AstraZeneca’s China headquarters at Shanghai Zhangjiang Hi-Tech Park

AstraZeneca said today it will create new R&D centers focused on drug development and artificial intelligence (AI) in Shanghai, as well as partner with state-run China International Capital Corporation Limited (CICC) to launch a potentially $1 billion fund whose investments will aim to advance innovation in China’s healthcare system.

“China is rapidly emerging as a global scientific powerhouse, which is why we have taken this exciting decision to follow the science, by expanding our R&D presence and by working with the investment community,” AstraZeneca president Pascal Soriot said in a statement. “We will make the most of our global resources and network to strengthen the connections between China and the rest of the world in the field of healthcare innovation and, ultimately, bring the benefits of that work to patients everywhere.”

Soriot joined AstraZeneca executives and Chinese dignitaries in announcing the company’s latest series of China initiatives at the 2nd annual China International Import Expo (CIIE) in Shanghai, being held through November 10. CIIE is an annual event created by the government of President Xi Jinping with the stated goals of promoting trade liberalization and economic globalization, as well as “ease market access for foreign investments.”

AstraZeneca will open a Global R&D Centre in the Jing’an district of central Shanghai that will carry out R&D for potential new innovative medicines. The center’s primary focus will be on diseases that are prevalent in China, as well as other parts of Asia.

The center will also aim to advance global medicine development and life-cycle management programs, and create new partnerships within companies and institutions in China’s emerging R&D ecosystem, AstraZeneca said.

Through the new center, AstraZeneca added, it plans to more than double its Shanghai R&D headcount to around 1,000.

21% of global sales

During the first nine months of this year, China accounted for 21% of AstraZeneca’s global sales with $3.691 billion, up 30% from a year ago—including $1.283 billion generated during Q3, a 35% year-over-year gain. New medicines represented 19% of China sales, up from 9% in 2018, primarily driven by two cancer drugs, kinase inhibitor Tagrisso® (osimertinib) and PARP inhibitor Lynparza® (olaparib), as well as blood thinner Brilinta® (ticagrelor) and type 2 diabetes treatment Farxiga® (dapagliflozin).

The Global R&D Centre also reflects one of China’s key priorities of biopharma of growing the industry beyond manufacturing toward more research and development of new treatments. According to state-run news agency Xinhua, China’s Ministry of Science and Technology in 2017 issued a special plan for biotechnology innovation—including up to 20 new science parks—in the country’s 13th Five-Year Plan, which commits the world’s most populous nation to expand biopharma to more than 4% of GDP by 2020.

AstraZeneca said its new AI Innovation Centre, also planned for Shanghai, will seek to capitalize on the latest digital technology in R&D, manufacturing, operations, and commercialization, with the aim of accelerating the delivery of medicines to patients in China and globally. Within the center, a dedicated group of professionals will focus on nurturing collaborations with technology companies and local startups.

In addition, AstraZeneca will partner with CICC, one of China’s leading investment banks, to create the Healthcare Industrial Fund. The fund will seek to drive innovation in China’s healthcare system by combining the bank’s investment and capital management experience with AstraZeneca’s expertise in healthcare.

The fund is being targeted to grow to $1 billion, and will initially support domestic companies and partners including those based in the Wuxi International Life Science Innovation Campus (I·Campus), which AstraZeneca and the government of Wuxi, China, officially opened in September, as well as international companies looking to establish a presence in China.

The fund will be the first and largest-scale healthcare industrial fund established by AstraZeneca, the company and CICC said.

Injecting “vitality”

“The new fund will inject vitality into the small and medium-sized healthcare innovation enterprises with promising development prospects, so that they can achieve substantial growth in China,” said CICC’s Leon Wang, executive vice president, international region and China president. “With this new commitment, AstraZeneca will further increase its contribution to the development of healthcare in China, and to exporting domestic innovations that benefit patients worldwide.”

The new fund and R&D centers were the highlights of a series of China-focused announcements by AstraZeneca. Other initiatives announced:

  • A licensing agreement of undisclosed value with Sun Pharmaceutical Industries to expand AstraZeneca’s China oncology portfolio by bringing novel treatments into the country.
  • Licensing agreements of undisclosed value with Ningbo Tai King Medical Technology for AZD3229, a KIT inhibitor for gastrointestinal stromal tumors (GIST); with Antengene for AZD0364, an Extracellular Receptor Kinase (ERK) 1/2 inhibitor for RAS/MAPK pathway mutant cancers; and with Abbisko for AZD4547, a fibroblast growth factor receptors (FGFR) inhibitor for FGFR-driven cancers.

AstraZeneca also said it will expand beyond its Chinese headquarters in Shanghai to establish five regional HQ sites in China, where it will also establish local commercial innovation centers. The five will be in Beijing (North region), Chengdu (West region), Guangzhou (South region), Hangzhou (East region), and Wuxi (Central region).

Wuxi’s National High-tech District in Jiangsu, China, is home to I·Campus, which was developed to bring together companies in the “4D” sectors of drugs, devices, diagnostics, and digital health companies with government, and medical and academic institutions together to help accelerate healthcare innovation and sciences in China by promoting open collaboration.

AstraZeneca disclosed the initial 10 companies based at I-Campus in September, and said today they will be joined by two new companies, Hong Kong-based Novoheart and U.K.-based Ninehealth.

Partnering with AstraZeneca in I-Campus are the UK BioIndustry Association (BIA), the Indian National Association for Software and Services companies (NASSCOM), the Russian Skolkovo Institute for Science & Technology, and the Hong Kong Society for Innovative Healthcare. They will be joined by the newest partner, Australian Trade and Investment Commission, which agreed during CIIE to promote exchanges and cooperation in life sciences with I-Campus.

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