Multinational Pharma in China

Roche Diagnostics (VX: ROG) will spend $310 million in China over the next few years to increase its revenues, adding offices in nine cities across China (see story). The company will also invest in “personnel development, recruitment, instruments and systems,” according to Roche Diagnostic’s COO, Daniel O’Day. Roche Diagnostics wants China to be its second largest market, up from fifth currently.

Lilly (NYSE: LLY) held the official opening of its first-ever research facility in China, which will be known as the Lilly China Research and Development Center (LCRDC) (see story). The LCDRC will be devoted to discovering innovative diabetes treatments, with an eye toward specific China variations of the disease. The goal will be to slow progression of the disease. The Center, located in Shanghai's Zhangjiang Hi-Tech Park, will employ 150 researchers and staff, most of whom were hired in China.

Boehringer Ingelheim announced plans to invest $69 million into a veterinary vaccine medicine production facility, which will be built in Taizhou China Medical City (see story). The new manufacturing plant follows closely on BI’s $15 million investment into an animal health R&D lab in Shanghai’s Zhangjiang Hi-Tech park, which opened in March of this year. The company wants to increase its market share in the Asia-specific animal vaccine sector.

GenScript USA, the world’s largest gene synthesizing company, opened a new R&D facility in Nanjing’s JiangNing Science Park, the result of a $40 million investment and three years of construction (see story). The first phase of the construction includes an R&D center and two 2-story animal housing buildings with AAALAC and OLAW accredited facilities.

Government and Regulatory

The State Council of China announced plans to increase support for seven high-technology industries – including biotechnology – as a way to stimulate growth in its economy (see story). In 2012’s first quarter China’s gross domestic product increased at only an 8.1% rate, anemic by China’s standards. The slowdown has caused speculation the country will announce a stimulus to rev up the economy. But a straight-out stimulus gives rise to criticism that China is creating artificial growth in an economy that has lost momentum. To avoid that, China decided to concentrate its investment in its seven favorite industries. Then the stimulus becomes a way of achieving its long-term goals while it also gives a short-term boost to the economy.

Trials and Approvals

Sihuan Pharma (HK: 0460) passed an SFDA on-site inspection for a first-to-market injected generic drug, Roxatidine, a gastrointestinal product (see story). Sihuan expects marketing approval from the SFDA within three months, allowing the company to launch the drug in the second half of the year. For Sihuan, which has traditionally been known as a cardio-cerebral vascular company, Roxatidine represents an expansion of the company’s traditional franchise.

Disclosure: none.