THIS MATERIAL IS A MARKETING COMMUNICATION.
China Government Initiatives in Biotechnology
What the Chinese government did to enhance competitiveness of its biotech industry?
In this piece we discuss key government initiatives over the last decade to support budding Biotechnology sector as well as favorable external factors in private capital investments as well as talent pool.
In 2010, China’s State Council launched the Strategic Emerging Industries (SEI) Initiative, which identifies seven SEIs that the Chinese government feels are crucial to China’s economic competitiveness: energy efficient and environmental technologies, next generation IT, biotechnology, high-end equipment manufacturing, new energy, new materials, and new-energy vehicles. Development of these sectors is prioritized, and specific milestones have been declared.
As seen in the 13th FYP, it lays out the vision of China’s development over the years 2016-2020 and continues a theme of innovation as key to China’s growth. In it, goals for development of the biotechnology industry— an SEI— are provided, including the wide application of genomics; large-scale development of personalized medicine and new drugs; and the creation of gene and cell banks. As part of the 13th FYP, the Ministry of Science and Technology released a Biotechnology Development Plan which provides several goals and milestones to achieve with respect to China’s biotechnology industry by 2020 –
• ENHANCE ORIGINALITY OF BIOTECHNOLOGY: The plan directs the Chinese biotechnology industry to focus on developing new technologies and products. The mandate includes goals of developing 20-30 leading new technologies, 30-50 major strategic new products, and 5-80 key application-critical technologies.
• CREATE A BIOTECHNOLOGY INNOVATION PLATFORM: To accelerate the industrialization of biotechnology, the plan promotes construction of biotechnology innovation centers focusing on green bio-manufacturing, innovative drug R&D, and biomedical engineering.
• STRENGTHEN THE INDUSTRIALIZATION OF BIOTECHNOLOGY: It instructs to accelerate the construction of biotechnology specialized high-tech parks, including building 10-20 biopharmaceutical specialty parks and 5-10 biomanufacturing specialty parks, each with an output value of over RMB10 billion.
The plan states that the scale of China’s biological industry should reach 8 to 10 trillion yuan ($1.2 to $1.6 trillion) by 2020.
MADE IN CHINA 2025
Made in China 2025 is an overarching government strategy document that outlines China’s plan to become a powerhouse in high-tech and high-value industries, such as robotics, advanced IT, aviation, and new energy vehicles, plus biopharmaceuticals and other medical technologies. Specifically for biotechnology, the roadmap includes specific goals for licensing of 3-5 new biotech drugs and their companion diagnostic reagents in advanced economies by 2020 plus commercialization of 30-35 innovative drugs (of all types) by 2025 as well as a broader goal of achieving world-class innovation capacity, production volume, and international competitiveness in pharmaceuticals by 2025.
A major strategy to advance its biotechnology industry is building biotechnology parks. These large campuses are designed to collocate high-tech companies and are built around a common theme, such as biopharmaceuticals or nanotechnology. In addition to nationally created parks, nearly every province has a number of local bio-industry parks. Over 100 national level high-tech and economic industrial parks involving biotechnology and more than 400 provincial level biotech industrial parks exist across China so far. These parks provide infrastructure, talent pools, and business support for multiple collocated companies. For example, Suzhou Biobay in the Yangtze River Delta, provides nanotechnology service platforms for 51 companies, as well as offering support with regulatory filings and financing.
BUMPING UP REGULATORY BACKBONE
The National Medical Products Administration (NMPA) is the key regulator of drug approval and post-marketing supervision in China. The drug approval function is jointly overseen by three key entities under the NMPA:
• The Center for Drug Evaluation (CDE), which takes the lead in assessing the efficacy and safety of new therapies. The technical review of clinical trial data is conducted at the CDE.
• The National Institutes for Food and Drug Control (NIFDC) is responsible for the registration test for an investigational drug’s samples, and the testing reports are sent to the CDE to facilitate the technical review.
• The Center for Food and Drug Inspection (CFDI) conducts onsite inspection of clinical trials and manufacturing facilities (i.e., GMP inspection) before the final approval of an investigational drug.
One of the key bottlenecks that has contributed to the slower drug approval process in China as been significant capacity constraints at the CDE, which had a staff of only about 100-120 people before 2015, vs. over 5,000 at the US Food and Drug Administration (FDA). One of the key reforms at the NMPA starting from 2015 has been the acceleration of talent recruitment, which we believe is the foundation for driving a more efficient drug approval system in China. In 2014-2018, the CDE’s headcount increased by about 7X and reached 800 in 2018, according to the Commissioner of the NMPA.
HEADCOUNT AT THE CDE INCREASED BY 7X IN THE PAST THREE YEARS
Global X China Biotech ETF (2820 HKD / 9820 USD)
This document contains the opinions of Mirae Asset Global Investments (HK) Limited (“MAGIHK”) and is intended for your use only.
It is not a solicitation, offer or recommendation to buy or sell any security or other financial instrument and shall not constitute any form of regulated financial advice, legal, tax or other regulated service. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. MAGIHK makes no representation as to their accuracy or completeness and therefore do not accept any liability for a loss arising from the use of this document.
All Investments contain risks. Forecasts, past information and estimates have certain inherent limitations. Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these opinions are suitable for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.
Past performance is not a guarantee or a reliable indicator of future results. Before making any investment decision, investors should read the applicable fund prospectus for details and the risk factors. Investors should ensure they fully understand the risks associated with the applicable investment and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice if in doubt.
This document is issued by MAGIHK (Licensed by the Securities and Futures Commission for Types 1, 4 and 9 regulated activities under the Securities and Futures Ordinance). This document has not been reviewed by the Securities and Futures Commission and no part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission of MAGI HK.
Staying Ahead with Mirae Asset’s Latest Insights
Disclaimer & Information for Investors
No distribution, solicitation or advice: This document is provided for information and illustrative purposes and is intended for your use only. It is not a solicitation, offer or recommendation to buy or sell any security or other financial instrument. The information contained in this document has been provided as a general market commentary only and does not constitute any form of regulated financial advice, legal, tax or other regulated service.
The views and information discussed or referred in this document are as of the date of publication. Certain of the statements contained in this document are statements of future expectations and other forward-looking statements. Views, opinions and estimates may change without notice and are based on a number of assumptions which may or may not eventuate or prove to be accurate. Actual results, performance or events may differ materially from those in such statements. In addition, the opinions expressed may differ from those of other Mirae Asset Global Investments’ investment professionals.
Investment involves risk: Past performance is not indicative of future performance. It cannot be guaranteed that the performance of the Fund will generate a return and there may be circumstances where no return is generated or the amount invested is lost. It may not be suitable for persons unfamiliar with the underlying securities or who are unwilling or unable to bear the risk of loss and ownership of such investment. Before making any investment decision, investors should read the Prospectus for details and the risk factors. Investors should ensure they fully understand the risks associated with the Fund and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice before making any investment.
Sources: Information and opinions presented in this document have been obtained or derived from sources which in the opinion of Mirae Asset Global Investments (“MAGI”) are reliable, but we make no representation as to their accuracy or completeness. We accept no liability for a loss arising from the use of this document.
Products, services and information may not be available in your jurisdiction and may be offered by affiliates, subsidiaries and/or distributors of MAGI as stipulated by local laws and regulations. Please consult with your professional adviser for further information on the availability of products and services within your jurisdiction. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.
Information for EU investors pursuant to Regulation (EU) 2019/1156: This document is a marketing communication and is intended for Professional Investors only. A Prospectus is available for the Mirae Asset Global Discovery Fund (the “Company”) a société d'investissement à capital variable (SICAV) domiciled in Luxembourg structured as an umbrella with a number of sub-funds. Key Investor Information Documents (“KIIDs”) are available for each share class of each of the sub-funds of the Company.
The Company’s Prospectus and the KIIDs can be obtained from www.am.miraeasset.eu/fund-literature . The Prospectus is available in English, French, German, and Danish, while the KIIDs are available in one of the official languages of each of the EU Member States into which each sub-fund has been notified for marketing under the Directive 2009/65/EC (the “UCITS Directive”). Please refer to the Prospectus and the KIID before making any final investment decisions.
A summary of investor rights is available in English from www.am.miraeasset.eu/investor-rights-summary.
The sub-funds of the Company are currently notified for marketing into a number of EU Member States under the UCITS Directive. FundRock Management Company can terminate such notifications for any share class and/or sub-fund of the Company at any time using the process contained in Article 93a of the UCITS Directive.
Hong Kong: This document is intended for Hong Kong investors. Before making any investment decision to invest in the Fund, Investors should read the Fund’s Prospectus and the information for Hong Kong investors (of applicable) of the Fund for details and the risk factors. The individual and Mirae Asset Global Investments (Hong Kong) Limited may hold the individual securities mentioned. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.
Copyright 2021. All rights reserved. No part of this document may be reproduced in any form, or referred to in any other publication, without express written permission of Mirae Asset Global Investments (Hong Kong) Limited.