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Chinese pharmaceutical companies are making inroads, particularly in early-stage research and initial clinical trials, but remain about a decade away from challenging industry heavyweights like AstraZeneca on a global stage, the company’s chief financial officer said in an interview.
Aradhana Sarin said that no major Chinese pharma company has the capability of carrying out concurrent global clinical trials of the sort needed to satisfy individual national regulators and roll treatments out internationally.
Still, she said that eventually facing off with Chinese rivals worldwide was “only a question of time.” AstraZeneca presented its first-half results Monday — earnings beat expectations thanks to higher-than-expected revenue from cancer drugs. Asked when she expected to be asked on analyst calls about a brand-name Chinese rival, Sarin said: “Probably in the next 10 years.”
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Sarin’s remarks echoed those of AstraZeneca Chief Executive Pascal Soriot, who told analysts that China was a “very competitive market,” and that its “innovation potential is also enormous,” but that the country’s pharmaceutical companies lacked the profitability domestically to launch themselves abroad. In the meantime, he said, AstraZeneca would “learn to compete with them.” (Soriot previously told Semafor that AstraZeneca collaborated and competed with Chinese rivals at the same time because if it and other European firms didn’t, “we’re going to lose.“)
The ability to carry out later-stage clinical trials on a global scale “takes a long time to build,” said Sarin. AstraZeneca has over the years brought such trials increasingly in-house, employing some 9,000 people overall. Acquisitions aren’t the answer for Chinese pharma either, Sarin said: “I think it’s more a capability: finding the right people, building it brick by brick, it just takes time.”
Meanwhile, the prevalence of GLP-1 drugs that are increasingly being used for weight loss — and in the process transforming industries ranging from restaurants to alcohol-makers — would likely force pharmaceutical companies, including AstraZeneca to revisit choices about which ailments to target, said Sarin.
The company has an oral GLP-1 tablet, one which has shown promising results in clinical trials. And the wider impacts of GLP-1s could reshape which cancers increase or decline in prevalence. Sarin, herself a medical doctor, noted that colorectal and endometrial cancer — rates of which correlate with instances of obesity — could decline, while other health issues driven by inflammation could also be affected. “We’ll just need to follow where the science goes,” she said.
Notable
- Chinese authorities in February formally charged the former head of AstraZeneca’s business in the country with committing three crimes, and charged the firm’s China subsidiary with unlawful collection of personal information and illegal trading.
- The value of “pharma out-licensing,” in which Chinese companies license their patents to global pharmaceutical giants for production, is twice as much as the country’s mammoth EV sales abroad, HSBC analysts noted in a recent episode of the bank’s Asia-focused podcast, Under the Banyan Tree.