals/GSK/DynavaxRecombinant proteinNot made publicPathogen specifi

272、c aAPC vaccineShenzhen Geno-immune Medical InstituteVirus vectorNot made publicNasal spray influenza virus vector vaccine for COVID-19 (DelNS1-2019- nCoV-RBD-OPT1)Beijing WantaiVirus vectorNot made publicFigure 2.12 The Overview of Home-made Vaccines under Development by March 2021Approved on 31 Dec

273、ember 2020Approved on 25 February 2021Approved on 5 February 2021Approved on 25 February 2021Authorized for emergency use on 24 March 2021Phase III underwayPhase II underwayPhase II underwayPhase II underwayPhase II underwayPhase I/II underwayPhase I completedPhase I underwayPhase I underwaySource:

274、Clinicaltrials.gov, public data, Deloitte research and analysisNote: 1 The output of Sinopharm is the total output from Beijing and Shanghai. Sinopharm plans to expand output to 1 billion doses; 2 CanSino plans to expand its output to 500-600 million doses by the end of 2021.Outlook on biopharma inn

275、ovation trends in China | 2. Innovation trends in Chinas biopharma industry3446%4%6%2%3%14%8%3%13%1%46%4%5%2%3%14%9%3%13%1%Chinas status in innovative biologics R&D has been rising, thanks to the reform and improvement of a host of healthcare policies and strong support from government agencies. Bio

276、pharma companies in China have injected substantial resources into innovative R&D, which has paid off in recent years. This has elevated the position of China in global biologics R&D and strengthened innovation in Chinas biopharma industry8 (Figure 2.13).Table 2.3 COVID-19 Vaccines Approved or Autho

277、rized for Emergency UseFigure 2.13 Geographical Distribution of New Drug Development Companies (2020-2021)20202021Source: Public Data, curated by DeloitteSource: PharmaProjects, Pharma R&D Annual Review 2021CountriesVaccinesVaccine developer/sChinaCOVID-19 inactivated vaccineCNBG Beijing Institute o

278、f SinopharmCoronaVacSinovacAdenovirus-vectored COVID-19 vaccineCanSino/Academy of Military SciencesCOVID-19 inactivated vaccineCNBG Wuhan Institute of SinopharmRecombinant protein subunit vaccine for COVID-19 (CHO cell)Anhui Zhifei/Institute of Microbiology, Chinese Academy of SciencesUSModerna COVI

279、D-19 VaccineModernaJanssen COVID-19 VaccineJanssenUS/GermanyPfizer-BioNTech COVID-19 VaccinePfizer/BioNTechRussiaSputnik VGamaleya Research InstituteVector Institute COVID-19 VaccineVector InstituteUKCOVAXAstraZeneca/OxfordIndiaCovaxinBharat BiotechThe USThe UKOther European countriesOther Asia-Paci

280、fic countriesCanadaFranceJapanGermanyChinaAll other countriesOutlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry35Drug R&D innovation in China is homogenous, with only a small number of originated targets. Of the 37 new Type-I drugs to hit the market i

281、n China from 2017 to 2020, only three had an original mechanism of action, and of the 401 targets in development worldwide, only 80 (around 20%) are being developed in China. Of the 10 most-common targets, 47% of drugs in development are in China, compared to just 22% for other regions. This is main

282、ly due to an insufficient accumulation of original creativity and investors viewing the risk-return of capital invested as unattractive. Generally, Chinese institutional investors focus more on the payback period than overseas institutions do, and they favor investing in fields with global success s

283、tories rather than new areas. However, with long-term stable investment and focus on innovation in the domestic market, innovation should become less homogenous28. Ingrid Zhang, from Novartis Pharmaceuticals China says the homogeneity of innovation in China was unavoidable during the biopharma indus

284、trys rapid development phase, when huge amounts of capital were being pumped into local companies, but the sector must now prove its ability and accelerate the demonstration of R&D results.As innovative development in China advances and technologies are accumulated, local biopharma companies are set

285、 to shift from matching their global peers to outperforming them. They will invest more in R&D to enter a development stage that places more emphasis on R&D of original innovations.Figure 2.14 Statistics about the Number of Drugs Released Corresponding to Nine Hot Spots in the World in 2020 (unit: n

286、umber)Source: P, public data, curated by DeloitteChinaRest of the worldIn 2020, there were nine main targets undergoing R&D development in China: PD1/L1, GLP-1R, BTK, JAK, CDK4/6, IL- 17A, PARP, PCSK9, and CGRP/CGRPR 47 (Figure 2.14; Table 2.3) As of March 2021, 30 products for these nine targets ar

287、e launched in China, compared to 53 products globally. Among the 30 products launched in China, only 10 were innovative products independently developed by local biopharma companies. These 10 innovative products only covered four of the targets, highlighting the homogeneity of local biopharma compan

288、ies in selecting R&D on innovative products.Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry36Table 2.4 Products Released in China Corresponding to the Nine Main TargetsSource: P, public data, curated by Deloitte. Note: Blue text indicates innovativ

289、e biologics from Chinas.TargetGeneric NameBrand NameDeveloper/sStatus in ChinaPD1/L1DurvalumabImfinziAstraZenecaLaunched Pembrolizumab KeytrudaMerckLaunchedIpilimumabOpdivoBristol Myers SquibbLaunchedAtezolizumabTecentriqRocheLaunchedToripalimabTuoyiJunshi Biosciences LaunchedSintilimabDaboshuInnove

290、nt BiologicsLaunchedTislelizumabBaizeanBeiGeneLaunchedCamrelizumabAilituoHengrui MedicineLaunchedGLP-1RExenatideBaimidaAstraZenecaLaunchedLiraglutideVictozaNovo NordiskLaunchedLixisenatideLyxumiaSanofiLaunchedExenatide microsphereBydureonAstraZenecaLaunchedDulaglutideTrulicity Eli LillyLaunchedBeina

291、glutide YishengtaiBenemae PharmaceuticalLaunchedLoxenatideFulaimeiHansohLaunchedBTKIbrutinibImbruvicaJohnson & Johnson/AbbVieLaunchedZanubrutinibBrukinsaBeiGeneLaunchedOrelabrutinibYinuokaiInnocare PharmaLaunchedJAKRuxolitinibJakafi/JakaviNovartis/IncyteLaunchedTofacitinibXeljanzPfizerLaunchedBarici

292、tinibOlumiantEli Lilly/IncyteLaunchedCDK4/6AtezolizumabTecentriqPfizerLaunchedAbemaciclibVerzeniosEli LillyLaunchedIL-17ASecukinumabCosentyxNovartisLaunchedIxekizumabTaltzEli LillyLaunchedPARPOlaparibLynparzaAstraZenecaLaunchedNiraparibZejulaZai LabLaunchedFluzoparibAiruiyiHengrui/HansohLaunchedPCSK

293、9EvolocumabRepathaAmgenLaunchedAlirocumabPraluentSanofi/RegeneronLaunchedCGRP/CGRPRErenumab/Amgen/NovartisNew drug application under reviewGalcanezumab/Eli LillyNew drug application under reviewOutlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry37China

294、 tightened requirements for biopharma innovation in its 14th Five-year Plan. In the coming years, we expect constant innovation breakthroughs in Chinas biopharma companies, mainly driven by: Talent and technology accumulation: Constant technology accumulation and the return of overseas talent to Chi

295、na will prompt Chinas innovative biopharma companies to start benchmarking themselves against international standards in technology, enhancing their innovation power. Long-term government inputs and policy support: Continuous increases in government R&D inputs will lower the cost barrier that local

296、biopharma companies face in innovative R&D, while preferential policy measures will attract these companies to invest more in the related areas. With China attaching more importance to the biopharma industry, serving the needs of local patients has become critical for domestic and foreign biopharma

297、companies alike. The disease mapping of MNCs, most of which are from Europe and the US, is different to that for patients in the Asia-Pacific region. They cannot therefore understand the needs of Chinese patients as local biopharma companies can. This is one area in which Chinas local biopharma comp

298、anies can outperform their overseas counterparts in innovative medicines and rapidly occupy the Chinese market.Overseas biopharma companies need to subject their innovative medicines to separate bridging experiments and even new clinical trials before introducing them into China. Local biopharma com

299、panies do not have to do this, which gives them a unique advantage in developing innovative biologics that conform to Chinas national conditions. A domestic PD-1 product has been included in the National Medical Insurance Catalogue for two years in a row (2019 and 2020), but no PD-1 product from a p

300、harma multinational was included. This proves that domestic innovative biologics have the quality to compete against medicines from MNCs. Local biopharma companies also have an advantage in supply and production. They can input innovation by correctly targeting unmet disease demands and pain points

301、in Chinas biopharma market under relatively few market restrictions, so that they can conduct research and develop world-class innovative biologics. Dr. Yingfei Wei, Chief Science Officer, Innoforce Pharmaceuticals, believes that Chinas biopharma industry needs more innovative products which conform

302、 to national conditions, and that innovative development should be based on Chinas environment and industrial foundations. Li Bin, professor at the Shanghai Institute of Immunology, Shanghai Jiaotong University School of Medicine, underscored the importance of innovative development based on the Chi

303、na paradigm.One such example is Camrelizumab, the PD-1 product independently developed by Hengrui Medicine. Research findings that Camrelizumab could be used in the treatment of terminal liver cancer were carried by The Lancet Oncology in February 2020, making it the first innovative biologics for l

304、iver cancer immunotherapy from China so recognized. In the same month, Hengrui announced that Camrelizumab was approved by the National Medical Products Administration for use in treating second-line terminal liver cancer48. In October 2021, Hengrui Medicine conducted a clinical trial on combining C

305、amrelizumab with Apatinib, another of its products, for the treatment of first-line terminal liver cancer49. In 2020, Camrelizumab also became the first innovative biologics in China to be included in guidelines on clinical diagnosis and treatment of lung cancer, liver cancer, esophagus cancer, and

306、lymphoma50. Hengrui Medicine has developed innovative biologics based on domestic disease mapping and local patient needs, emerging as a major player in Chinas biopharma innovation.Outlook on biopharma innovation trends in China | 2. Innovation trends in Chinas biopharma industry38Outlook on biophar

307、ma innovation trends in China | 3. Conditions in Chinas biopharma industry393. Conditions in Chinas biopharma industryChina, the second-largest economy in the world, has seen rapid development of its biopharma market and is gaining favor among biopharmaceutical MNCs, some of which view it as their k

308、ey strategic market. The domestic biopharma industry has witnessed remarkable developments, including an increasingly sophisticated network of institutions and R&D capabilities along with diverse product pipelines.Biopharma development was mentioned repeatedly in the government work report released

309、at the 4th Meeting of the 13th National Peoples Congress in 2021. According to the China Industrial Development Research Institute, Chinas biopharmaceutical market will exceed RMB4 trillion in 202251 (Figure 3.1).Figure 3.1 China Biologics Industry Output and Growth (2016-2024E, RMB1 trillion)Source

310、: China Industrial Development Research Institute, Prediction for Development Prospects and the Investment Research Report on Chinas Biopharma Industry in 2021Size of output value of bio-pharmaceuticalsGrowthOutlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry

311、40Figure 3.2 Policies in Biologics in 2020Source: Public data, Deloitte research and analysisThis report looks at three aspects of current conditions in Chinas biopharma industry regulatory policies, R&D models, and launched products types.Regulatory policies reform: the main areas and core policies

312、 The Proposals for Formulating the 14th Five-Year Plan for National Economic and Social Development and Long-range Goals for 2035 released by the State Council at the 2021 Two Sessions emphasize the need for adhering to innovation-driven development and speeding up the development of modern industri

313、al systems, including in the domestic biopharma industry. Pharmaceutical companies and regulators will further develop and support innovative products in the coming years. In 2020, the Center for Drug Evaluation of the National Medical Products Administration launched a host of reforms of the examin

314、ation and approval system for innovative medicines (Figure 3.2, Table 3.1). This extended from clinics 7 JanuaryGuiding Principles for Pharmaceutical R&D and Approval Supported by Real-world Evidence issued by the National Medical Products Administration22 JanuaryMeasures for the Supervision and Adm

315、inistration of Drug Production issued by the State Administration for Market Regulation30 MarchMeasures for the Administration of Drug Registration issued by the State Administration for Market Regulation13 MayNotice of the National Health Commission and the State Administration of Traditional Chine

316、se Medicine on Accomplishing the Technical Specification and Financial Management of Internet+ Healthcare Services Projects of Public Medical Institutions issued by the National Health Commission7 July Work Procedures for the Examination and Appraisal of Breakthrough Therapeutic Medicines (For Trial

317、 Implementation)Work Procedures for the Examination, Appraisal and Approval of Conditional Marketing Application of Medicines (For Trial Implementation)Work Procedures for the Examination, Appraisal and Approval of Preferential Marketing of Medicines (For Trial Implementation)issued by the National

318、Medical Products Administration21 OctoberNotice on Further Optimizing the Administrative Examination and Approval Procedures of Human Genetic Resources issued by the China Office for the Management of Human Genetic Resources12 June Plan for the Fine Group of Diagnosis and Treatment Classification of

319、 Diseases under Medical Security (CHS-DRG) (Version 1.0) issued by the National Healthcare Security Administration9 OctoberNotice of the General Office of the National Healthcare Security Administration on Issuing the Pilot Work Plan for Total Amount Budget with Counting Method and Payment Based on

320、the Score of Disease Groups issued by the National Healthcare Security Administration19 November Technical Guidelines for the Approval of Conditional Medicine Marketing (For Trial Implementation) issued by the Center for Drug Evaluation of the National Medical Products Administration5 March Opinions

321、 on Deepening the Reform of Medical Insurance System issued by the CPC Central Committee and the State Council23 AprilGood Clinical Practice for PharmaceuticalsNational Medical Products issued by the National Health Commissionand examinations, to marketing prices and costs. Reforms will have an incr

322、easingly powerful impact on innovative medicines. Dr. Guoliang Yu from Innoforce Pharmaceuticals says few other national governments provide such strong support for biopharmaceutical industry development. The activism of Chinas drug evaluation authorities is a strong driver of the countrys biopharma

323、 innovation and reform.Outlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry41Table 3.1 Summary of Key Regulatory Policies Regarding Innovative Medicines in 2020Data: Haoyue Capital, Public data, curated by DeloittePolicyTopicGuiding Principles for Pharmaceutic

324、al R&D and Approval Supported by Real-world EvidenceAppraisal systemMeasures for the Supervision and Administration of Drug ProductionProduction managementOpinions on Deepening the Reform of Medical Insurance SystemMedical insurance systemMeasures for the Administration of Drug RegistrationAppraisal

325、 systemGood Clinical Practice for PharmaceuticalsClinical testNotice of the National Health Commission and the State Administration of Traditional Chinese Medicine on Accomplishing the Technical Specification and Financial Management of Internet+ Healthcare Services Projects of Public Medical Instit

326、utionsPrice and costPlan for the Fine Group of Diagnosis and Treatment Classification of Diseases under Medical Security (CHS-DRG) (Version 1.0)Price and costWork Procedure for the Examination and Appraisal of Breakthrough Therapeutic Medicines (For Trial Implementation)Work Procedures for the Exami

327、nation, Appraisal and Approval of Conditional Marketing Application of Medicines (For Trial Implementation)Work Procedures for the Examination, Appraisal and Approval of Preferential Marketing of Medicines (For Trial Implementation)Appraisal systemNotice of the General Office of the National Healthc

328、are Security Administration on Issuing the Pilot Work Plan for Total Amount Budget with Counting Method and Payment Based on the Score of Disease GroupsPrice and costNotice on Further Optimizing the Administrative Examination and Approval Procedures of Human Genetic ResourcesAppraisal systemTechnica

329、l Guidelines for the Approval of Conditional Medicine Marketing (For Trial Implementation)Appraisal systemOutlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry4243The Measures for the Administration of Drug Registration were promulgated in 2007. Over time, thos

330、e measures have become unable to support scientific development or the rapidly growing demands in Chinas pharmaceutical industry. The National Medical Products Administration revised the Measures, which were approved by the State Administration for Market Regulation in March 2020 before coming into

331、force on 1 July 2020.Strengthening full-lifecycle medicine management and the registration process for innovative medicines helped to enhance the entire regulatory system, from the development and marketing of medicines and post-marketing management, to the revocation of drug registration certificat

332、es52. The new Measures also add a chapter on accelerated drug registration procedures, introducing four accelerated evaluation and approval items a channel for breakthrough therapeutic drugs, conditional approvals, preferential evaluation and approvals, and special approvals.On 8 July 2020, the Nati

333、onal Medical Products Administration (NMPA) issued the Work Procedures for the Examination and Appraisal of Breakthrough Therapeutic Medicines (For Trial Implementation), the Work Procedures for the Examination, Appraisal and Approval of Conditional Marketing Application of Medicines (For Trial Impl

334、ementation) and the Work Procedures for the Examination, Appraisal and Approval of Preferential Marketing of Medicines (For Trial Implementation). The Opinions on Encouraging Preferential Evaluation and Approval of Drug Innovation were repealed at the same time. As the reform of the new drug evaluat

335、ion system has deepened in recent years, the NMPA has constantly explored ways to accelerate the regulatory approvals of innovative medicines. The three documents clarify previously controversial areas of uncertainty the identification scope of breakthrough therapeutic drugs, application conditions

336、for conditional regulatory approvals, and the applicability of preferential approvals. These new routes have brought systematic improvements for accelerated evaluation and approval processes (Figure 3.3).Extraordinary Evaluation is designed for drugs to respond to public health emergencies, Special

337、Evaluation focuses on innovative medicines and new drugs for stubborn and critical diseases, and Preferential Evaluation and Approval is for medicines that meet clinical demands and have clinical advantages. In combination, these measures mean the NMPA now prioritizes the development of leading drug

338、s in the market with high clinical value and can meet previously unmet clinical needs53.The revisions to the Measures for the Administration of Drug RegistrationThe Work Procedures for the Examination and Appraisal of Breakthrough Therapeutic Medicines (For Trial Implementation) and two other docume

339、ntsThe impact of two major regulatory policies on Chinas innovative development of biopharma industry:Biopharma innovation trendsInnovative MedicinesInnovative medicines treating diseases severely endangering lifeInnovative medicines with high clinical value or medicines treating serious diseases an

340、d clinically neededOutlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry44Figure 3.3 Three Accelerated Channels of Marketing Approval and EvaluationApplication conditions for conditional approval for marketing Drugs treating diseases severely endangering life a

341、nd with no other effective treatment, and drugs urgently needed in public health, where clinical trial data shows curative effect and can predict clinical value. Vaccines urgently needed to respond to a major public health emergency or other vaccines the National Health Commission identifies as an u

342、rgent need, where the evaluation shows that benefit outweighs risk.Application conditions of evaluation of breakthrough therapeutic drugs Used to prevent and treat diseases severely endangering life or severely affecting life quality. For diseases without effective treatment, the drug can provide ef

343、fective treatment; or compared with existing treatments, the drugs have a clear clinical advantage, i.e., single use or use together with one or multiple kinds of other drugs, shows clear improvement in one or more areas.Application conditions of preferential evaluation Innovative medicines and impr

344、oved new medicines for urgent clinical needs, serious infectious diseases or rare diseases New varieties, dosage forms and specification of childrens drugs conforming to childrens physiological features Vaccines for disease prevention and control and innovative vaccines Drugs included into the proce

345、dures of breakthrough therapeutic drugs Drugs conforming to conditional approvalSource: Public data, Deloitte research and analysisThe main impacts of the abovementioned reforms on Chinas development of innovative biologics are: It takes much less time for drugs with a breakthrough curative effect t

346、o move from clinical trials to regulatory approval. New drug applications can be submitted as soon as Phase I clinical trials are completed. The process could become five years faster, emphasizing how the NMPA has stepped up support for innovative drugs with high clinical value. Large-scale procurem

347、ent is shrinking the market for, and previously high margins of, generic drugs and biosimilars, making innovative transformation imperative. Faster evaluation and the higher value placed on innovative products will drive the rise to prominence of domestic pharmaceutical companies with superior innov

348、ation power.Outlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry45R&D models: innovative transformation and international cooperation The biopharma industry has been hindered by barriers to capital and technology for many years. As Chinas economy booms, many l

349、ocal pharmaceutical companies now have bundles of cash, but their scientific and technological development lags. Those that wish to develop innovative biologics are in no position to do so. Many of the biopharma industry thought leaders Deloitte spoke to repeatedly mentioned biological technology ba

350、rriers. As innovative medicines have become dominant in recent years, a growing number of local pharmaceutical companies are choosing to enrich their product pipelines via in-licensing. Jason Yang, Chief Medical Officer of CStone Pharmaceuticals, said in-licensing has two benefits, accelerating inno

351、vative biopharma products speed to enter in China to meet previously unmet demand and building up the innovation strength of local biopharma companies. Ingrid Zhang from Novartis Pharmaceuticals China added that in-licensing and out-licensing can enhance cooperation and communication between multina

352、tional and domestic biopharma companies. In-licensing cooperation dominates In 2020, oncology had the most in-licensed projects (47%), followed by infectious diseases (23%). Together they made up over two thirds of transaction volume25 (Figure 3.4).Figure 3.4 Proportion of Disease Areas Covered by L

353、icense-in Projects in China in 2020OncologyInfectious DiseaseOphthalmologyCardiovascularOthersEndocrinologyAutoimmunityNeurologySource: Haoyue Capital, 2020 Joymeo Annual Report, Biopharmaceuticals: Chinas Innovation, Global Perspective Part 1 Many biopharma start-ups in China partner with overseas

354、companies when they do not have strong pipeline, seeking to acquire exclusive product development rights in Mainland China and even Greater China to make up for their deficiencies in innovation capacity. Many foreign pharmaceutical companies are happy to work with local biopharma firms in exchange f

355、or the access to the Chinese market. This way of cooperation with local biopharma companies allows foreign players to gain local influence and market familiarity of local biopharma companies, which alleviate their growing pains when entering the Chinese market and reduce the risk of non- acclimatiza

356、tion.Outlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry46In 2020, a CAR-T and TCT double-antibody project by Innovent Biologics and Roche was the largest in-licensed transaction, involving USD2 billion and highlighting the high value of CGT products. Among t

357、he top 15 in-license transactions, 12 involved oncology treatments, two infectious diseases and one autoimmune disease. This showed that tumor-related diseases remain a common research topic, and that oncology is the development focus of many innovative biologics studies54, 55 (Table 3.2). Out-licen

358、se innovative medicine projects go global With accumulated strengths and returned overseas talent, a growing number of domestic biopharma companies in China are specializing in independent R&D and innovative product development that can optimize their product pipelines. However, many of them are yet

359、 to set up sophisticated sales and Table 3.2 Chinas Top 15 In-licensing Transactions in 2020 by ValueSource: P, C, curated by DeloitteIntroducerAuthorizerProductDisease areaTransaction amountInnovent BiologicsRocheDeveloping universal CAR-T therapy and TCT double-antibody, including glofitamabOncolo

360、gyUSD2 billionShanghai JunshiRevitope OncologyGlobal new T-cell chimeric activation cancer therapy with double-antibody as the targetOncologyUSD810 millionBeiGeneAssembly BiosciencesVebicorvir; ABI-H2158; ABI-H3733Hepatitis B virusUSD540 millionLianBioBridgeBio PharmaInfigratinib; BBP-398OncologyUSD

361、530 millionCStone PharmaceuticalsLegoChem BiosciencesABL202OncologyUSD360 millionHuadong MedicineImmunoGenMirvetuximab SoravtansineOncologyUSD310 millionFosun PharmaBioNTechBNT162COVID-19USD300 millionGrand Pharma (China) Telix PharmaceuticalsTLX591; TLX250; TLX101; TLX591-CDx; TLX250-CDx; TLX599-CD

362、xOncologyUSD280 millionZai LabCullinan OncologyCLN-081OncologyUSD230 millionInmagene BiopharmaceuticalsAffibodyABY-035Autoimmune diseasesUSD230 million3DMedAraviveAVB-500OncologyUSD220 million3DMedSELLASGalimpepimut-S (GPS); GPS+OncologyUSD210 millionBioNova PharmaCama BiosciencesAS-1769OncologyUSD2

363、10 millionApollomicsGlycoMimeticsUproleselan; GMI-1687OncologyUSD200 millionZai LabRegeneron PharmaceuticalsREGN1979OncologyUSD190 millionmarketing teamsand are unfamiliar with the overseas markets. To penetrate overseas markets, they often opt to work with foreign enterprises via out-licensing. Mos

364、t of the out-licensing projects (25) in 2020 were in the oncology field (Figure 3.5), with more than half involving development and commercialization rights, primarily to avert risk at the early clinical stage and access to capital. The cooperation between Singlomics Biopharmaceuticals and BeiGene U

365、S showed that early-stage out-licensing is beneficial to local companies that are inclined to venture into the international market55.Outlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry47Figure 3.5 Diseases Covered by Chinese Biopharma Companies Licensing-out

366、 Projects in 2020 (Unit： Number of Projects)Source: C, curated by DeloitteCommercializationDevelopment and commercializationTechnologyIn 2020, the cooperation between IMAB and AbbVie achieved the highest transaction value (USD3 billion) of any out-licensed project involving a domestic biopharma comp

367、any. Of the 15 highest value projects, 12 involved oncology products. The highest value projects in innovative biologics, whether in China or in elsewhere, tend to target cancer treatments. Unlike in-licensed projects, however, out-license deals still focus on traditional biologics mainly, rather th

368、an new-generation treatments such as CGT54, 55 (Table 3.3).68212427OncologyNeurologyInfectious Disease Cardiovascular and metabolismAutoimmune diseasesUndisclosedOphthalmologyOutlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry48Source: P

369、, C, curated by DeloitteNote: The cooperation between Innovent Biologics and Eli Lilly in Sintilimab began in 2015, and under the agreement, they jointly own the rights to develop and commercialize Sintilimab in China. Their cooperation aims to give Eli Lily the exclusive license outside ChinaTable

370、3.3 The Top 15 Domestic Out-license Transactions by Value in 2020AuthorizerIntroducerProductDisease areaTransaction amountIMABAbbVieLemzoparlimab (TJC4)OncologyUSD3 billionInnovent BiologicsRocheSeveral double specific antibody and cell treatment products for hematologic tumor and solid tumorOncolog

371、yUSD2.1 billionCStone PharmaceuticalsEQRxSugemalimabOncologyUSD1.3 billionInnovent BiologicsEli LillySintilimab*OncologyUSD1 billionJacobio PharmaceuticalsAbbVieJAB-3068; JAB-3312OncologyUSD860 millionHenliusBinacea PharmaHLX-35OncologyUSD760 millionHua MedicineBayerdorzagliatinDiabetesUSD690 millio

372、nOneness Biotech Microbio (Shanghai)LEO Pharma A/SFB825Atopic dermatitis/asthmaUSD570 millionFochon PharmaceuticalsEli Lilly & CoFCN-338OncologyUSD440 millionTransTheraLG Chem LtdTT-01025Nonalcoholic steatosis heptitisUSD350 millionIMABKalbe FarmaTJDOncologyUSD340 millionGen House BioHUYA Bioscience

373、HBI-2376OncologyUSD280 millionJunshi BiosciencesEli Lilly & CoCOVID-19 neutralizing antibodyVirusUSD250 millionShanghai Origincell BiotechUndisclosedDouble-antibody productOncologyUSD140 millionJiangsu HengruiDong-A PharmaSHR-1701OncologyUSD140 millionJiangsu HengruiHLF Life SciencePyrotinibOncology

374、USD110 millionLaunched products types: From universal innovation to leading innovationAs innovative biologics have become more highly valued, the innovation biologics type of domestic biopharma companies has shifted from me-too/me-better to universal innovative (best-in-class) and innovative medicin

375、es with high value and urgent clinical demand (first-in-class). This indicates that requirements for innovative medicines have risen constantly. Chinas biopharma approval and evaluation system was reformed for the first time in 2015, the same year that the State Council first listed biopharma as a p

376、illar industry. The most radical reform was in 2017 when the general offices of the CPC Central Committee and State Council released the Opinions on Deepening the Reform of the Evaluation and Approval Systems and Encouraging Innovation on Drugs and Medical Devices, promoting the alignment of Chinas

377、biopharma industry with the rest of the world. After the release of a series of medical system reforms in 2020, innovative medicines have been set to reach a peak.Since the Opinions of the State Council on Reform of the System of Evaluation, Review and Approval of Drugs and Medical Devices were rele

378、ased in August 2015, the number of innovative drugs approved in China, most of them from MNCs, has been growing. In 2020, COVID-19 prompted a decline in the number of innovative medicines approved, but domestic pharmaceutical companies and multinationals neared parity in approvals for the first time

379、. As of 19 March 2021, domestic companies had outpaced multinationals in innovative medicine approvals (Figure 3.6)56.Outlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry49Figure 3.6 Innovative Medicines Approvals (2016-March 2021)Source: P, curated by Deloitt

380、eLocal innovative medicinesMultinational innovative medicines435404050602001920209As of March 31st, 2021Source: P, curated by DeloitteNote: Excludes vaccine productsLocal innovative biologicsMultinational innovative biologicsAs of March 31st, 2021Figure 3.7 Innovativ

381、e Biologics Approvals (2016-March 2021)347201820192020Nonetheless, available innovative biologics tend to be products from MNCs, pointing to the necessity of increasing investment in local R&D. Only few of the innovative medicines approved before 2018 were biologics

382、(Figure 3.7), and most domestic innovative medicines were mainly chemicals. From 2018 to 2020, the number of approved innovative biologics has grown at a swift pace. However, these were predominantly from MNCs, with only 13 domestic products (Table 3.4)56.Outlook on biopharma innovation trends in Ch

383、ina | 3. Conditions in Chinas biopharma industry50Table 3.4 Local Innovative Biologics Approved in China Since 2016DrugCommodityCompany ApprovalIndicationsTelitaciceptTaiaiRemeGen10 Mar 2021Systematic Lupus ErythematosusIdursulfase-betaHunteraseCANbridge 3 Sept 2020Ramsay-Hunt syndromeInetetamabCipt

384、erbinSunshine Guojian19 June 2020 Breast cancerRecombinant Mycobacterium Tuberculosis Fusion Protein (EC) YikaZhi Fei Biological24 Apr 2020Diagnosis of tubercle bacillus infection; clinical auxiliary diagnosis of tuberculosis patientsTislelizumabBaizeanBeiGene27 Dec 2019Classical Hodgkin lymphomaCam

385、relizumabAiRuiKaHengrui Medicine30 May 2019Classical Hodgkin lymphomaSintilimabTyvytInnovent Biologics27 Dec 2018Classical Hodgkin lymphomaToripalimabTUOYIJunshi Biosciences17 Dec 2018MelanomaRecombinant Human Interferon Alfa 2b InjectionPaiyishengKawin6 July 2018It is indicated for treatment of som

386、e viral diseases, such as acute and chronic viral hepatitis, herpes zoster and genital warts; it can also be used for treatment of some cancers, such as hairy cell leukemia, chronic myeloid leukemia, multiple myeloma, non-Hodgkin lymphoma, malignant melanoma, renal cell carcinoma, laryngeal papillom

387、a, Sarcoma, ovarian cancer, basal cell carcinoma and superficial bladder cancer.Mecapegfilgrastim InjectionAiduoHengrui Medicine17 May 2018Reducing the rate of infection represented by febrile neutropenia for adult patients with non-myeloid malignant tumor Recombinant Cytokine Gene Derived Protein I

388、njectionLefunengGENOVA20 Apr 2018Chronic hepatitis B Beinaglutide Injection YishengtaiBENEMAE13 Dec 2016Type 2 Diabetes in AdultsPeginterferon Alfa-2b InjectionPaigebinAmoytop Biotech9 Sept 2016Chronic hepatitis CSource: P, curated by Deloitte ResearchIn 2020, MNCs continued to dominate innovative b

389、iologics approved for marketing in China. Dr. Ruilin Song of the China Pharmaceutical Innovation and Research Development Association expects Chinas biopharma industry to become a pioneering innovator in the next 10 to 15 years, with breakthroughs fueled by increased investment in basic research and

390、 the development of research talent to upgrade China from a strong pharmaceuticals manufacturer to a global powerhouse.Outlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry51Figure 3.8 The Trend of Biopharma and CGT M&As (2017-February 2021)Investment and M&A a

391、re creating innovative biopharma portfoliosTo keep up with the fast-developing biopharma industry in China, many domestic biopharma enterprises without the R&D capacity for innovative products are prioritizing investment and M&A to innovate their 404736423055404550 -20020Source

392、: Mergermarket, curated by Deloitte ResearchNote: Transaction volume includes deals in which the value was not disclosed Value of biopharma and CGT M&A transactionsNumber of biopharma and CGT M&A transactions Unit: numberUnit: RMB billionThe boom in Chinas biopharma market has also attracted the att

393、ention of businesses in other sectors, with several intra- and cross-industry deals in 2020. Among the top 10 investment and M&A transactions in 2020, two cross-industry deals brought new entrants into the biopharma sector, four intra-industry deals were motivated by business Feb. 2021pipeline portf

394、olios and diversify their development. In 2020, there were 42 biopharma and CGT M&A deals in China with a combined transaction value of RMB35.58 billion, with both volume and value increasing from 2019s levels, indicating a growth trend rather than a decline in biopharma deal activity, despite the i

395、mpact of COVID-19. The main reasons for this growth were increased attention paid on healthcare amid the pandemic and Chinas rising status in the global biopharma market (Figure 3.8)57.expansion, and four capital injections into biopharma enterprises by institutional investors sought to boost the co

396、mmercialization of innovative biopharma products (Table 3.5)57.Outlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry1035.496.337.035.65.06090408011052Table 3.5: The Top 10 Investment and M&A Transactions Related to Chinese Biopharma Enterprises in 20

397、20AnnouncedTarget companyBidderTransaction value (RMB1 billion)Transaction purpose7 Dec 2020Sinovac Life Sciences Co., Ltd.Sino Biopharmaceutical Limited3.4Promoting commercialization of COVID-19 vaccines 30 May 2020Zhejiang Jinhua Conba Bio-pharm. Co., Ltd.Zhejiang Traditional Chinese Medicine & He

398、alth Industry Group Co., Ltd.3.3Building main platform for traditional Chinese medicine and health industry in Zhejiang Province13 Oct 2020Boya Biopharma Group Co., LtdChina Resources Pharmaceutical Group Limited2.6Expanding blood product pipeline and developing the biopharma business segment5 Sept

399、2020North China Pharmaceutical Group CorporationJizhong Energy Resources Co., Ltd.2.5Expanding biopharma business segment10 Sept 2020Tonghua Dongbao Pharmaceutical Co., Ltd.DCP1.9Investing in biopharma enterprises10 Sept 2020Hubei Changjiangxing Pharmaceutical Co., Ltd.Kangyue Technology Co., Ltd.1.

400、9Expanding biopharma business segment1 Sept 2020Shenzhen Salubris Pharmaceuticals Co., Ltd.Carlyle Group1.8Investing in innovative medicine development and international commercialization17 Nov 2020D3 Bio, Inc.WuXi AppTec and other investors1.3Investing in biopharma start-ups to develop innovative b

401、iopharma products24 July 2020Haihe Biopharma Co., Ltd.Warburg Pincus1.2Accelerating global R&D and launch of numerous new anti-tumor drugs18 Feb 2020Hebei Daan Pharmaceutical Co., Ltd.Lhasa Shengtai Company1.1Expanding blood product pipeline and biopharma business segmentSource: MergerMarket, curate

402、d by Deloitte ResearchAt the same time, many well-capitalized domestic biopharma companies in China have sought strategic cooperation with MNCs to innovate their product portfolios and expand their global businesses. Some domestic biopharma enterprises have also launched original products that attra

403、cted the attention of MNCs, signaling Chinas ascent to the top echelon of innovative biopharma industries (Table 3.6). Outlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industryTable 3.6: Cases of Cooperation between Chinese Biopharma Companies and Multinational Pha

404、rmaceutical CompaniesAnnouncementChinese biopharma co. Multinational pharmaceutical co.Nature of cooperation28 Feb 2021Junshi BiosciencesAstraZenecaAstraZeneca obtained rights to Junshi Biosciences Toripalimab Injection in non-core markets of the Chinese Mainland, and exclusive promotion rights in C

405、hina related to UC indications to be approved subsequently for marketing. Junshi Biosciences retained control of Toripalimab in core markets of Chinese Mainland in relation to all approved indicators, except UC.18 Aug 2020Innovent BiologicsEli LillyInnovent and Eli Lilly expanded cooperation on Sint

406、ilimab Injection developed by Innovent. Innovent granted Eli Lilly exclusive license of sintilimab outside China, and Eli Lilly will promote Sintilimab in North America, Europe and other regions.21 May 2020CanSinoBIOPrecision NanoSystems (PNI)CanSinoBIO and PNI agreed to co-develop a COVID-19 vaccin

407、e based on mRNA-LNP leveraging PNIs proprietary RNA vaccine technology platform.4 May 2020Junshi BiosciencesEli LillyJunshi Biosciences and Eli Lilly will co-develop and commercialize SARS-CoV-2 neutralizing antibodies (Junshi SARS-CoV-2 Antibodies). Eli Lilly granted exclusive license to develop, m

408、anufacture and sell Junshi SARS-CoV-2 antibodies outside Greater China.Source: Public data, curated by Deloitte Research From Importing to China to Exported from China As Chinas domestic R&D capacity has become stronger, more domestic pharmaceutical companies are expanding globally and offering inde

409、pendently developed products, leading the industrys transformation from generics-oriented development to a new model focused on high-quality, original products, and driving the market away from me-too/me-better towards first-in-class. According to Building Chinas Pharmaceutical Innovation Ecosystem,

410、 the average annual R&D input of Chinas listed innovative biopharma companies has exceeded RMB1 billion. During the COVID-19 pandemic, domestic biopharma companies also demonstrated their innovative power to the world developing a range of COVID-19 vaccines and supplying these to many countries, whi

411、ch helped to effectively alleviate the spread of the pandemic and win global recognition. In addition, many innovative products from Chinese biopharma companies have been granted qualifications in the US (Figure 3.9; Table 3.7)28, proving R&D and innovation power of domestic biopharma companies to t

412、he world. Zanubrutinib, an innovative drug developed by Chinas BeiGene, was approved for marketing by the FDA in 2019, marking the first launch of an innovative medicine from China in the worlds pharmaceuticals powerhouse.In the next five years, more innovative biopharma products from domestic compa

413、nies will be approved for marketing across the world. Ingrid Zhang from Novartis Pharmaceuticals China notes that with the expanding biopharma market in China, many pharmaceuticals MNCs have come to understand the uniqueness of the Chinese market, and will start to prioritize demand and seek to meet

414、 the needs of domestic patients in China.Outlook on biopharma innovation trends in China | 3. Conditions in Chinas biopharma industry53Figure 3.9： Number of Special Qualifications Granted to the Innovative Biologics of Chinese Pharmaceutical Companies in the US (2015 vs. 2020)Source: PhIRDA & RDPAC,

415、 Building Chinas Pharmaceutical Innovation Ecosystem-Part One of the Series Research Reports: 2015-2020 Development Review and Future ProspectsSource: Public data, curated by Deloitte Research20152020Table 3.7 Chinas Innovative Biologics Going GlobalInnovative products (commodity)Chinese biopharma c

416、oCases of going globalToripalimab Injection(TUOYI)Junshi Biosciences On 1 February 2021, Junshi Biosciences announced a strategic cooperation with Coherus BioSciences on the development and commercialization of the Toripalimab injection developed by Junshi Biosciences in the US and Canada. Junshi Bi

417、osciences will grant Coherus the license for Toripalimab and two optional projects (if executed), and receive up to an aggregate of USD1.11 billion in an upfront payment, and exercise fee and milestone payments from Coherus. Toripalimab has been granted a Breakthrough Therapy Designation by the FDA

418、for the treatment of nasopharyngeal carcinoma. Junshi Biosciences is expected to submit the first application for approval of biological product for this indication to the FDA in 2021. The FDA also granted Toripalimab a Fast Track Designation (mucosal melanoma) and Orphan Drug Designation (mucosal m

419、elanoma, nasopharyngeal carcinoma and soft tissue sarcoma).Tislelizumab Injection (Baizean)BeiGene On 11 January 2021, BeiGene announced a strategic partnership with Novartis, granting Novartis the right to develop, produce and commercialize Tislelizumab in the US, Canada, Mexico, EU Member States,

420、UK, Norway, Switzerland, Iceland, Liechtenstein, Russia and Japan. The upfront payment could be as high as USD650 million, and the total transaction value is more than USD2.2 billion, the largest sum related to the external authorization of a single drug in China.SugemalimabCStone Pharmaceuticals On

421、 22 October 2020, Cstone Pharmaceuticals announced that the FDA had granted a Breakthrough Therapy Designation to Sugemalimab for the treatment of adult patients with relapsed or refractory extranodal natural killer/T-cell lymphoma (R/R ENKTL), making this the first domestic PD-L1 product granted a

422、Breakthrough Therapy Designation by the FDA. In the same month, the FDA also granted an Orphan Drug Designation to Sugemalimab. Cstone Pharmaceuticals said that the development and commercialization of Sugemalimab in the US will be accelerated thanks to the two designations.Multiple products such as

423、 bispecific antibodies and cell therapiesInnovent Biologics On 9 June 2020, Innovent Biologics and Roche announced strategic research and development collaboration to discover and develop bispecific antibodies and immune cell therapies. The milestone payments are estimated at USD1.96 billion. This i

424、s also a technical platform collaboration between Roche and a local Chinese biopharma company, covering a range of preclinical research products, primarily for cancer.53290Fast Track Designation Accelerated ApprovalOrphan DrugBreakthrough Therapy DesignationOutlook on biopharma innovation

425、 trends in China | 3. Conditions in Chinas biopharma industry5455Outlook on biopharma innovation trends in China | 4. Innovative biopharma development in the Yangtze River Delta564. Innovative biopharma development in the Yangtze River DeltaGiven the promising prospects for Chinas biopharma industry

426、, every region of the country is promoting its development, and the Yangtze River Delta is in a leading position. Many domestic innovative biopharma enterprises and biopharma MNCs are building R&D centers in the region. In 2020, there were 136,000 biopharma-related enterprises newly registered in th

427、e Yangtze River Delta, with an annual increase of 30.6%58. A sequence of far-reaching national and provincial policies has created a promising blueprint for biopharma innovation in the region. The value of biopharma production in Shanghai reached RMB383.3 billion in 2019. In 2020, the value of bioph

428、arma production in Jiangsu Province was estimated to exceed RMB600 billion, Zhejiang planned to achieve RMB215 billion in industrial production, and Anhui expected the main business income of the pharmaceutical industry to reach RMB200 billion58. All the thought leaders from Chinas biopharma industr

429、y that we interviewed said the Yangtze River Delta has considerable advantages in biopharma development, including a huge talent pool, multiple universities, and a favorable location.At the first China International Import Expo on 5 November 2018, President Xi Jinping elevated the integrated develop

430、ment of the Yangtze River Delta to a national strategy. With its developed economy, high degree of openness and strong innovation capacity, the region will benefit greatly from further integration to leverage complementary advantages and realize the sustainable growth.Kenneth Sun from Morgan Stanley

431、 Asia-Pacific said the Yangtze River Deltas biopharma sector has two main competitive advantages, continuous policy support from the government agencies and strong capital advantages. Powered by the government and enterprise, innovation and reform in this regions biopharma market is only set to acce

432、lerate.Policy support: National and provincial policies promote regional integrationAs a leading region in Chinas economic development, the Yangtze River Delta has always had demonstrative significance, and its innovative development has been a focus of the national and provincial governments. Bioph

433、arma, being one of Chinas key innovation and development industries, has benefitted from a range of supportive policies introduced by national and provincial agencies to promote its development and advancement in the Yangtze River Delta.Outlook on biopharma innovation trends in China | 4. Innovative

434、 biopharma development in the Yangtze River Delta57Deloitte collated policies related to innovative biopharma industry development in the Yangtze River Delta introduced over the past five years (Figure 4.1, Table 4.1) to establish a four-stage process of the integrated development independent develo

435、pment by different provinces, exploration of inter-provincial cooperation, the rapid development of inter-provincial cooperation, and Yangtze River Delta integration takes off. Independent development by different provinces: Shanghai Municipality, Zhejiang, Jiangsu, and Anhui provinces strived to pr

436、omote the continuous development of the biopharma industry, and constantly strengthened the requirements for the innovation capacity of local biopharma enterprises. However, this effort promoted internal development alone and had no external influence. Exploration of inter-provincial cooperation: Fr

437、om about 2019, Shanghai, Zhejiang, Jiangsu, and Anhui no longer confined the innovative biopharma development to their own locales and began to explore the expansion of industrial development policies to nearby provinces and cities. This marked the start of the exploration period for inter-provincia

438、l cooperation, which emphasized high-quality, refined development and created sub-categories of regional biopharma development. Rapid development of inter-provincial cooperation: In December 2019, the Communist Party of China Central Committee and the State Council issued the Outline of Integrated D

439、evelopment of the Yangtze River Delta, which set out strategic plans for the regions integrated development. Around the same time, provincial governments began to cooperate for biopharma industry development, launching a series of polices to promote this across the Yangtze River Delta and ushering i

440、n a period of rapid development. Yangtze River Delta integration takes off: In December 2020, the Ministry of Science and Technology issued the Yangtze River Delta Science and Technology Innovation Community Construction and Development Plan, which once again elevated the significance of the regions

441、 integrated innovative development. It puts forward further requirements for breakthroughs in science and technology, aims to enhance the leading role of Shanghai as an innovation center, and seeks to strengthen the innovation advantages of Jiangsu, Zhejiang, and Anhui, making the Yangtze River Delt

442、a a national and even international pioneer in biopharma innovation. At the Fourth Session of the 13th National Peoples Congress in March 2021, Premier Li Keqiang highlighted that the Government Work Report established biopharma industry innovation and reform as a policy priority. These national pol

443、icies illustrate the governments continuous emphasis on the integrated development of the Yangtze River Delta and industrial innovation.Outlook on biopharma innovation trends in China | 4. Innovative biopharma development in the Yangtze River Delta58Independent development by different provinces The

444、 provinces and cities in the Yangtze River Delta mainly focused on the promotion and development of biopharma within their own territories, and policies were limited to their own regions. Shanghai General Office of Shanghai Municipal Peoples Government issued the Action Plan to Promote the High-qual

445、ity Development of the Biopharma Industry in Shanghai (2018-2020).Jiangsu Jiangsu Provincial Peoples Government issued the Opinions of the Provincial Government on Promoting the High-quality Development of the Biopharma Industry. Several Measures for Accelerating the High-quality Development of the

446、Biopharma Industry in Suzhou.Exploration of inter-provincial cooperation Provinces and cities in the region began to actively drive innovative biopharma development and started to try inter-provincial cooperation to promote this. Medical products administrations of Shanghai, Jiangsu, Zhejiang, and A

447、nhui jointly issued the Implementation Plan for the Pilot of Medical Device Registrant System in the Yangtze River Delta. Zhejiang Provincial Development and Reform Commission issued Action Plan for Bioeconomy Development in Zhejiang Province (2019-2022). Communist Party of China Central Committee a

448、nd the State Council jointly issued the Outline of Integrated Development of Yangtze River Delta.Rapid development of inter-provincial cooperation After the State Council issued the Outline of Integrated Development of the Yangtze River Delta, biopharma innovation and cooperation in the region accel

449、erated rapidly. Peoples governments of Shanghai, Jiangsu, and Zhejiang issued Several Policies and Measures for Supporting the High-quality Development in the Yangtze River Delta Integrated Ecological and Green Development Demonstration Zone. The Ministry of Science and Technology issued the Yangtze

450、 River Delta Science and Technology Innovation Community Construction and Development Plan.Yangtze River Delta integration takes off At the 4th Session of the 13th National Peoples Congress in March 2021, Premier Keqiang LI stressed the significance of innovative development of the biopharma industr

451、y in the Yangtze River Delta, marking its official take-off.Figure 4.1: The Trajectory of Integrated Development of the Biopharma Industry in the Yangtze River Delta and Some Representative Policies Source: Official websites of Shanghai Municipal Peoples Government, Peoples Government of Zhejiang Pr

452、ovince, Jiangsu Provincial Peoples Government and Peoples Government of Zhejiang Province, curated by Deloitte ResearchOutlook on biopharma innovation trends in China | 4. Innovative biopharma development in the Yangtze River Delta59Table 4.1 Policies Supporting Innovative Development of Biopharma I

453、ndustry in the Yangtze River DeltaRegionLevelPolicyShanghaiProvincialAction Plan for Biopharma Industry Development in Shanghai (2014-2017)Implementation Opinions of the General Office of Shanghai Municipal Peoples Government on Promoting the Healthy Development of the Biopharma Industry in Shanghai

454、Measures of Shanghai Municipality on the Administration of Special Funds for Promoting High-quality Industrial Development (Interim)Implementation Plan for Promoting the Characteristic Development of Biopharma Industrial ParkAction Plan to Promote the High-quality Development of the Biopharma Indust

455、ry in Shanghai (2018-2020)DistrictOpinions of Minhang District on Special Policies for Accelerating the Development of Biopharma IndustryAction Plan to Promote the High-quality Development of the Biopharma Industry in Qingpu District (2019-2020)Three-year Action Plan to Promote the High-quality Deve

456、lopment of the Biopharma Industry in Jinshan District (2019-2021)Several Policies for Promoting the High-quality Development of the Healthcare Industry in Fengxian District of Shanghai Several Measures for the Concentrated Development of Biopharma Industry in Lin-gang Special Area of China (Shanghai

457、) Pilot Free Trade ZoneZhejiangProvincialAction Plan for Bioeconomy Development in Zhejiang Province (2019-2022)Several Opinions on Promoting the High-quality Development of Pharmaceutical Industry in Zhejiang ProvinceMunicipalImplementation Opinions on Promoting the Innovative Development of the Bi

458、opharma Industry in HangzhouMeasures for Promoting Investment Attraction for Biopharma Industry in Jinhua Economic & Technological Development Zone (for Trial Implementation)Opinions of the General Office of the Peoples Government of Ningbo Municipality on Accelerating the Development of Biopharma I

459、ndustryPlan of Jinhua for Biopharma Industry Talents (2018-2022)Biopharma Industry Cultivation Plan of Jinhua (2019-2021)Measures for Health Bio-industrial Park Project Access in JinhuaJiangsuProvincialOpinions of the Provincial Government on Promoting the High-quality Development of the Biopharma I

460、ndustryMunicipalSeveral Measures for Accelerating the High-quality Development of the Biopharma Industry in SuzhouSeveral Measures for Accelerating the Development of the Modern Biopharma Industry in WuxiDistrictSeveral Policies for Accelerating the High-quality Development of the Biopharma Industry

461、 in Jiangning District of NanjingOpinions of Taizhou Medical New & Hi-tech Industrial Development Zone on Promoting the High-quality Development of the Big Health IndustryPolicies for Promoting the Development of Biopharma Industry in Nanjing Jiangbei New AreaAnhuiProvincialNotice of the Peoples Gov

462、ernment of Anhui Province on Issuing Several Policies for Supporting the Development of Modern Medical and Pharmaceutical IndustryMunicipalNotice of Bozhou Municipal Peoples Government on Issuing Several Policies for Supporting Medical Products Research and Development, Production and OperationDiscl

463、osure of Information Concerning the Fund Arrangement Plan for Policy Supporting Items of the Promotion of Major Emerging Industrial Bases, Major Emerging Industrial Projects, Special Projects for Major Emerging Industries, and Innovative Modern Industrial System and the Development of Modern Medical

464、 and Pharmaceutical Industry in Bozhou in 2020CountyPlan for the Utilization of Special Guiding Fund for Concentrated Development Base of Modern Pharmaceutical Industry in Taihe CountySource: Official websites of Shanghai Municipal Peoples Government, Peoples Government of Zhejiang Province, Jiangsu

465、 Provincial Peoples Government and Peoples Government of Anhui Province, and Deloitte ResearchOutlook on biopharma innovation trends in China | 4. Innovative biopharma development in the Yangtze River Delta60Medical product inspection authori-ties in the Yangtze River Delta are also providing more s

466、upport for the launch of innovative biopharma products, while provincial government author-ities are cooperating to optimize the product launch process. On 22 December 2020, the National Medical Products Administration established two evaluation and inspection sub-centers in Shanghai, one for medica

467、l products and the other for medical devices. These sub-centers have shortened the period of adminis-trative review, reduced the costs of enterprises, and improved the commercialization of achievements in biopharma innovation and R&D for the high-quality development of biop-harma in the Yangtze Rive

468、r Delta59.Talent accumulation: Top industrial talent is being brought in to accelerate scientific innovation and reformBiopharma development in the Yangtze River Delta is diverse, with each part of the region having its own advantages (Figure 4.2). This diverse industry layout is attractive to bioph

469、arma talent and governments are supporting talent introduction. At a forum on integrated HR development in December 2020, two suggestions were put forward to boost the introduction of international and domestic biopharma industry talent in the Yangtze River Delta60: Promote practical cooperation on

470、talent projects and talent development through a school-enterprise model Support biopharma start-ups and create a favorable corporate and regulatory environment to enable talent to thrive In September 2020, the Executive Committee of the Yangtze River Delta Integrated Ecological and Green Developmen

471、t Demonstration Zone, in conjunction with overseas science and technology experts in Shanghai, Jiangsu, and Zhejiang issued the Implementation Plan for Mutual Recognition of Work Permits of Foreign High-end Talent, aiming to facilitate more open talent cooperation mechanism and boost high-quality de

472、velopment61.Dr. Guoliang Yu from Innoforce Pharmaceuticals noted that Chinas biopharma industry has previously faced an acute shortage of production talent. As China-US trade tensions have intensified, numerous senior technical personnel and researchers, including production talent having left their

473、 jobs at biopharma enterprises in the US to return home, providing a huge boost to biopharma production technology and injecting new vitality into biopharma innovation in China.Outlook on biopharma innovation trends in China | 4. Innovative biopharma development in the Yangtze River Delta61Figure 4.

474、2 Local Distinctiveness of Biopharma Industry in Yangtze River DeltaSource: C, Suggestions and Strategies for the Coordinated and Innovative Development of Biopharma Industrial Clusters in the Yangtze River DeltaCapital strength: Substantial capital support is being provided to enable innovative cor

475、porate development in the Yangtze River DeltaGovernments in the Yangtze River Delta are also providing capital support to biopharma enterprises within their jurisdiction. The support includes subsidies for R&D, financial assistance through cooperation with third parties, and financial incentives to

476、attract biopharma enterprises and talent. Deloittes research found that local governments in the Yangtze River Delta provide financial support for the R&D and the launch of innovative medicines, and many of them are also subsidizing the settlement of innovative R&D centers (Table 4.2). More financia

477、l support is expected to pour in to fill existing gaps.Zhangjiang Science City of ShanghaiR&D of innovative bio-pharmaceuticalsKunshanDevelopment of medicines based on RNAiLianyungangR&D of biopharmaceuticals TaizhouDevelopment of biological agents and vaccinesNanjingDevelopment of gene therapyShaox

478、ingR&D of bio-pharmaceuticals and development of pharmaceutical equipmentHangzhouR&D of innovative bio-pharmaceuticalsOutlook on biopharma innovation trends in China | 4. Innovative biopharma development in the Yangtze River Delta62Table 4.2 Capital Support Policies for the Development of Biopharma

479、Industry in the Yangtze River DeltaOfficial documentIssuer Type of project with capital supportInvestment in innovative biopharma R&D Launch of innovative biopharma productsEstablishment of biopharma R&D centersImplementation of biopharma manufacturingIntroduction of biopharma talentsAction Plan to

480、Promote the High-quality Development of the Biopharma Industry in Shanghai (2018-2020)Shanghai Municipal Peoples GovernmentSeveral Policies for Supporting the Development of Modern Medical and Pharmaceutical IndustryAnhui Provincial Peoples GovernmentImplementation Opinions of the General Office of

481、Hangzhou Municipal Government on Promoting the Innovative Development of the Biopharma Industry in HangzhouHangzhou Municipal Peoples Government Opinions of the General Office of the Peoples Government of Ningbo Municipality on Accelerating the Development of Biopharma IndustryNingbo Municipal Peopl

482、es GovernmentSeveral Measures for Accelerating the High-quality Development of the Biopharma Industry in SuzhouSuzhou Municipal Peoples Government Several Measures for Accelerating the Development of the Modern Biopharma Industry in WuxiWuxi Municipal Peoples Government Several Policies for the Deve

483、lopment of Biopharma IndustryXuzhou Municipal Peoples GovernmentSource: Published on the official websites of local governments, curated by Deloitte ResearchIn addition to government financial support, biopharma enterprises in the Yangtze River Delta received substantial sums in private capital from

484、 PE and VC firms and IPOs. Since 2017, of the 42 pre-profit Chinese biopharma enterprises that listed on NASDAQ, the SSE STAR Market, and HKEX, 27 (64%) are based in the Yangtze River Delta, highlighting the prowess of the regions biopharma industry (Table 4.3)62. Outlook on biopharma innovation tre

485、nds in China | 4. Innovative biopharma development in the Yangtze River Delta63Table 4.3 Biopharma Enterprises in Yangtze River Delta Listed without a Record of ProfitabilitySource: Wind and official websites of the enterprises, curated by Deloitte ResearchCompanyMarketTime of listingPipeline and se

486、gmentProvinceBeyondSpringNASDAQ9 Mar 2017Cancer immunotherapyAnhuiZai LabNASDAQ20 Sept 2017Medicines for cancer, autoimmune and infectious diseasesShanghaiHKEX28 Sept 2020AscletisHKEX1 Aug 2018Anti-viral drugsZhejiangHua MedicineHKEX14 Sept 2018DiabetesShanghaiInnoventHKEX31 Oct 2018Bio-pharmaceutic

487、als for the treatment of cancerJiangsuJunshi BiosciencesHKEX24 Dec 2018Medicines for cancer, chronic, autoimmune, nervous system and infectious diseasesShanghaiSSE STAR Market15 July 2020CStone Pharmaceuticals HKEX26 Feb 2019Bio-pharmaceuticals for the treatment of cancerJiangsuMabpharmHKEX31 May 20

488、19New antibody drugs, biosimilarsShanghai/JiangsuHenliusHKEX25 Sept 2019Biosimilars, innovative bio-pharmaceuticalsShanghaiAscentage PharmaHKEX28 Oct 2019Small molecule drugs for the treatment of cancerJiangsuTOT BIOPHARMHKEX8 Nov 2019Medicines for the treatment of cancerJiangsuAlphamab OncologyHKEX

489、12 Dec 2019Bio-pharmaceuticals JiangsuI-Mab BiopharmaNASDAQ17 Jan 2020Cancer immunotherapyShanghaiZelgenSSE STAR Market23 Jan 2020Treatment for cancer, hemorrhage and hematological diseases, hepatobiliary diseases and immune inflammationJiangsuKintor HKEX22 May 2020Drugs for cancer and other AR-rela

490、ted diseasesJiangsuLegend BiotechNASDAQ5 June 2020Drugs for cancer and infectious diseasesJiangsuOcuMensionHKEX10 July 2020Ophthalmic therapiesJiangsuGenor Biopharma HKEX7 Oct 2020Cancer immunotherapyShanghaiEverest MedicinesHKEX9 Oct 2020Drugs for oncology, internal, cardiorenal and infectious dise

491、asesZhejiangFrontier SSE STAR Market28 Oct 2020Long-acting polypeptide drugsJiangsuJW TherapeuticsHKEX3 Nov 2020Immunotherapies for hematological cancers and solid tumorsShanghaiAntengeneHKEX20 Nov 2020Anti-cancer drugsShanghaiAllist SSE STAR Market2 Dec 2020Anti-cancer drugsShanghaiHarbour BioMedHK

492、EX10 Dec 2020Cancer immunotherapyShanghaiGracell BiotechnologiesNASDAQ8 Jan 2021Breakthrough cell therapiesJiangsuAdagene NASDAQ9 Feb 2021Cancer immunotherapy and targeted therapyJiangsuConnect BiopharmaNASDAQ19 Mar 2021Inflammatory immunological diseasesJiangsuOutlook on biopharma innovation trends

493、 in China | 4. Innovative biopharma development in the Yangtze River Delta64From January 2018 to March 2021, there were 171 investment and financing transactions with a combined value of RMB63.9 billion involving biopharma enterprises from the Yangtze River Delta (Figure 4.3)61. The distribution of

494、these transactions Deloittes horizontal comparison of Chinas three major integrated development regions shows that the Yangtze River Delta has leading advantages when it comes to positioning its biopharma industry at a global level, mainly thanks to its complete pharmaceutical industry Figure 4.3 In

495、vestment and Financing Transactions Involving Biopharma Enterprises in the Yangtze River Delta from 2018 to March 2021 (Unit: RMB billion)Source: Wind, statistics conducted by Deloitte0540reflects 2019s Outline of Integrated Development of the Yangtze River Delta, with Shanghai playing a

496、leading role and Jiangsu, Zhejiang, and Anhui provinces leveraging their respective advantages.Shanghai535.521.67.70.1ZhejiangJiangsuAnhuichain comprising a rich, diverse range of life sciences and healthcare enterprises (Table 4.4). However, the comparison also reveals some areas of homogeneous inn

497、ovation, which could challenge Yangtze River Delta biopharma innovation in future63.Outlook on biopharma innovation trends in China | 4. Innovative biopharma development in the Yangtze River Delta65The Yangtze River Deltas biopharma industry will inevitably face challenges, and its weaknesses in inn

498、ovative development are consistent with those across China. More importance should be given to investing in basic research and commercialization, and further progress should be made in attracting and developing well-rounded talent.Source: Public data, curated by Deloitte Research Table 4.4: Comparis

499、on among Yangtze River Delta, Beijing-Tianjin-Hebei Region and Guangdong-Hong Kong-Macao Greater Bay Area in Terms of Biopharma Industry DevelopmentYangtze River Delta 59 60 61 63Beijing-Tianjin-Hebei 64 65Guangdong-Hong Kong-Macao GBA 66 67 68Priority Building a Shanghai-led pattern, driving the in

500、crease of innovation advantages of Jiangsu, Zhejiang, and Anhui provinces. Building a regional pattern with Beijing as the industry axis, and Tianjin and Hebei developing in a coordinated manner. Building GZ-SZ-HK and GZ-Zhuhai-Macau biopharma sci-tech innovation clusters with Guangzhou and Shenzhen

501、 at their core and based on the existing resources and expertise in Hong Kong and Macao.Strength Has the most diverse development of any region, with each city having its own unique characteristics, from biopharma and medical devices, to chemical medicines and traditional Chinese medicine. Home to n

502、umerous enterprises in life sciences and healthcare across the entire industrial chain, which brings comparative advantages in innovation and industry integration. With more biopharma talents, especially high-end overseas returnees, the accumulation of talents will contribute to more cutting-edge in

503、ternational innovation. Took the lead in regional integration development. Beijing, as the political center of China, has won the strongest policy support for the biopharma industry in Beijing-Tianjin-Hebei. Beijing-Tianjin-Hebei has several national medical institutions; compared with the other reg

504、ions, it has more advantages in cooperative development involving government, enterprises, and medical institutions, and its examination and approval system; the integration of infrastructure is relatively complete. Hong Kong and Macao have quite clear, well-established markets, and development with

505、in the Guangdong-Hong Kong-Macao GBA has fewer overlaps than the other two regions, which is conducive to direct cooperation with an appropriate division of labor and reducing internal competition. As favorable policies are introduced and many small biopharma enterprises settle in the region success

506、ively, the GBA has strong prospects.Weaknesses The product innovation types are highly overlapped in the Yangtze River Delta, leading to homogenization. Internal competition will become a barrier to integrated development in the future. Compared with Beijing-Tianjin-Hebei, the region needs to keep r

507、eforming and innovating its examination and approval system to continuously improve the commercialization rate of achievements by life sciences and healthcare enterprises. Facing the high cost of talent, how to retain talent and avoid outflows is a problem to be addressed. Regional resources are une

508、venly distributed with most concentrated in Beijing. This has partially inhibited the development of Tianjin and Hebei. Flow within the region still needs to be strengthened, and it is necessary to further plan and optimize the introduction and distribution of human resources. Talent acquisition is

509、a key challenge for biopharma industry development in this region. Local governments and enterprises need to plan to attract and develop talent. Compared with the Yangtze River Delta and Beijing-Tianjin-Hebei Region, the region faces a gap in the industrial chain, which requires further improvement.

510、 Imbalanced enterprise types lead to the absence of certain types of biopharma enterprises, such as CRO and CDMO.Future development Rich industrial chains bring more possibilities for development. The focus will be on integrated development, as well as industrial deepening and institutional reform t

511、aking reference from international standards. As a hub for high-end biopharma talent in China, controlling talent cost and the development environment will be the key. The focus should be on removing regional barriers, rationally planning the industry layout, and actively coordinating connections be

512、tween different areas. In terms of talent attraction, the environment of the Yangtze River Delta can be used as a reference to reinforce talent attraction and long-term maintenance using appealing policies and solid resources. Should focus on removing barriers in its administrative system and advanc

513、ing diversification. Should introduce more types of enterprises and diverse talent to the biopharma industry to catch up with the Yangtze River Delta and Beijing-Tianjin-Hebei in development.Outlook on biopharma innovation trends in China | 4. Innovative biopharma development in the Yangtze River De

514、lta66Outlook on biopharma innovation trends in China | 5. Challenges and suggestions for biopharma innovation in China675. Challenges and Suggestions for biopharma innovation in China Chinas biopharma industry has seen dramatic development in recent years. Global and domestic biopharma companies are

515、 expanding their footprints in the country, while cross-sectoral players are swarming into the industry. Government agencies are working with the biopharma innovation ecosystem to create a conducive environment for the innovative development of domestic biopharma enterprises, showing their commitmen

516、t to transform China from a great generics manufacturer into a pharmaceuticals innovator, and even a global pharmaceuticals powerhouse, in the coming years. Meanwhile, the Yangtze River Delta, with its booming biopharma sector, not only exports innovation to national biopharma enterprises, but also

517、connects Chinese enterprises with innovative biopharma development across the world. More innovative cooperation between China and the rest of the world is expected to generate continuous breakthroughs and propel the global biopharma industry to a higher level.Factors driving innovation in Chinas bi

518、opharma industry Policy and system reforms strengthen innovative R&D and accelerate commercialization: Government policies and regulatory reform can drive the innovative development of Chinas biopharma industry, guiding its transformation towards innovative R&D and opening multiple channels of suppo

519、rt for the commercialization of innovative products. Capital continues to flow into the biopharma industry: Capital continues to flow into the biopharma industry and investment by government and enterprises is increasing. In addition, Chapter 18A of the HKEX listing regime, and new systems on the SS

520、E STAR Market and NASDAQ have created more financing channels for pre-profit biopharma enterprises in China. Digital technologies shorten the R&D cycle: The flexible application of digital technology is addressing the historical bugbear of the biopharma industryits long R&D cycle. Chinas unique digi

521、tal technologiesfrom AI applications in predicting new protein models to accurate collection of clinical big dataare powerful accelerants of biopharma innovation. Accelerated return of top talent enabling Chinas biopharma industry to break through barriers to innovation: COVID-19 and China-US trade

522、tensions have prompted the return of high-end biopharma talent to China, forming the backbone of sector upgrades and innovation. The return of talent to the Yangtze River Delta has made it the center of R&D and innovation in Chinas biopharma industry. Challenges to innovation in Chinas biopharma ind

523、ustry Basic research remains weak: Development of Chinas biopharma industry has tended to be in fast-follow mode, with insufficient attention paid to basic research. As a result, China has a small cohort of top basic research talent and few original scientific research achievements. Although China p

524、roduces more scientific papers than anywhere else in the world, first in terms of the number of papers, it lags in the international pharmaceutical powerhouses in the number of papers published in top biopharma industry journals such as The Lancet, Nature, and Cell. Commercialization of research ach

525、ievements needs to be strengthened: The commercialization challenge in Chinas biopharma industry is mainly due to a lack of evaluation standards and commercialization expertise. This hinders the development of original, innovative innovation products and leads to homogenous innovation.Outlook on bio

526、pharma innovation trends in China | 5. Challenges and suggestions for biopharma innovation in China68(3) Recommendations for innovative development of Chinas biopharma industryGovernmentInvestors and enterprisesConduct more basic research to consolidate the foundation for innovative development Cons

527、truction of the basic research system should be strengthened to ensure the output of high-quality original achievements. The attribution and cleaning of clinical data should be regulated by laws and regulations to promote the transfer of clinical data to public ownership, so a more comprehensive cli

528、nical database will become available at the basic research stage. Institutional investors should build more professional teams in biopharma technology support promising biopharma innovation projects at an earlier basic research stage and thereby facilitate smooth development of R&D.Work harder to co

529、mmercialize research achievements to ensure the smooth commercialization of more research achievements An evaluation system for the commercialization of scientific research achievements at the national level should be established, setting high thresholds to enhance innovation. More opportunities for

530、 patent addition should be provided to more comprehensively protect new discoveries derived from innovative R&D. Enterprises should actively participate in commercialization research, provide services across the whole industrial chain such as production services, medicine registration, clinical cons

531、ultation, etc. in the commercialization of scientific research achievements, assist research institutes in gaining insights into market demand, carry out targeted initiation of new scientific research projects, and obtain the rights of transferees related to products after commercialization.Build a

532、robust talent pipeline by attracting international talents and cultivating local young ones The government should promote talent development, developing all-round biopharma talent starting from university education, attaching equal importance to the technology and management, and enhancing the devel

533、opment of young talents. More efforts should be made to attract overseas talents to return to China by providing support such as preferential visa treatment, easier access to settlement, and other support to ensure a smooth transition. Enterprises should introduce talent referral rewards for existin

534、g talent, accurately recruit the talent they lack, and improve the efficiency of candidate screening.The government and investment institutions should cooperate to inject funds to commission innovative studies and enhance the professionalism of investment in the biopharma sector The government shoul

535、d take the lead in undertaking the investment risk of original innovation, especially given the social benefits from the successful development and launch of original innovative biopharmaceuticals and should guide commercial investment institutions to invest in original innovation projects. Investor

536、s should be well prepared to make long-term investments and recruit a professional biopharma team to better evaluate innovation projects. Investees should become more proactive to dynamically update commercialization and product development with investors to maintain long-term cooperative relationsh

537、ips and mutual trust. Insufficient innovative talent: Biopharma has high technological barriers, and technical talent is key to innovative R&D. However, there is not enough high-end biopharma talent in China to meet rapidly growing demand and R&D costs, including the cost of personnel is rising. Att

538、itudes towards risk and return on innovative biopharma innovation studies need adjustment: Institutional investors in China tend to focus on fast monetization, which conflicts with biopharmas long R&D cycle and risk of failure. This means many innovative biopharma studies have no access to investmen

539、t or their access to funding is uncertain.Outlook on biopharma innovation trends in China | 5. Challenges and suggestions for biopharma innovation in China69(4) Future breakthroughs and development recommendations for innovative biopharma development in the Yangtze River DeltaGovernmentInvestors and

540、 enterprisesIndustry layout Government should define the positioning of each province in the Yangtze River Delta and make Shanghai the scientific and technological leader. Shanghai should drive the development of coordinated production and manufacturing in Jiangsu, Zhejiang, and Anhui while going gl

541、obal itself. Promote integrated development. Each area should build on its own strengths to expand the advantages of its industrial chain, reduce internal competition, and boost overall development of the biopharma industry in the Yangtze River Delta. Enterprises should shift their focus from indivi

542、dual provinces to the integrated region, allocating the functions in each link of biopharma innovation and development to appropriate areas, leveraging the advantages of each area, and building industrial chains or carrying out cooperation within the region according to their needs, thereby enhancin

543、g the development of the regional industrial chain.Government-enterprise cooperation Government should increase investment in basic and commercialization research at biopharma colleges and universities and vigorously facilitate communication between researchers and enterprises to promote commerciali

544、zation of scientific achievements. The industry players should focus on the front end, increase support for basic and commercialization research, and invest at earlier stages. By doing this, companies can better explore early-stage innovative R&D projects with commercial potential.Talent development

545、 The government should roll out targeted policies to attract more overseas talent to the Yangtze River Delta. The favorable policies include preferential visa treatment, family subsidies, and school access channels, etc. The government should promote the cultivation of young talent and local employm

546、ent, and formulate more targeted policies in settlement, housing, salaries, living allowances, etc. to support young talent. Enterprises should use the abundant resources of biopharma colleges in the Yangtze River Delta to conduct targeted talent development. By cooperating with universities and col

547、leges to establish collaborative projects or schools, enterprises can participate in developing the talent they need at an earlier stage, creating long-term, stable support for innovative development.Outlook on biopharma innovation trends in China | 5. Challenges and suggestions for biopharma innova

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580、uble, Yicai, 长三角多地敲定生物医药产业新目标， 带动企业新增量近乎翻倍 (), February 2021Outlook on biopharma innovation trends in China | Endnotes7359. Yangtze River Delta sub-center for national drug and medical device technical evaluation and inspection is established in Shanghai, PRC Government, 国家药品医疗器械技术审评检查长三角分中心在上海成立_滚动

581、新闻_中国政府网 (), December 202060. Human Resources Integrated Development Forum for Biopharma Industry of the Yangtze River Delta is Held, The Paper, 长三角生物医药产业人力资源融合发展论坛召开 (), December 202061. Yangtze River Delta Integrated Development Demonstration Zone promotes cross-provincial recognition of foreign h

582、igh-end talent, Xinhuanet, 长三角一体化示范区推进外国高端人才跨省互认-新华网 (), September 202062. Wind Info63. Hsmap, Research on the policies for biopharma industry in the Yangtze River Delta, 长三角地区生物医药产业政策研究 (), October 202064. Transcript of the press conference to interpret Several Policies for Supporting the High-qual

583、ity Development of Biopharma Industry by the Information Office of the Peoples Government of Hebei Province, Sina Medicine, 河北省政府新闻办解读关于支持生物医药产业高质量发展的若干政策新闻发布会文字实录|医疗器械|政策措施_新浪新闻 (), November 201965. Hmsap, Research on the integrated innovation and development of the biopharma industry in Beijing-Ti

584、anjin-Hebei Region, Sina News, 京津冀地区生物医药产业协同创新发展研究_新浪医药新闻 (), December 202066. A series of biopharma policies in the Guangdong-Hong Kong-Macao Greater Bay Area provide favorable factors to boost the development of the industry, 21st Century Business Herald, 粤港澳大湾区生物医药政策频出 多种利好释放助推产业发展_中证网 (), Februa

585、ry 201967. Hsmap, Research on the integrated innovation and development of biopharma industry in Guangdong-Hong Kong-Macao Greater Bay Area, 粤港澳大湾区生物医药产业协同创新发展研究 (), March 202168. Pharmcube, Competent Authorities in the Guangdong-Hong Kong-Macao Greater Bay Area jointly roll out 10 measures for the

586、biopharma innovation and development, 粤港澳大湾区联动， 10条新政布局生物医药创新发展 (), April 2020Outlook on biopharma innovation trends in China | Endnotes74AcknowledgementsThe project team extends its heartfelt appreciation to the following experts for sharing their insights during the compilation of this report (in

587、family name alphabetical order)Bin Li, Distinguished Professor and Doctoral Supervisor, Shanghai Jiaotong University; Deputy Director, Shanghai Institute of Immunology, Shanghai Jiaotong University School of MedicineRichard Mao, Managing Director for Medical Investment, Orchid Asia Ruilin Song, Exec

588、utive Chairman, China Pharmaceutical Innovation and Research Development AssociationKenneth Sun, Managing Director, Medical Industry Team, Investment Banking Division of Morgan Stanley Asia-PacificYingfei Wei, Chief Science Officer, Innoforce PharmaceuticalsJason Yang, Chief Medical Officer, CStone

589、PharmaceuticalsShengli Yang, Academician, Chinese Academy of Engineering; Researcher, Shanghai Institute of Life Sciences, Chinese Academy of SciencesGuoliang Yu, Founder, Innoforce PharmaceuticalsIngrid Zhang, President, Novartis Pharmaceuticals ChinaOutlook on biopharma innovation trends in China

590、| AcknowledgementsJens Ewert Industry LeaderChina Life Sciences & Health CareEmail: Sitao Xu Partner China Chief EconomistEmail: Lawrence JinAudit & Assurance LeaderChina Life Sciences & Health CareEmail: Andrew Yu Consulting LeaderChina Life Sciences & Health CareEmail: Bill YangFinancial Advisory

591、LeaderChina Life Sciences & Health CareEmail: Lydia Chen PartnerChina Research & Insight CenterEmail: Tony Lin Assistant Manager China Research & Insight Center Email: Travis Zhu Risk Advisory LeaderChina Life Sciences & Health CareEmail: James Zhao Tax and Legal LeaderChina Life Sciences & Health C

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