4 May 2015
Asian Priorities Set to Dominate Future Growth of Biopharma Sector
With Asia now set to take a lead in the burgeoning biopharmaceutical sector, a very different set of challenges and priorities is emerging, according to exhibitors and attendees at Singapore's recent BioPharma Asia Convention 2015.
Asia represents the fastest growing market in the history of the biopharmaceutical industry. Overall, China is seen as leading the charge by the region's economies, a move fuelled by its burgeoning middle class, according to Dr Christopher Gallen, Chief Executiveof SK Biopharmaceuticals.
Addressing attendees at the BioPharma Asia Convention 2015 in Singapore, Gallen said: "Asia is already a huge market. By 2050, it will be home to another billion people, while Western populations will shrink. Already, China is the second-largest economy, with the second-largest R&D spending. It is expected to soon overtake the US on both counts.
"The other Asian markets are also expanding. This can be best seen in real GDP growth terms. China is by far the fastest growing in the world, with India second and Indonesia fourth. By comparison, GDP in the US and most European countries is actually shrinking."
According to Dr Gallen, the best measure of the market's potential came in terms of the growth of the middle class. Expanding on his view, he said: "The Asian middle class now has the money to spend on healthcare and there are considerable numbers of them, far outstripping the rich. Between now and 2030, the middle class in Asia will grow by a massive 571%, twice as many as the middle class of the rest of the world combined. In line with this, by 2030, as much as 70% of the world's spending on biopharma will come from Asia."
Fittingly, then, the BioPharma Asia Convention 2015 brought together many of the world's leading biopharmaceutical companies. The annual convention was launched as BioMedical Asia in 2008 and has attracted close to 20,000 attendees over the past eight years. Its avowed aim is to explore Asia's tapped and untapped markets and provide timely updates on the state of the biopharmaceutical industry in the region.
Ajay Gautam is AstraZenica's Executive Director and Head of Collaborations for Asia and the Emerging Markets. Emphasising just how much biopharma funding is now available outside the West, he said: "China, in particular, is seeing annual growth of 32%, while the West is seeing negative growth. Six countries are now spending more than US$400 million a year in public biomedical R&D – Brazil, China, Israel, South Korea, Russia and Singapore. There's also a lot of talent coming back to Asia from the West.
"As yet, though, there's no eco-system like there is in San Francisco or Boston. The cities I expect to get there by 2020-25 are Beijing, Shanghai and Suzhou in China, and Bangalore, Seoul, Singapore and Tel Aviv in the rest of the world."
Emphasising the important role likely to be played by China in particular, Shaun Rein, Founder and Managing Director of the China Market Research Group, said: "For the past 30 years, there has not been much innovation in China but, for various reasons, this is now changing.
"One area where we can expect innovation is in biotech, as that is not seen as politically sensitive. The funding is there, the political support is there, but the support from bureaucrats is not yet in place. The crackdown on corruption, for example, means procurement processes are now stalled until new policies are put into place."
Given Asia's ascendancy, Ajarananda Vijayasimha, Chief Executive and Managing Director of OneBreath Inc, a California-based supplier of medical ventilators, emphasised that the continent's priorities were very different from those of the West. He said: "We have to deal with communicable and lifestyle diseases, as well as new emerging diseases. We have weak infrastructure, poor human skills, and a lack of public funds.
"The technologies developed in the West are not necessarily applicable here. Hypertension screening in India, for example, requires electricity, something which is not always available in the outlying villages. The equipment is expensive, needs spare parts and needs trained personnel.
"There are many challenges facing those trying to implement innovative new solutions. A problem comes in terms of governmental policy, which do not always foster innovation, particularly in terms of poor IP protection. Academia and other stakeholders also need to help build the eco-system – in business processes and practices, in particular."
Bill Hanlon, Vice-president and Head of Global Regulatory Affairs for Covance, a New Jersey-based drug development facilitator was one of a number of delegates at the convention who believed there was a distinct regulatory issue emerging in China. He said: "Of the 140 new drugs available in 2011, 91 were approved in the US but only 14 in China. Usually, companies focus on the US and Europe first, then seek approval elsewhere. China, though, requires additional trials before approval, but it's possible to shorten the process by including Chinese patients in trials. Chinese companies, though, have a shorter pathway, which means co-development is the way forward. In the future, it's likely that new drugs will be developed first in China, as the US and Europe do not have the same regulatory barrier."
Sounding a cautionary note, though, was Indranil Bagchi, Vice-president and Head of Payer Insights and Access for Pfizer, the New York-based pharmaceutical giant, who maintained the industry needed to explore just how to cut costs as the global demographic changed. He said: "Globally, the industry is faced with diminishing returns on innovation, and aging populations and falling birth rates, which means more and more expensive treatments paid for by a shrinking tax base. Increasingly, savvy patients are partly driving their own healthcare. So, in addition to our normal criteria – is the drug safe, efficacious, and of high quality? – the industry also needs to find ways to cut costs.
"While meeting the needs of regulators, companies need to ask themselves: can we afford to offer a particular drug, and is a certain treatment a priority for a particular market? I'm seeing a reduced incentive in the industry to invest in R&D and this will have an impact on quality and safety and even cause product shortages."
On a more positive note, Dr Victor Li, Executive Director of Beijing-based Yisheng Biopharma, was at the event to try and identify new collaborative partners, find licences for new vaccines in China and Southeast Asia and, of course, to learn. He said: "Yisheng has been growing organically for the past 10 years and received its first equity funding in 2012 from a US private equity fund.
"We're focussed on treatments relevant to Asia. In 2014, we began a Hepatitis B vaccine trial in Singapore. Rabies is another priority. While not an issue in the West, in places like India it kills 50,000 a year and 1,000 in China. The current vaccine doesn't really work and China is only able to produce 2% of the vaccine it actually needs. We are optimistic that we can develop a new solution."
Wang Zhengqian, Suzhou Connect Biopharmaceuticals' representative at the event, said his company was in Singapore to look for investors in its pre-trials and clinical trials, to seek partners for its China operations, and to look at ways of safeguarding its commercialisation rights outside of China. He said: "We have one clinical trial under way, with three more planned for various autoimmune diseases. Trials are also in the works for psoriasis, which affects 6.5 million people in China; asthma, which affects 30 million; and dermatitis, which affects 45 million."
Another company looking for licencing partners at the convention was Stempeutics, a Bangalore-based stem cell research company. Explaining his company's objectives, B.N. Manohar, Managing Director and Chief Executive said: "Our goal is to serve India first, then the rest of the world. Currently, we are transitioning from being an R&D company to being a commercial enterprise.
"Our Stempeucel drug [for the treatment of Buerger's disease] has just received a US patent and we have partnered with Lonza for commercial-scale production. Stempeucel is the only product currently derived from the bone marrow of a pool of donors. From just three donors, we are able to culture one million doses.
"At present, we are anticipating May 2015 approval for the treatment of Buerger's disease across India. Buerger's affects one million Indians and there is currently a shortage of treatments [for this condition] available. After Buerger's, we are planning to expand into the treatment of other diseases. Our roadmap is India, Japan, Europe, then the US and Asia."
Another company aiming to make a big impact is Moderna Therapeutics, a Massachusetts-based drug development company. Explaining the breakthrough his company had made with its modified messenger RNA (mRNA) Therapeutics, Stéphane Bancel, the company's President and Chief Executive, said: "We are at the start of a 20-year curve that will revolutionise medicine. We are able to design a new drug in minutes, and deliver the culture to a clinician in weeks. We are spending US$100 million a year on this new technology.
"We have several key partnerships that will get the new drugs to market quickly, including a US$240 million partnership with AstraZeneca, US$100 million with Alexion, and US$50 million with Merck. Currently, we have 56 trials under way and expect to move five to six of these to commercialisation Biopharma Asia: Attracting 20,000 attendees over its eight iterations."
The BioPharma Asia Convention 2015 took place from 23-26 March at Singapore's Suntec Convention and Exhibition Centre.
Ronald Hee, Special Correspondent, Singapore