China represents a tremendous opportunity for AstraZeneca and other pharmaceutical companies to pilot new ways of conducting R&D,” says Steve Yang, Ph.D., VP, head of R&D for Asia and emerging markets for AstraZeneca. That opportunity extends throughout much of Asia, he says, where the lack of entrenched drug development bureaucracy provides a relatively clean slate for innovation. “Asia is very important for AstraZeneca for commercialization and for R&D,” Yang notes. “It’s been one of the fastest growing markets for the past five years.”
AstraZeneca recognized Asia’s potential several years ago, not just by locating facilities in China and India, but by developing local research collaborations with academic institutions and companies throughout the region at a time when many in the West considered that risky. Many of those collaborations, nurtured for 10 and 20 years, are developing into increasingly innovative partnerships.
Those relationships include long- and short-term collaborations and licensing deals with biotech companies, CROs, hospitals, and academia, as well as with individual researchers and entrepreneurs. AstraZeneca seeks out scientific opportunity wherever it is found, he says. “In December 2011,” for example, “we in-licensed a Phase 1 oncology compound from a Chinese biotech company, Hutchison MediPharma Ltd. This is the first time a major pharmaceutical company licensed a clinical-stage compound in Asia. Hutchison is leading the development in China, while AstraZeneca leads development for the rest of the world.” The compound, called Volitinib (HMPL-504), is a highly selective inhibitor of the c-Met receptor tyrosine kinase for the treatment of cancer.
Trends For Pharma In Asia
“I see three major trends affecting life sciences companies operating in Asia,” Yang says. “Long-term relationships are resulting in collaborations, collaborative research is evolving to product delivery, and collaborations are becoming regional, multinational endeavors.”
Since entering China in 1993, AZ has consciously worked to forge relationships that are key to productive collaborations. Because of that early commitment, the company now is benefiting from major collaborations including those with Peking University for cardiovascular disease and metabolic disease and with the Shanghai Institute of Material Medica on a preclinical safety alliance.
As AZ develops its Asian track record, its collaborations become deeper. Hutchison Medi Pharma, for example, initially worked with AstraZeneca in collaborative research, but now is beginning to deliver projects. “We’ve moved from functional to wholistic collaboration in a range of areas, building deeper relationships with institutions rather than just at the level of the laboratory,” Yang adds.
These collaborations are transcending national boundaries. With its strong, well-established research network throughout Asia, “We are linking collaborations to increase the benefit for science, discovery, and research portfolio development,” he says. By building relationships with clinicians and key opinion leaders — particularly in oncology — AstraZeneca has fostered collaborations among researchers in Korea, Japan, China, and Singapore.
According to Yang, the interest in broad collaboration stems partially from the huge unmet medical need in Asia, particularly around gastric, liver, and lung cancer. Statistically, Asia accounts for 75% of all new cases of liver cancer in men and 66% in women. More than 70% of the world’s new esophageal cancers and 50% of the world’s new cases of stomach cancer occur in Asia. By working closely with researchers in Asia on these particular cancers, researchers gain an important, perhaps unique, perspective on the disease. “Data from such collaborations helps explain the varying population genetics of cancer and justify developing therapies targeting those variances,” he explains. Consequently, “AstraZeneca is one of the first pharmaceutical companies to develop targeted therapies for specific populations.”
One of the keys to success, Yang says, is to develop meaningful collaborations. There’s no specific checklist, but “Crafting a meaningful relationship involves developing mutual value and complementary approaches so both parties bring something to the table. The Hutchison Medi Pharma collaboration is a good example,” he adds. “Hutchison has a relationship with a Chinese player and unique insights into targets. We have experts in developing products around the world.”
AstraZeneca doesn’t always take the lead in its collaborations. The leadership role fluctuates based upon what makes sense at the time. For example, Yang says it makes sense for the multinational to lead when global expertise brings value and for local partners to lead in areas where local insights make a difference. As an example of that difference, AZ is pursuing a new strategy of branded generics for emerging markets, giving physicians and patients an alternative to either branded drugs or generics. “We bring branded generics—off-patent drugs sold under their branded names—to complement innovative drugs, based on local needs, capacities, and operating environments.” That approach capitalizes on China’s need for lower-cost drugs as well as the population’s preference for high-quality, Western-branded medicine.
The company is building out its branded generic capacity quickly, through the acquisition of a Chinese-branded generic company, privately owned Guangdong BeiKang Pharmaceutical Company Ltd. To support longer-term growth, AZ announced plans last autumn to build a $200 million manufacturing plant in China. Located in China Medical City (CMC), Taizhou, Jiangsu province, the facility represents the largest single investment in a manufacturing facility that AZ has ever made. Scheduled for completion in late 2013, it will produce intravenous and oral solid medicines for the Chinese market.
Anticipate Regulatory Challenges
In developing an Asian strategy — or any international strategy — understanding the differences among regulatory guidelines is a key hurdle. The regulatory environment is highly country-specific, so no single approach works for all of Asia. Even within China itself, the regulatory environment differentiates between products for Chinese use and those for export. “The regulatory environment in China is quite different from other nations; therefore tailored products are being developed for China,” Yang says. As China’s market matures, the “In China for China, and In China for Global” policies are converging, speeding the day when one policy may apply to Chinese pharmaceuticals, regardless of their intended market.
Throughout Asia, “Regulatory environments and policies are dynamic and are evolving rapidly, especially in emerging markets where innovation is becoming very important,” Yang says. “Regulatory policies are becoming more open and supportive of innovative drugs. That’s a long-term trend, but that road has its ups and downs. For example, the Chinese government has shown a willingness to invest in healthcare, and demand for high-quality medicines is growing exponentially. However, the government is subject to cost-constraint themes similar to what we see in other markets.” Those cost constraints temper its enthusiasm for investment.
Regulatory experience is one of the advantages large multinationals bring to partnerships in emerging regions. For example, AZ has colleagues with regulatory expertise and regulatory relationships in each country. The company leverages those relationships and expertise to help its global team tailor drugs for development.
Innovation Centers Fuel Regional Strategy
China is very important to AZ’s Asian strategy, but is only a part of that strategy. Japan and India also play important roles. “Our overall strategy is to produce products better and faster for the Asia Pacific region and to help the West access Asian innovation. One of the ways that’s accomplished is by building innovation centers to tap into Asian expertise,” he says.
AstraZeneca’s Center for Excellence in Bangalore, developed in collaboration with two Indian companies, and the translational research center dubbed AstraZeneca Innovation Centre China (ICC) are helping fuel the company’s innovation engine. The ICC, which opened in 2007, has become a robust discovery center delivering drug candidates and medicines. “Within the next three to five years, I expect a steady stream of clinical candidates coming out of the ICC,” he says.
To continue to foster innovation in Asia, the company has developed a three-pronged approach based around broadening the scope of therapeutic interests, building a clinical operations center, and strengthening internal capabilities. Oncology was AZ’s primary focus, but now the company is beginning to look at other diseases that are prevalent in Asia. For example, two years ago AZ collaborated on a chronic obstructive pulmonary disease (COPD) study with a Chinese hospital. That work focused on assessing the presence of biomarkers associated with COPD for comparison with Western patients, adding to the body of knowledge. Ultimately, the information may shed light on the disease mechanisms to increase survival of COPD patients.
To leverage that and other research work, AZ opened its global Clinical Operational Hub in Shanghai one year ago to collect data and exchange information among researchers. “This is one of five in the world and the only one AstraZeneca has in Asia,” Dr. Yang notes. He sees the centers as a hub for global regulatory studies in all therapeutic areas.
The company plans to continue to strengthen its capability for innovation by increasing the number and quality of its Asian collaborations with academia, biotech, and other organizations. The knowledge gained from those relationships will support internal innovation as well as collaborative projects.
“AstraZeneca’s approach in Asia is not an isolated effort, but an integral part of a global strategy. China and all of Asia represent a tremendous opportunity for our company.”