Chinese Medicine, Western Style

Credit: D.B. King

China’s economy is the third largest in the world behind the U.S. and the European Union, according to the World Fact Book, and it continues to grow at a rapid rate. What does that mean for science careers? It’s a muddled picture, as opportunities in different fields grow at vastly different rates depending on social and economic factors.

But at least one western industry--pharmaceuticals--is positioning itself to be a part of China's growth. For a decade or more, big pharma has been selling and even manufacturing drugs in China to serve the Asian market. But in 2002, Novo Nordisk (Bagsværd, Denmark) upped the ante by establishing a research and development (R&D) facility in Shanghai. Other companies have followed their lead: Roche (Basel, Switzerland) established an R&D center in Shanghai in 2004; AstraZeneca (London, U.K.) opened a facility there in May. Eli Lilly (Indianapolis, Indiana) and Pfizer (New York, New York) have also opened R&D operations in Shanghai, and Novartis (Basel, Switzerland) has plans for one.

What's more, if the Chinese government’s efforts to encourage pharmaceutical innovation are successful, western pharmaceutical companies will likely expand their R&D efforts there--which so far are still pretty small--providing western-trained Chinese nationals a research home to return to.

Big pharma's R&D investment in China has both business and scientific motivations. Asian scientists make up about 18% of graduate students at U.S. institutions, according to the latest Science and Engineering Indicators from the U.S. National Science Board--and a similar percentage of postdocs--and pharmaceutical companies are hiring more and more of them. "We thought, 'Why should they have to come to us? Why can't we come to them?' " says Lee Babiss, who is vice president of preclinical R&D for Roche.

The business

Western big pharma is not new to China. For example, Roche has four companies in the Hong Kong area, representing their pharmaceuticals and diagnostics businesses and focusing on clinical development of drugs and diagnostics that have already been developed and approved in other countries.

AstraZeneca is also well entrenched in China, with a marketing arm employing 2500 that encompasses a division to support local clinical trials. AstraZeneca also opened a manufacturing plant in 2001 to produce formulations to serve the Chinese market.

Manufacturing is certainly cheaper in China, as are clinical trials, and those have been motivations for companies to conduct operations there. But R&D is another story, says John Ramsey, global product director for AstraZeneca. “The focus isn’t because this is cheap. In fact logistically, it’s quite a challenge to do this. Whether you’re AstraZeneca, or Roche, or Novartis, you have to pay quite a bit to have that presence. Our focus is to have a presence in China, for China, and for the rest of Asia,” Ramsey says. Some companies are looking at doing research in China that could impact western markets. Babiss says that Roche’s Shanghai facility will work on novel drugs that could also be introduced into the United States or Europe

There are also scientific reasons for pursuing basic research in China. The government there has made commitments to encourage pharmaceutical and biotechnology research, and stem cells--with potential as both therapies and research tools--are a complicated topic in the west, while the Chinese government has been much more accommodating to stem cell researchers.

AstraZeneca and Roche view China as an important growth market. As the country’s population--and its economic wealth--grows, the Chinese people have more money to pay for drugs, and diseases of affluence become more widespread. China represents a particular opportunity in oncology because it has "a high prevalence for cancers that haven’t traditionally been our target, and Innovation Center China will bring that into focus,” says Ramsey.

With several of the most important western big-pharma players established or getting established in China, how are they getting along over there? Roche has filed five patents based on work at its facility and its success has helped to spur the other companies to set up R&D facilities, Babiss believes, and that, he says, is a good thing: “That’s good for us, and it’s good for China.” Other companies, Babiss says, will attract more contract research companies to the area, and those new companies will "provide those services so we don’t have to create the infrastructure." His long-term, big-picture goal is a healthy biotechnology industry in China: "We need the biotech industry to take off … to get the venture capitalists to start investing there.” Roche is even expecting some of their top scientists to leave the research institute and start biotech companies of their own; indeed, they're counting on it. “We’d like to see some of our people start biotech companies so we can have relationships with them as well,” Babiss says.

None of this will happen, experts say, unless China can protect companies' intellectual property. “We need to see that [intellectual property laws are] enacted and used," says Ramsey. "I’m told by intellectual property attorneys that there is some evidence this is happening, but if we find in the future that there is a threat to our IP, then that would be a reason to reassess exactly what work could be done there. But I don’t anticipate that outcome. Chinese government officials are no fools; they know that innovation industries will have no place in China” if they don’t enforce intellectual property legislation.

The science

Lee Babiss

Roche’s R&D facility, established in 2004, has about 100 full time employees. Babiss expects it to grow to about 250 employees in the next 2 to 3 years. The company is also building a separate development team that will work to register drugs already being sold in other countries and take new drugs developed by the research arm into clinical development. This development team encompasses around 20 people, and will grow to 200 to 300 people within 3 to 4 years, Babiss predicts.

Roche has poured its initial resources into establishing chemistry research, specifically lead generation and optimization. There is not yet any integrated drug discovery like that found at western pharma facilities. “That will take time to build because we have to train these scientists that are newly graduated or have worked at small companies and teach them how to do the more complicated and creative aspects of drug discovery,” says Babiss. Most of the hires from Chinese institutions have been chemists because, along with engineering, chemistry is a particular strength of students coming out of China, says Babiss.

Other fields, such as biology, are not as strong in China; so these eastern outposts need scientists trained in the west in enzymology, pharmacology, and disease biology, among other biological fields. A key strategy is to hire Chinese nationals that have been trained in the west and developed expertise in an important disease area or pathway. Ramsey points to the example of Xiaolin Zhang, the director of the fledgling institute, who was born in China and trained in the west before becoming director of informatics at AstraZeneca's research facility in Boston, Massachusetts. Most of those brought back to China after working in the west have extensive experience in the biotech or pharmaceutical industry. “Their task is then to teach the younger scientists” recruited in China, says Babiss.

Another way to build expertise is to do personnel exchanges between facilities in China and in the west. So far, Roche has no western natives, other than the manager, permanently employed at its Shanghai center. But that could change, he says, as the center develops a more integrated program.

AstraZeneca is facing similar challenges. Ramsey estimates that 20-25% of the 70-90 scientists planned by the end of 2008 will be trained in the west--both Chinese nationals and westerners--while the remainder will be recruited locally in China. Over about 5 years, he expects the percentage of western-trained scientists to decrease and the percentage of local hires to increase. Overall, Ramsey predicts that most of the permanent career opportunities will be for Chinese nationals. Babiss notes that the only westerner permanently employed at Roche’s facility is its general manager. He expects that some will be hired, but it will be a slow process. “Language and culture are big challenges.”

The focus of AstraZeneca’s center will be on translational science--specifically, applying the molecular understanding to disease mechanisms drug development--with a focus on oncology, particularly cancers with a high prevalence in China such as gastric, esophageal, pharyngeal, and liver cancers. AstraZeneca is focusing on oncology in part because efforts in genetics and proteomics have begun to spur clinical studies. “Oncology is the most [advanced] therapeutic area in terms of translational science,” says Ramsey.

Like Roche, AstraZeneca is recruiting biologists. Its current emphasis is on histopathology, molecular and cellular biology, and informatics. The company is also looking for expertise in animal disease models. AstraZeneca hopes to establish panels of cell lines and potential biomarkers, as well as in vitro assays to support translational research. Target identification and validation will also be a key area of work.

The future

AstraZeneca is focusing now on oncology, but Ramsey anticipates that the center will eventually be expanded to include work in inflammation, cardiovascular disease, neuroscience, infectious agents, and other research programs. Roche also expects to expand its operations, and Babiss anticipates that the company will eventually mine local traditions. “We don’t want to diminish the potential of traditional Chinese medicine, and what we can realize using the molecular approach to identify chemical entities that are driving these effects,” he says.

Both Babiss and Ramsey speak glowingly of the prospects for research in China, but both sound a note of caution. Of particular concern is how quickly pharmaceutical companies can build up high quality research teams. Western-trained Chinese nationals can bolster them, but they will take time to build. And no one expects the road to be easy. The quality of graduates from Chinese institutions will be a determining factor, and some scientific fields are much better represented than others. “We’re still learning where the strengths and weaknesses are,” says Ramsey.

Jim Kling writes from Bellingham, Washington.

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