Global healthcare giants have "turned their backs", and the asian medical innovation outlet is accelerating from Singapore to China

Image source @ Visual China

Text | Arterial Orange Fruit Bureau

In recent years, a race between global healthcare giants and Chinese innovation has been in full swing.

In July 2018, Sanofi China Central and Western Operations and Innovation Center and Sanofi Global R&D Operation Center were officially settled in Chengdu High-tech Zone; in June 2019, Johnson & Johnson Innovation Incubation Base "JLABS" was officially opened in Shanghai; in October 2019, The 863 million-yuan Roche Shanghai Innovation Center was inaugurated in shanghai Zhangjiang Hi-Tech Roche Park; in October 2019, the first innovation center in Boston Scientific West was officially located in Chengdu High-tech Zone; in September 2021, Siemens Healthcare Shanghai Innovation Center was officially opened in Zhangjiang Science City; and in October 2021, AstraZeneca upgraded its Shanghai R&D center to a global R&D China center.

And that's just the tip of the iceberg. According to statistics, in Shanghai alone, there are 18 of the world's top 20 pharmaceutical companies settled in China headquarters or R&D headquarters, and the landing of these R&D centers has "heated up" the domestic medical innovation market at the same time, but also made the wind direction of Asian medical innovation centers shift, and began to gradually blow from Singapore to China.

So what's the logic behind that?

01 Why is the wind blowing in Singapore?

When the healthcare giants first set their sights on the Asian market, the first thing they saw was not China, but Singapore, which covers an area of only 719.1 square kilometers.

There's a reason for that, of course. In the 1980s, Singapore, which had already ended its first economic boom, began to put the eggs that represented the economy in the medical field.

But it won't be easy. Because Singapore at that time was completely a "blank sheet of paper" in the medical field, there was no representative enterprise in the local area, the relevant policies were not perfect, and there were no mature educational conditions to cultivate relevant talents, it can be said that there is no information related to medical care.

Fortunately, Singaporeans are smart enough. They boldly launched the "foreign aid policy" and invested heavily in the introduction of a group of star scholars in the field of life sciences around the world, one of them, the founder of molecular biology and nobel laureate in medicine, Sidri Brenner.

In addition, Singapore has also developed encouraging policies such as the "BMS" scheme, the "RIE2020", the Pharma Innovation Scheme, and the promotion of the integration of multiple resources to create an ideal business and export environment, which aims to do its best to meet the development needs of medical companies in Singapore.

But what really left these industry "bigwigs" is that Singapore has grasped the key variable of "innovation". First of all, in terms of investment, Singapore will invest about S$1.5 billion (equivalent to about RMB7 billion) in medical research and development every year, and will allocate an additional S$3.7 billion (equivalent to about RMB17.4 billion) for R&D infrastructure construction, which mainly includes the construction of laboratories and incubators.

Secondly, in cooperation. The Singapore government has built a number of diversified main body cooperation platforms, the purpose of which is to promote the efficient exchange of deep participants in the innovation ecological chain such as multinational companies, local enterprises, research institutions and government agencies, focusing on solving their targeted needs in the core dimensions of technology research and development, scientific research team formation, financial support and business cooperation.

Finally, in terms of the cultivation of scientific research talents, Singapore launched the "Life Science Manpower Development Plan", which mainly focuses on three horizontal dimensions. The first is to continue the "foreign aid policy" and recruit top talents in the field of life sciences on a global scale; the second is to rely on the National University of Singapore, Nanyang Technological University and other local first-class universities to cultivate R&D talents in the medical field; the third is to cooperate with enterprises to cultivate a number of emerging forces in a targeted manner based on the R&D needs of enterprises.

This series of "precision services" has made the otherwise difficult medical innovation a lot easier. On the one hand, in cultivating innovation, Singapore not only provides funds for scientific research teams, but also helps them build talent teams and provide laboratories; on the other hand, in terms of releasing innovation, Singapore has established a fast approval channel, and with the help of a good business environment and export policies, while allowing innovative achievements to quickly go to the market, it can also quickly get feedback from the market.

These full of "sincerity" make it difficult for medical giants to refuse. According to statistics, as of 2020, 11 of the world's top pharmaceutical and biotechnology companies, including GlaxoSmithKline, Merck, AbbVie, Novartis, Pfizer, Roche, Sanofi, Amgen, etc., have invested in more than 25 large-scale innovative research bases in Singapore, with research directions including clinical science, genomics, bioengineering, cell biology, pharmaceutical biology, biological imaging and immunology, with an annual translational income of more than 30 billion US dollars.

02 Why is the medical innovation compass starting to point to China?

Since Singapore is so "sincere" and has produced certain results in the past 30 years, why should the global medical giants start to set their sights on China's medical innovation market?

There's a reason for that, of course. The first is the strong support of the policy. According to statistics, in 2021 alone, the mainland has issued 49 policies in the field of transformation of medical research achievements, including 16 national policies and 33 local policies, and its core content mainly focuses on the three focus sections of "intellectual property rights, talent training, and scientific research incentives".

The second is the optimization of the overall innovation environment. First, at the production end of innovation, more and more scientific research institutions and enterprises have begun to devote themselves to medical innovation; second, at the output end of innovation, scientific research "hardware" such as laboratories, incubators and transformation centers has gradually matured and diversified.

Third, at the end of the innovation landing, "buyers" such as investment institutions, enterprises and governments are increasingly enthusiastic about early medical projects. Taking investment institutions as an example, in 2021, there were 59 early investment and financing events in the medical and health field in mainland China, with a total financing amount of 2.5 billion yuan, and it should be emphasized that a total of 107 investment institutions participated in early investment, including many well-known investment institutions such as Matrix Partners China, Legend Capital, Mint Angel Fund, Innovation Factory, Yuansheng Venture Capital, and Kai Venture Capital.

Then there's the huge market space for medical innovation. In recent years, with the intensification of aging and the continuous upgrading of consumption levels, the mainland pharmaceutical field has always maintained a growth rate that exceeds the growth rate of the global pharmaceutical market, with a growth rate of 8.1% from 2014 to 2018, and the market size has increased from 1.1 trillion yuan to 1.5 trillion yuan, reaching 1.75 trillion yuan in 2020, which has become the world's second largest medical market.

Finally, there is the power of innovation that has not yet been fully tapped. In recent years, thanks to the improvement of the overall innovation environment, the number of patents in the medical field in mainland China has surpassed the United States to become the world's first, but it has appeared to be "stagnant" in terms of conversion rate, and its data is less than 5%, which is far from the international leading level.

On the one hand, there is a high number of patents, on the other hand, there are countless "wasted" medical innovations. How to pull these innovations up from the "valley of death" is exactly what the global healthcare giants are good at, and it is also the key to finding a new growth curve in the Chinese market and even in Asia as a whole.

So here they come.

03 Same runway, different "running methods"

Although everyone is standing on the runway of China's medical innovation, these medical giants are obviously not willing to "go with the flow", and they have their own unique "answers" to the question of "how to better combine their own advantages with China's medical innovation market".

● AstraZeneca: Government-enterprise cooperation to create an innovative model of "internal and external repair"

On October 11, 2021, AstraZeneca's Global R&D China Center was officially opened in Shanghai, along with the Shanghai International Life Science Innovation Park, shanghai iCampus.

The industrial park model of "iCampus" is jointly created by AstraZeneca and the local government, and its core is to coordinate with the local government and AstraZeneca's top medical resources in the world, and promote the integration of local innovative enterprises and innovative medical technologies according to local conditions.

This "cooperation model" not only fully stimulates the potential of local economic development, but also can well help innovative enterprises to achieve "same frequency resonance" with global enterprises in technology research and development, commercial promotion, etc., which is of positive significance for the incubation of innovative achievements in China, and these innovative achievements will also meet the current heavy needs of China's clinical field.

Up to now, AstraZeneca "iCampus" has expanded to 7 cities, namely Beijing, Wuxi, Chengdu, Hangzhou, Shanghai, Yixing and Guangzhou, and has successfully attracted more than 60 well-known pharmaceutical companies including Heyu Biologics, Dizhe Pharmaceutical and Bloomage Biologics.

●Boston Scientific: Be an "insider" in China's local medical innovation market

When Boston Scientific first entered China in 1997, it had fewer than 10 employees. Today, Boston Scientific has about 1,200 employees in China, and its revenue has grown by double digits in recent years.

Such rapid development is inseparable from the Chinese market strategy formulated by it, that is, to fully integrate into the local medical innovation ecosystem and accelerate the transformation of innovative technologies in China, so as to form a win-win synergy effect with more local partners.

Its specific performance is in three aspects: the first is the cultivation of local innovative talents, Boston Scientific relies on the "Innovation Institute", a doctor growth platform, through a variety of forms of academic activities, the formation of a training network, radiation of major provincial hospitals across the country, in order to expand the talent reserves of China's medical industry.

The second is to promote cooperation with deep participants in the innovation ecological chain and promote the transformation between "production, study and medicine". In 2018, Boston Scientific and the Institute of Technology Transfer of Tsinghua University jointly established the "T3 Innovation Library"; in 2019, the second headquarters of Boston Scientific China and the first innovation center in the west were officially settled in Chengdu High-tech Zone; in 2020, Boston Scientific and West China Hospital of Sichuan University jointly established the "West China-Boko Joint Innovation Center".

The third is to integrate global medical resources and achieve open innovation. As a world-leading medical technology company in the field of minimally invasive intervention, Boston Scientific has injected a lot of innovative blood into the Chinese market in recent years, focusing on the organic combination of international innovation experience and local R&D practices, accelerating the transformation of innovative achievements, and promoting the integration of industry, education, research and medicine.

●Siemens Healthers: Not only introduce global innovation, but also expand Chinese innovation to the world

In September 2021, Siemens Healthers Healthers Shanghai Innovation Center was officially opened in Zhangjiang Science City, which is one of the four major global innovation centers of Siemens Healthcare and the first joint innovation platform opened to the outside world by Siemens Healthers.

It is reported that the innovation center mainly focuses on the three frontier areas of advanced diagnosis and treatment technology, medical digitalization and artificial intelligence, and intelligent medical devices, and mainly focuses on cooperation with local start-ups, medical institutions, and scientific research institutes to accelerate the implementation of more innovative achievements in China.

Specifically, the Innovation Center offers two modes of cooperation for local start-ups: one is to join the start-up program, that is, to validate innovative technologies and solutions, and to seek opportunities to cooperate with Siemens Healthcare; the other is to enjoy one-stop innovation services after entering the Innovation Center. The innovation center has more than 4,200 square meters of office space, equipped with rapid prototyping laboratories, digital simulation laboratories, medical AI research and development platforms, intelligent imaging laboratories and other innovation platforms, which start-ups can rely on for higher quality innovation.

According to statistics, Siemens Healthcare currently has more than 560 patented technologies in China, and the annual innovation investment is as high as hundreds of millions of euros, which fully demonstrates Siemens Healthcare's determination to focus on localization innovation in the Chinese market.

Johnson & Johnson: "Supporting local innovation in China without strings attached"

In Johnson & Johnson's view, the current medical innovation and transformation is difficult to complete independently as before, one person, one enterprise, and one institution, but it needs to be based on a good innovation ecosystem, that is, with the government, industry partners, academic institutions and local business partners to create an "open innovation" ecosystem.

Therefore, Johnson & Johnson has created the "JLABS@" innovation incubator model. Before entering the Chinese market, "JLABS@" has landed in San Diego, San Francisco, Boston, Lowell, Massachusetts, Houston, Toronto, Belgium Beers, New York City and other regions.

In June 2019, JLABS@ Shanghai was officially put into use at the Zhangjiang Science and Technology Park, which is Johnson & Johnson's first in the Asia-Pacific region and the largest in the world. It is reported that the incubator adopts a "no additional conditions" model, that is, "there are no additional conditions for enterprises to settle in, and if new achievements are born, Johnson & Johnson will cooperate with them." ”

In terms of incubating innovative enterprises, compared with the general incubation platform, Johnson & Johnson, which is well versed in the development path of technology-based enterprises, not only provides support for start-ups in corporate operations, but also tries to solve the experimental needs of enterprises in life sciences, biotechnology and medical technology in one stop, which is embodied in cultivating "innovative leaders" and bringing Johnson & Johnson's management model, ability and culture to them.

● Roche: Attract and discover local Chinese innovative enterprises that focus on the "firstin class"

In 1994, Roche entered China and became the first multinational enterprise to settle in Zhangjiang, Shanghai. In 2004, Roche R&D (China) Co., Ltd. was established, mainly engaged in drug research and early development. In 2019, Roche invested RMB 863 million to upgrade it into the Roche Shanghai Innovation Center, making Shanghai the third largest strategic center in the world after Basel and San Francisco.

It is reported that the innovation center will integrate the resources and advantages of Roche Group to provide personalized support for start-ups in the fields of innovative drugs, diagnostics and personalized medicine, artificial intelligence and so on. It is worth mentioning that the innovation center will mainly focus on the "firstin class" of Local Chinese Innovation Enterprises.

In fact, this is also to give full play to Roche's advantages in innovative drugs. Roche Shanghai Innovation Center not only covers all aspects of the entire innovative pharmaceutical industry chain, including the early research and development, production and commercialization of drugs, but also maximizes the synergy effect of all aspects of the industrial chain, accelerates the landing of medical innovation achievements, and enables drug research and development to continuously meet the needs of Chinese patients.

By the end of 2020, roche Shanghai Innovation Center had produced a total of 271 invention patent applications, of which 144 had been authorized. In the future, the innovation center will continue to increase R&D investment and the number of scientists, strengthen drug research and development in the field of immunity, and establish drug research and antibody discovery research capabilities in the field of oncology, so as to promote china's local research and development of innovative drugs to the world.

04 Opportunities and challenges coexist, who can take the lead in breaking through?

The blue ocean of innovation in China's medical field is accelerating, but if it wants to go ashore, these multinational medical giants still need to overcome many obstacles in the future.

It is mainly reflected in three aspects: first, the current innovation system in the mainland is not perfect, insufficient innovation and low conversion rate is still a thorny problem; second, the strong rise of local enterprise innovation, more and more local medical enterprises have begun to focus on innovation and transformation, and in recent years have produced a large number of innovative achievements; third, the homogeneous competition of overseas giants, which requires them to run out of distance, but also to run out of speed on the runway of medical innovation in China.

However, no matter how to change, in the innovation and transformation at this stage, these overseas giants cannot escape these four basic principles: one is to grasp the innovation system of the current Chinese medical market; the second is to fully understand the core needs of the current Chinese medical market; the third is to give full play to their own advantages and focus on localization innovation; and the fourth is to actively cooperate with the ecological side of the innovation chain to jointly promote the landing of innovative results.

As a market becomes larger, the competition will be fiercer than ever. But in any case, what can really stand out will always be those "innovators" who closely combine their own advantages with local needs and maximize output benefits, which is not only applicable to overseas giants, but also for local companies.