AstraZeneca announced three large-scale initiatives to advance Chinese healthcare innovation, including creating a $1bn fund that would mainly invest in local start-ups.
The initiatives, announced at the second annual China International Import Expo, will establish a new global research and development centre and an artificial intelligence innovation centre in Shanghai’s Jing’an district. Additionally, AstraZeneca will partner with state-owned investment bank China International Capital Corporation Limited (CICC) on creating a health industrial fund, according to a note the company published on November 6.
The Anglo-Swedish pharmaceutical company AstraZeneca’s expansion plan in China happens as foreign investment in the global biotechnology industry is on the rise.The number of global greenfield foreign investment projects undertaken in the biotechnology sector rose by 132.8% between 2014 and 2018, while estimated capital expenditure in this sector increased by 132% over the same period. The industry saw a record high 156 greenfield FDI projects into global biotechnology sector in 2018 after steadily increasing since 2014, shows greenfield investment monitor fDi Markets.
China also witnessed a boom in biotechnology industry. The country’s biotechnology sector attracted a record high of 13 greenfield FDI projects in 2018, marking a 116.7% increase from 2016. During the first nine months of 2019, China attracted six greenfield FDI projects with announced capital expenditure of $691m in the biotechnology sector, with US companies the most active investors during the period, finds fDi Markets.
AstraZeneca invested nine greenfield FDI projects in China since 2006, finds fDi Markets. China is the company’s second biggest destination market, behind the US. In the first three quarters of 2019, China accounted for 21% of AstraZeneca’s global sales with $3.691bn, a 30% rise in comparison to 2018, including $1.283bn generated in Q3, up 35% from a year ago, shows AstraZeneca’s year-to-date and Q3 2019 results announcement.
“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,” said Pascal Soriot, chief executive officer at AstraZeneca, in the statement.
With the target of strengthening connections between China and other markets in the field of healthcare innovation, AstraZeneca’s fund aims to support the small and medium-sized healthcare innovation enterprises to help them achieve substantial growth in China, and to export domestic innovations that benefit patients worldwide, explained Leon Wang, executive vice president of CICC.
Most Chinese pharmaceutical innovation has been copycat products in the last three to four years, but AstraZeneca’s fund aims to give their Chinese team the leadership of some global programmes to see “first-in-class innovation”, acknowledged Pascal Soriot, when interviewed by the Financial Times.