On the other hand, the big bottlenecks to the success of biopharmaceuticals in China, according to Wang, do not relate to
the availability of outside service. These involve "the development of domestic innovative technologies with strong IP rights
and a promising market perspective." Chinese companies prefer to avoid using external services at early stages because confidential
technologies may be involved.
For the research-based innovative Chinese biopharmaceutical companies, such as 3S Bio and Shanghai Sunway, lack of effective
capital support service poses a major challenge, because large investments are required to develop novel biopharmaceuticals.
Shanghai Sunway's Dr. Liu says that the biggest obstacle is lack of funding due to limited venture capital (VC) services in
China, "Domestic companies are able to complete new biopharmaceutical R&D...However, for small biotechs, insufficient VC support
at early R&D stages, and a lack of link-up and transfer channels between VC's and long-term investors has placed hurdles in
front of domestic biotech development. For larger companies, tech transfer is the key [bottleneck] that inhibits development."
Dr. Lou of 3S Bio points out, "China certainly has a lot of money, but not for biopharmaceutical and biotech research companies,
which can't price their quality products at a reasonable level [due to price controls]. Therefore, additional management services
may be required."
EVOLVING SERVICES MODEL
Table 2. Some biopharmaceutical nonclinical service providers in China
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Today, there is a limited, but growing number of service providers in China (see Table 2). Services in China began with contract
research organization (CRO) services and low-risk discovery chemistry (lead optimization that might lead to claims on IP were
typically done in the US or EU).
Early entrants, such as WuXi PharmaTech, have grown, and this has led to many new entrants into the services sector. Several
of these companies are managed by "returnees." These additional services include animal pharmacology, good laboratory practice
(GLP) toxicology services, and various lead optimization service providers. However, these new entrants may not be achieving
the level of quality expected from a major international market participant.
GLP is a relatively new concept in China. It was only in January 2007 that all new drug safety evaluations were required to
be conducted in GLP-accredited laboratories. To date, only 23 laboratories in China have been granted GLP certifications by
the SFDA. These organizations are a part of state-owned organizations. Their levels of service differ in scope and technical
competence. Efforts are under way to bring facilities to GLP standards. However, currently, few laboratories have passed the
Association for Assessment and Accreditation of Laboratory Animal Care (AAALAC) standards. These include Nanjing Laboratory-Next
Century, Inc., National Research Center for New Drug Safety Evaluation (Shenyang), and AbMax Biotechnology Co., Ltd.
Also, there are no board-certified slide-reading pathologists in China. Many service providers also have limited real-world
experience. For example, a US CRO might start 150 studies per month, whereas its Chinese GLP preclinical counterpart may be
conducting 50 per year. There are also historical holdups. Many Chinese GLP facilities have experience in traditional chinese
medicine (TCM) but have limited experience with new chemical entities (NCEs) or new biologics entities (NBEs).
External service suppliers can offer a more efficient use of scarce resources and talent, which China's biopharmaceutical
industry currently lacks. The availability of quality services can optimize the use of these resources, and may help speed
China's industrial development.
Eric Langer is president of BioPlan Associates, Rockville, MD, 301.921.9074, elanger@bioplanassociates.com
Eliza Yibing Zhou is project director for research programs on China and India, yb_zhou@bioplanassociates.com
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