What is the difference between innovation in China's pharmaceutical industry and multinational companies?

First, the number of
innovative drugs brought to market by Chinese and multinational pharmaceutical companies in the 10-year period from 2012 to 2021 is compared.
Among the top 20 multinational pharmaceutical companies, many had more than 15 approved drugs during this period, bringing the total number to market for a total of 313.

In contrast, the number of approvals for Chinese companies is generally less than 5, and the total number of approvals placed on the market is 31
.

However, the gap between Chinese and multinational companies in the number of clinical-stage products is narrowing, two factors
leading to the rapid growth of China's clinical-stage products.
First, leading traditional medicine companies such as Jiangsu Hengrui Pharmaceutical and CSPC Pharmaceutical Group are now shifting their focus from manufacturing to investing in the development of
innovative drugs.
It is worth noting that the number of clinical-stage products in Hengrui Pharmaceutical's pipeline has reached the median level
of the world's top 20 companies (66 products).
Secondly, leading innovative R&D-driven pharmaceutical companies such as BeiGene, Fosun Pharma, and Sinobiopharma have become the backbone of China's pharmaceutical industry
.

Figure 1 Clinical-stage products of the top 20 Chinese pharmaceutical companies and the top 20 global non-Chinese companies

In terms of therapeutic areas, top multinational pharmaceutical companies have more diverse product pipelines than Chinese companies, targeting a range of therapeutic areas
.
In contrast, many Chinese companies tend to focus on a single therapeutic area
.

In terms of R&D focus, oncology is a leader
in both China and multinational pharmaceutical companies.
Of the top 20 multinational companies, 12 have oncology as the largest therapeutic area in their clinical portfolio, accounting for 20-40%
of all drug candidates.
For Chinese companies, 9 of the top 20 companies have a proportion of oncology drugs above 40%, with BeiGene peaking at 83%.

Drug candidates in infectious diseases, neurology, immunology and respiration are more common
in the pipelines of multinational companies than in Chinese companies.

In terms of novel drug targets, for almost all of the top 20 multinational pharmaceutical companies, more than 50% of the drugs in their pipelines have novel MOAs
.
In contrast, among the top 20 Chinese companies, only BeiGene and Innovent Biopharma have pipelines, and more than half of their products have novel MOAs
.
For other Chinese companies, the percentage of new MOAs is less than 30%.

For example, while Hengrui has a competitive number of clinical-stage products, only 24% of its product candidates have novel MOAs
.

Figure 2| Summary of targets for each company's clinical-stage products

Finally, the positioning of each company in innovation and R&D was evaluated, and nearly half (9) of the top 20 multinational companies were located in the upper right quadrant (higher percentage of new MOAs and more clinical-stage products), while most of the top 20 companies in China were located in the lower left quadrant (lower percentage of new MOAs and fewer clinical-stage products).

The only exceptions are BeiGene, Innovent Biologics and Hengrui Pharmaceutical
.

Figure 3.
Evaluate the number and novelty of clinical stages in Chinese and multinational pharmaceutical companies

The fact that most of China's top pharmaceutical companies are lagging behind in investing in new targets or mechanisms may reflect a relatively conservative, risk-averse approach to pursuing innovative R&D
.
Nonetheless, the landscape of innovative R&D is likely to reshuffle with time and strategic pipeline planning
.
To move to the upper right quadrant, Chinese pharmaceutical companies have two possible paths
.
First, more companies can follow the example of biotech companies BeiGene and Innovent Biologics; That is, relying on the company's existing research and development capabilities and advantages to expand original research
.
In the short term, this approach may not produce a large number of novel candidates, but in time it will allow companies to compete
with the global industry in terms of relative pipeline novelty.
Second, leading Chinese pharmaceutical companies that have historically focused on generic drugs can take advantage of their ample funding and management capabilities to develop more novel drugs for less risky and more mature drug targets, and become more competitive
with multinational companies in terms of the number of clinical-stage products.

prospect