With the development of the past two decades, China's biopharmaceutical industry has grown into a rising star in my country's pharmaceutical industry. So far, my country has made certain achievements in biopharmaceutical research, and the preliminary pattern of the biopharmaceutical industry has been formed.
1. Analysis of innovation capabilities
1. Top 10 basic R&D capabilities in the world
Like the United States, China’s biopharmaceutical industry is based on universities and public research institutions. Research activities are established, and both research projects are completed with government funding. Funding channels include the National Natural Science Foundation, the High Technology Research and Development Program (863 Program), the National Key Laboratory Program, etc. In the more than 20 years since its establishment, the National Natural Science Foundation of China’s annual funding to the fields of life sciences and biotechnology has accounted for about one-third of its total funding. In the National Key Laboratory Plan, the number of key laboratories in the field of life sciences and biotechnology ranks first among the seven major scientific fields, accounting for 23.5% of the total. In the China High-tech Research and Development Plan (863 Plan) promoted by the Ministry of Science and Technology, biotechnology accounts for more than a quarter of the total funding in the civilian field.
In recent years, China has made certain achievements in basic research and development in the field of biopharmaceuticals. In terms of the number of published papers and the number of citations, China ranks among the top ten. The Chinese Academy of Sciences is also the only country outside the United States to be selected into the top ten for the number of published papers. research institutions.
2. How do you view the innovation capabilities of China’s biopharmaceutical industry?
Although China’s biopharmaceutical industry is at the forefront of the world in basic R&D, from the corporate level, the industry’s R&D level is lower than most Investors have the impression of "imitation". Regarding this point, we believe:
(1) Technological innovation has a "threshold effect". Currently, Chinese biopharmaceutical companies do not have this scale
According to the perspective of innovation economics, technological innovation follows the "threshold theory", that is, only when R&D resources are concentrated to a certain extent can R&D results be stably output. As we all know, new drug research is a high-investment, high-risk, long-cycle process. my country's biopharmaceutical companies are generally small in scale and have low sales revenue. Even if R&D investment accounts for a high proportion of sales revenue, its absolute value is still very small, especially in the field of technology. The industrialization of R&D has obvious scale effects. It is extremely difficult for a single company to invest heavily in innovative drug research. This is one of the reasons why my country's biopharmaceutical companies have little original research, many generic products, and repetitive product production.
Looking at the development of the U.S. biopharmaceutical industry, it is common for a large number of small biopharmaceutical companies to be unable to obtain financial support. Judging from the development history of successful biopharmaceutical companies, the active participation of capital markets, venture capital, and traditional large-scale chemical pharmaceutical companies are important reasons for their development and growth. In these aspects, China is at the division-level development stage. Like other emerging industries in the early stages of development, industrial investment in the biopharmaceutical industry is often accompanied by pain, twists and turns, loneliness and endurance, but who would deny that this is an industry full of hope? The same goes for investments in secondary markets in the biopharmaceutical industry.
(2) Introduction, digestion and absorption are insurmountable processes of technological innovation
Developed economies such as the United States and Japan all have the process of introduction, digestion and absorption in the process of independent innovation. As a rising country, China cannot overcome this process. Although China's biopharmaceutical industry is one of the industries with high technological innovation activity, it still lags behind developed countries in terms of R&D intensity. Therefore, this is also This determines that the current research and development in the biopharmaceutical industry is still dominated by generics.
In the field of biotechnology drugs, biosimilars are defined as generic drugs in the biotechnology or biological field that are no longer protected by intellectual property rights. Traditionally speaking, biosimilars can use the existing clinical data of their brand-name drugs to make simplified applications to shorten the time required to enter the market as much as possible. The prerequisite is that their dosage form, dosage and administration method are the same as those of the brand-name drugs. Must also be consistent.
In fact, recombinant drug generics are far more complex than small molecule drugs. Unlike small molecule drugs, even if the same gene is expressed in the same type of cells and uses similar processing methods, recombinant drug generics It is also difficult to guarantee that they are exactly the same as the original drugs. Production costs and the complexity of the processing process are the main considerations. Therefore, for some domestic generic drug products, such as recombinant human insulin, large-scale industrialization is a technical barrier for enterprises.
2. Confusion about industrialization
1. Thinking about industrial models
The conversion rate of my country’s biopharmaceutical scientific and technological achievements is only 0.5%. The underlying reason is the scientific research achievements industrialization model issues. Generally, the transformation of biotechnology scientific and technological achievements goes through three stages: research and development, pilot testing, and mass production. The international capital investment ratio for these three stages is 1:10:100, but in our country it is only 1:0.7:100. The national Research investment in the field of life sciences mainly goes to scientific research institutions. There is an unreasonable investment structure problem in the transformation of scientific and technological achievements. This is also the main reason that currently restricts the development of my country's biopharmaceutical industry.
Like the United States, quite a few biological companies in our country are founded by universities, public research institutions or their scientific researchers. For example, the Chinese Center for Disease Control founded and participated in the establishment of 6 biopharmaceutical companies under the leadership of Academician Hou Yunde. Because scientific researchers are not good at business management, there are management bottlenecks in business development. This was also the case initially in the United States, but venture capital and traditional big pharma played a very important role in this. Large pharmaceutical companies cooperate with biopharmaceutical companies through mergers and acquisitions, external alliances, or licensing, and support them at multiple levels such as funding, management, and marketing. It is an inevitable trend for my country's pharmaceutical industry to improve its innovation capabilities and competitiveness by establishing its own research institutions or cooperating with other biotechnology companies.
2. Financing channels
Since 2002, the ability of my country's biotechnology industry to attract venture capital has declined sharply. In the past five years, 1,080 companies in my country have attracted US$5 billion in venture capital investment, but the biopharmaceutical industry only accounts for 5.2% of the total financing.
The development of venture capital in my country is faced with the influence of environment, mechanism, law and other factors, and a complete system has not yet been formed.
The structure of my country's capital market is not perfect, but this situation is gradually changing. The new securities law has revised the listing requirements for companies to a total share capital of 30 million shares, canceled the requirement of three consecutive years of profits, and reduced The threshold is conducive to the issuance and listing of some companies with high growth potential but currently small scale and poor performance.
Judging from the development history of the U.S. biopharmaceutical industry, the Nasdaq market has contributed a lot. During the two sessions of our country this year, there was a strong call for the proposal to launch the GEM as soon as possible. Although the final listing details have not yet been released, the launch of the GEM is on the line. What is certain is that the listing conditions of the GEM are lower than those of the main board and are more flexible and loose. , which will be a big plus for biopharmaceutical companies that are in the overall investment period.
3. Discussion on the development direction
1. China’s development model is more similar to the United States
Comparing the development models of the biopharmaceutical industry in various countries, China is more similar to the United States. The reasons are as follows:
(1) In terms of R&D level and industrialization level, China is generally in the first stage of the United States, that is, the stage of "using genetic engineering processing technology to produce proteins", but China is in a certain stage. Some technical fields, such as drug molecule design, have reached the third stage and are at the forefront of the world. What is worth mentioning here is the therapeutic hepatitis B vaccine. Similar to the United States, China has a large number of small biotechnology companies that were born out of scientific research institutions, and most of their founders and managers are scientific researchers. Judging from the situation in Europe and Japan, Europe lags behind the United States in basic biotechnology research and development. European biotechnology innovations are mostly carried out by R&D teams within large companies, which is quite different from the independent small companies in the United States. Japan is even weaker in basic research and development, and the main application area of ??biotechnology is fermentation.
(2) Judging from the situation of the national innovation system, the United States has always invested heavily in basic research and development of scientific research institutions and attached great importance to it. This is also one of the main reasons why the United States was able to take the lead in making breakthroughs. China also attaches great importance to basic scientific research in life sciences, and its investment in this field ranks first among all disciplines.
2. Recombinant protein drugs still occupy the mainstream, and there will be breakthroughs in some areas
We divide biopharmaceutical companies into two main categories: "Production using genetic engineering processing technology" Protein" companies and companies that "use advanced technologies in the field of genetics and molecular biology as research tools." The former category is represented by Amgen, and the latter category is represented by Genentech.
(1) Use genetic engineering processing technology to produce proteins
In the next 5-10 years, recombinant proteins will still be the mainstream in China's biopharmaceutical field, which is in line with the world's biopharmaceutical field. Development trends are consistent. The research and development directions of this type of drugs can be divided into three major categories: tracking research and development, improved research and development, and original research and development. Tracking R&D can be complete imitation or screening of new indications; improved R&D can make existing products safer (less side effects), effective, and long-lasting ( It is superior to the original product in terms of extended half-life, reduced dosage and frequency of use); original research and development is based on new genes and new molecular mechanisms of action. In the selection of R&D varieties, "blockbuster" products will still be the main starting point for research. This is not entirely due to the "rush" of domestic biopharmaceutical companies. From a global perspective, the existing "blockbuster" products Transformation of bomb protein drugs is a major development trend. For example, Aranesp, one of Amgen’s “Five Golden Flowers”, is actually a long-acting variety of Epogen.
Another noteworthy aspect is the increase in production capacity. Not only in China, the insufficient production capacity of the biopharmaceutical industry worldwide has become a bottleneck for the development of recombinant drugs. Insufficient production capacity leads to increased production costs, which limits industrialization to a certain extent. To put it another way, having advantages in production capacity is a barrier.
(2) Using advanced technologies in the field of genetics and molecular biology as research tools
This category has a wider scope and mainly refers to targeted research from the perspective of industrialization and domestic current situation. Drugs, including therapeutic monoclonal antibodies and therapeutic vaccines. Targeted drug development will be one of the main development directions of biopharmaceuticals in the future.
Domestic monoclonal antibody drugs are developing rapidly. There are 11 monoclonal antibody drugs on the market, of which 6 are self-developed in my country and 5 are in the clinical research stage. The injectable mouse-derived anti-human T lymphocyte CD3 antigen monoclonal antibody developed by the Wuhan Institute of Biological Products is the earliest domestically developed antibody approved for marketing; the new class I cancer treatment drug "Recombinant Human Source" jointly developed by Beijing Baitai Biotech and Cuba "Anti-human epidermal growth factor receptor monoclonal antibody" (trade name: Taixinsheng) is the first humanized monoclonal antibody drug approved in my country; Metuximab jointly developed by the Fourth Military Medical University and Chengdu Huashen Anti-injection (trade name: Licartin) is the world's first drug used to treat primary liver cancer, and it is also my country's first antibody drug with independent intellectual property rights.
The most anticipated achievement in the field of therapeutic vaccines in China is the therapeutic hepatitis B vaccine. Investors are advised to refer to our report "Unveiling the Therapeutic Hepatitis B Vaccine". Like the original therapeutic monoclonal antibodies, research and development in this field has been moving forward amid controversy, both at home and abroad. It is undeniable that this type of technology will become one of the future development directions of biotechnology with its excellent therapeutic principles. There may be twists and turns, and investors will also have to bear greater risks. But looking back at the short development history of the biopharmaceutical industry, controversy, twists and turns and risks always accompany each other, but who can stop the progress of this industry? Only by carefully studying and sharing the growth of the industry/company while the industry is moving forward in great waves.