By Preetika Rana
SHANGHAI -- Big Pharma is investing billions of dollars to
tackle deadly diseases prevalent in China, developing new drugs to
combat a lineup of top killers that differ from those in the
West.
Swiss drugmaker Novartis AG is testing a molecule to combat a
rare head and neck cancer widespread in southern China. American
rival Johnson & Johnson is creating innovative drugs to tackle
lung cancer and hepatitis B, endemic in China. And France's Sanofi
SA is researching a new way to treat liver cancer -- one of the
most common forms of cancer here -- despite early setbacks.
The move is a switch from a decades-old strategy of selling
existing drugs to China's billion-plus people, and is aimed at
gaining a stronger foothold in the world's second-largest drug
market which has long eluded Western companies.
Lung, liver and stomach cancers are among China's top killers,
according to the World Health Organization, accounting for more
than a million deaths every year. Those diseases kill hundreds of
thousands of people in countries like Japan and South Korea too,
offering an opportunity for drugmakers to sell China-tailored
treatments in neighboring markets. Alzheimer's and other forms of
dementia are among the top causes of deaths in the U.S. in
comparison.
But large unmet needs aren't alone driving companies to discover
new therapies here. Regulatory hurdles have made it tough for
foreign firms to quickly launch their newest treatments in China,
largely because they are discovered overseas.
Recent corruption scandals have made it harder for companies to
market older drugs that are approved for sale here. A Chinese court
slapped a nearly-$500 million fine on GlaxoSmithKline PLC in 2014
after it found the U.K.-based company's local unit guilty of
bribing doctors. Novartis last year agreed to pay $25 million to
settle a Securities and Exchange Commission Investigation into
bribery allegations in China.
Western firms found China's lucrative market slipping away, and
in recent years many began moving from bringing existing drugs to
discovering new cures here.
J&J in 2012 opened a discovery lab in Shanghai, and is now
working on new medicines for lung cancer, blood cancers and
hepatitis B. Hepatitis C is more common in the U.S. The lab is
planning to test its first breakthrough on patients over the next
year, and expects the compound to emerge from its lung cancer or
hepatitis B programs.
Novartis injected $1 billion between 2009 and 2014 to convert an
existing Shanghai facility into a new discovery center. In October,
it began testing its first China discovery -- a molecule to treat
nasopharyngeal cancer -- on Chinese, Korean and Taiwanese
patients.
En Li, Novartis' research head in China, said the company will
soon test another compound, to treat liver fibrosis. His team of
600 scientists are running at least a dozen other projects aimed at
finding new treatments for diseases such as lung and stomach
cancer.
Until a few years ago, China lacked the manpower needed for drug
discovery, a process that involves searching for compounds with
medicinal potential. But a government program encouraged thousands
of Western-trained Chinese scientists to return over the past
decade, encouraging Big Pharma to deepen research.
Like drug production -- Western firms have long contracted
Chinese factories to manufacture their drugs inexpensively -- the
cost of drug discovery is cheaper in China, too, meaning companies
will increasingly use labs here to advance their global pipeline,
according to Vikram Kapur, who leads Bain & Co.'s health-care
practice in Asia.
J&J and Novartis say their discoveries, while targeted at
China's needs, will also be tested on patients in the West so they
could be sold there if needed. Lung cancer, for example, is
widespread in the U.S. and the U.K.
Not every project will produce a new discovery. Sanofi was
preparing to test a new molecule to treat liver cancer some three
years ago, but the program was shelved before it could be tried on
patients, said Alex Zhang, who oversees the company's research
activities in China.
The process of testing discoveries on people -- called drug
development -- is also risky, with projects more likely to fail
than succeed. Roughly one out of every 10 discoveries tested in the
U.S. between 2006 and 2015 eventually made it to market, according
to trade body Biotechnology Innovation Organization.
Instead of developing new molecules in its own lab, Sanofi is
striking partnerships with academia in China. Mr. Zhang said the
company is running roughly 10 projects with Chinese universities,
focused on finding treatments for liver cancer, hepatitis B and
diabetes. The collaborations are still in early stages, and he
doesn't expect to see results before two years. The U.K.'s
AstraZeneca PLC has also joined with universities in China, and is
creating new drugs for stomach cancer and chronic kidney disease,
among others.
Drugs that meet large clinical demand stand a better chance at
being reimbursed by the government, making otherwise costly
medicines more affordable for patients. They are also harder for
doctors to ignore.
Local upstarts aren't far behind. Hutchison China MediTech Ltd.,
which counts Hong Kong billionaire Li Ka-shing among its backers,
has sought approval for its first drug in China -- a compound to
fight colorectal cancer. Additional tests are planned for the same
drug to work on patients with lung and stomach cancer.
"What's important -- whether it's Big Pharma or companies like
ours -- is that drugs are now specifically being designed for
Chinese patients," said Chi-Med's Chief Executive Christian Hogg.
"Patients are absolutely going to be the winners in this."
Write to Preetika Rana at preetika.rana@wsj.com
(END) Dow Jones Newswires
July 05, 2017 07:14 ET (11:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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