China's biotech industry has become as much a challenger to America's technological leadership as China's artificial intelligence upstarts.
Big Pharma firms have cut license deals worth tens of billions of dollars for cancer drugs invented there, and some see the Chinese firms as the industry's trendsetters.
Investors had better pay heed, too. Along with early Nasdaq arrivals suhch as BeOne Medicines and Zai Lab, a host of up and comers have been lighting up Hong Kong's exchange, including Akeso, Sichuan Kelun Biotech, CSPC Pharmaceutical Group, Innovent Biologics, 3sBio, Jiangsu Hengrui Pharmaceuticals, WuXi Biologics, and many others.
AstraZeneca CEO Pascal Soriot says his company must learn to innovate at "Chinese speed." The UK-based pharma giant is investing billions in partnerships and research programs in China.
"What we're doing is collaborating, but we're also competing," Soriot said on Astra's July earnings call. "We're also learning from them in terms of how they develop products and how fast they operate, and we've made some changes in the way we operate."
AstraZeneca has teamed with Chinese innovators on a range of medicines. It recently licensed an inhaled drug for asthma and chronic obstructive pulmonary disease that's code-named TQC3721, from Sino BioPharmaceutical, as well as the oral targeted cancer drug Zegfrovy from Dizal Pharmaceutical. It is developing oral cancer drug Orpathys, with Hutchmed.
China's biotech engine is fueled by Western-trained entrepreneurs and government planning. Scientific research and clinical trials there are gaining global respect. But domestic sales in China don't allow for great profits, so the country's start-ups have needed Big Pharma's money to take their innovations abroad.
Among the products developed by Chinese start-ups are next-generation cancer drugs in two categories: bispecific antibodies that combine the features of standard drugs like Merck's Keytruda and Roche Holding's Avastin; and antibody-drug conjugates, or ADCs, which can pair a tumor-seeking antibody with a toxic chemotherapy payload.
A keenly watched bispecific is ivonescimab, developed by Akeso and licensed internationally by Summit Therapeutics, a U.S. start-up that has bet its future on the drug. Akeso has won approvals in China with studies showing the antibody to be an apparent improvement over Keytruda. Data from Summit's Phase 3 trial against lung cancer should start appearing before the year ends.
BristolMyers Squibb has a similar drug in clinical trials, as does Pfizer, which licensed its bispecific from 3sBio.
Merck, too, has a candidate in the same bispecific category, licensed from Shanghai-based LaNova Medicine. But for the moment, Merck is making a broader clinical trial push for the ADC sac-TMT, which it licensed from Kelun-Biotech.
An ADC dubbed Ris-Rez developed by Hansoh Pharmaceutical Group is in global Phase 3 trials by GlaxoSmithKline, against lung cancer. They have also gotten a Breakthrough Therapy Designation from U.S. regulators to test the drug against the most common bone cancer.
Bristol Myers is in Phase 3 lung cancer trials of iza-bren, a novel ADC it licensed from Sichuan Biokin Pharmaceutical.
Suzhou-based Innovent Biologics has several international collaborators. Since 2019, it has partnered with Eli Lilly on the Keytruda-like drug Tyvyt. It is developing a number of ADCs and other cancer drugs with Japan's Takeda Pharmaceutical. Pfizer agreed in March to work with the company on 12 new cancer medicines.
Lianyungang-based Jiangsu Hengrui also has plenty of partners. Last year, it licensed a drug for chronic obstructive pulmonary disease to GlaxoSmithKline. In May, it began collaborating with Bristol Myers on 13 programs in cancer, immunology, and other specialties.
An anticancer ADC from Hengrui is a key part of the pipeline at the U.S., biotech Ideaya Biosciences, which plans to start Phase 3 trials with the drug before year-end, against lung cancer. A similar ADC is already in Phase 3 testing for lung cancer, by Zai Lab, the Shanghai and Cambridge, Mass., firm that has a variety of medicines in global clinical trials.
With so many Chinese biotech products making their way here, it should come as no surprise that some U.S. congressmen have made noises about barring the door, the way they have for Chinese automobiles.
In 2024, several demanded an investigation of the rapidly growing WuXi Biologics and a sister company, arguing that it had ties to China's military. Last year, Congress passed the Biosecure Act which keeps some Chinese biotech companies from getting federal contracts and research money. None of these activities have slowed the partnering and licensing rush by Big Pharma.
China's advances in cancer medicine have even spurred medical tourists to go there for treatment. Those of us not faced with such a tough situation can still consider investing there.
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