China's Innovative Pharma Landscape: Companies Currently Conducting R&D in China

Several pharmaceutical companies are actively growing pipelines of their own in China, although at present the cumulative R&D expenditure of all Chinese pharma businesses amount to less than the spent of a single multinational corporation (MNC) in the West. Almost all the businesses to date started off as generics producers who used existing cash flows and pharma positioning to move into the local innovative sector. Furthermore, whilst previously 90% of all pharma were state-owned, today roughly 6 out of 10 are already private.

A downside to local Rx businesses most often quoted by VCs and investors is the inexperienced approach to R&D and clinical trials: many companies have burned cash with little consideration or understanding of regulatory approval prognosis. In addition, the frame of mind of Chinese businesses still suffers from relative short-sightedness when it comes to achieving success: many investors and executives do not yet appreciate the difficult-to-fathom time span of drug development. Unlike in the US VC arena, where early-stage deals are widespread, in China the lack of confidence and immaturity of the industry push investor confidence towards later-stage and established players, particularly ones which have previously received product approval.  

Some of the current drug developers in China are presented in the table below It is noteworthy that, to date, only one Chinese product has gained FDA approval—Levonest, a non-patented compound marketed by Novast Pharmaceuticals. Despite several Chinese INDs currently undergoing clinical trials in the US, all other products mentioned below have only thus far been approved by the SFDA.

Company Name	Est.	Location	Public/Private	Main products/leads	MNC partners
Novast Pharmaceuticals Ltd	2005	Nantong, Jiangsu & Sterling, VA, USA	Private; Venture-backed: Bioveda China Fund, Lilly Asian Ventures, New Enterprise Associates, SAIF partners, Sequoia Capital	Generics; First and only FDA-approved Chinese ANDA available in USA:  Levonest (levonorgestrel and ethinyl estradiol); pipeline under construction.	Eli Lilly
C & O Pharmaceutical Technology Holdings	1981	Hong Kong; Wide distribution across China	Public (SIN:COPT)—current subsidiary of Shionogi & Co (Japan) and associate company of Sumimoto Corp (Japan)	Generics; Three potential Category 1* leads: anti-Hepatitis B, an immuno-enhancer, and antibiotic targeting resistant bacterial pathogens.	Optimer Pharma
Harbin Pharmaceutical Group	1986	Harbin; Wide distribution across China	State-owned; US$ 250 million invested by Warburg Pincus (NY) and Citic Capital (HK)	One of three largest pharma companies in China. Generics; Aim to spend 5% on R&D annually in the near future.	None
China Shijiazhuang Pharma Group (CSPC)	1997	Shijiazhuang Hebei;  Wide distribution across China	Private	Butylphthalide (NBP)—a compound derived from celery seeds, acquired from Chinese Academy of Medical Sciences and indicated for the treatment of mild and moderate acute ischemic stroke; approved by the SFDA in 2002.	None
Sinovac Biotech Ltd.	2001	Beijing	Public (AMEX:SVA)	Most established vaccine producer in China. Major products, vaccines against: Hepatitis A&B, SARS, Mumps, Rubella, Rabies, H5N1 & H1N1 influenza, all approved by SFDA for marketing in China. Pipeline consists of: Hand, foot & mouth disease vaccine, Pneumococcal conjugate vaccine, Rotavirus, Chickenpox, Viral Meningitis vaccines. Being largest vaccine maker in China, Sinovac highly likely to benefit from new US$ 125 billion healthcare budget & become standard provider in new hospitals being built.	None
Zensun (Shanghai) Sci & Tech Co., Ltd	2000	Shanghai; San Diego, CA, USA	Private; State-backed; Anticipating NASDAQ/London IPO within 2 years	Marketed and SFDA-approved products: Recombinant Human Neureglin-1 for the treatment of heart failure; Recombinant Human ErbB3 vaccine against tumors—both anticipating FDA approval & currently in USA clinical trials. Pipeline includes vaccines to overcome immunosuppression and small cell lung cancer antibodies	None
Sihuan Pharmaceutical Holdings Group Ltd	2001	Tongzhou, wide distribution across China	Public; Multiple stock exchanges: (HKSE:0460), (Berlin:TEL1)	Generics: largest cardio-cerebral vascular drug franchise; IND in development: Tylerdipine Hydrochloride—calcium channel blocker for hypertension, accepted for clinical trials by SFDA, FDA IND application pending.	None
Simcere Pharmaceutical Group (also trademarked as Zailin, Yingtaiqing and Bicun)	1995	Nanjing; wide distribution across China	Public (NYSE:SCR)	45 Generic products; 6% of total annual revenue dedicated to R&D; 5 IND applications filed to the SFDA since 2010 in oncology, cerebrovascular and cardiovascular areas.	Merck (joint venture); Bristol-Myers Squibb (partnership in oncology)
SinoPharm: China National Pharmaceutical Group Corporation	1998	Shanghai; wide distribution across China	State-owned; Major public subsidiaries: Sinopharm Group (HKSE:1099); China National Medicines (SHA:600511); Beijing Biological (SHA: 600161)	Largest pharma group in China (distribution, logistics, retail, R&D); specializing in generics and traditional medicines; intent on becoming innovative through acquisitions, MNC partnerships & franchising	Merck partnership in vaccine development; Rare disease research partnership with Sanofi
VenturePharm Laboratories Ltd	1998	Beijing	Public (HKSE:8225)	Services provider & Products; Main business centered around CSO/CRO/CMO services, but growing own pipeline	None
Shaanxi Bicon Pharmaceutical	1997	Shaanxi; Wide distribution across China	Private; Venture-backed	Generics and Traditional Medicines; Recent PAG-Asia US$ 250 Million investment due to be directed towards R&D centre construction	None
3SBio: Shenyang Sunshine Pharmaceutical	1993	Shenyang	Public (NASDAQ:SSRX) (Prospects of going private in near future)	Substantial number of protein-based products and leads obtained through in-licensing and in-house R&D: 4 genetically-engineered protein-based products, 8 other protein-based products are in clinical trials or undergoing SFDA registration process	DaVita, AMAG Pharma & others
Yangtze Pharmaceutical Group	1971	Taizhou; San Francisco, CA	State-owned	Generics; US$ 500 million invested in R&D; US$ 30 million invested in an innovative research centre in Taizhou; ten products in the pipeline for neurological disorders	Leiden Bio Science Park, Netherlands
MicuRx Pharmaceutical	2007	Shanghai; Hayward, CA	Private; venture-backed by Morningside, HK	Drug discovery of antibiotics targeting antibiotic-resistant organisms	Pfizer
Cumencor Pharmaceutical	2009	Zheingjiang Hi-Tech Park	Private	Drug discovery of multiple resistant tuberculosis and other organisms	Pfizer
Chipscreen Bioscience	2001	Shenzhen Hi-Tech Industrial Park	Private; Venture-backed	7 leads in the pipeline targeting the areas of oncology, autoimmune disorders, diabetes	HUYA Bioscience, Quintiles
Hutchison China MediTech (Chi-Med)	2002	Shanghai	Public (LON:HCM); Venture-backed	Pipeline of 8 products based on traditional Chinese medicine, in the areas of oncology and inflammatory disease	J&J, Eli Lilly, Merck, Procter & Gamble