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The State of China Life Science in 2009 – An Introduction

publication date: Feb 3, 2009
author/source: Greg B. Scott, Executive Editor and Richard Daverman, PhD, Business Editor

These are interesting times. The world is in financial turmoil, with declining company revenues, massive job losses, factory closings, bankruptcies, and vulture acquisition activity at all time highs. Still, there are scattered bright spots. And when a financial crisis creates seismic dislocations in the status quo, those who are both nimble and savvy can take advantage of the opportunities.

The life science industry in China seems to be one of the brighter spots. There is no question that damage has been done, even in this relatively unscathed sector. Nevertheless, there are many reasons to be positive about the sector.

To understand the current state of China biopharma, our ChinaBio® research team assembled statistics describing what happened during 2008 in China’s life science industry. Our team dug deep, developing data that is not available elsewhere. They analyzed over 120,000 data points, read thousands of patents, and contacted hundreds of companies, universities and research institutes.

As the results came together, we were often surprised at how resilient the sector has proven to be. While definitely impacted by the financial crisis and declining global markets, the downturns have been relatively modest. For example, VC investment in China life science was only down 18% from 2007 levels.

Meanwhile, other factors, both global and internal, are actually working to expand life science in China. Government investment in biotech research has increased several fold, and big pharmas are actively seeking partnerships in China, both with service companies that provide high quality, low cost product development, and with startups and universities and institutes that are rapidly accelerating their ability to provide innovative technologies.

The global economic downturn has also increased the cost pressure on big pharma, causing them to trim their operations and turn more toward outsourcing. Because China offers one of the best value propositions in the world for outsourcing, it stands to benefit from this trend. Plus, it offers one of the fastest growing markets for pharmaceutical products in the world, at around 20%/CAGR.

The world of China biopharma is a broad subject. We will break down our analysis of into a number of parts, looking at technology development, clinical trial activity, investment and deal making, with articles appearing regularly over the next few weeks. We think our analysis shows that China biopharma is a vibrant industry, applying innovative science to solve intractable medical problems.

Editors note: Research for this article was performed by our Shanghai-based ChinaBio® research team -- Dr. Don Qiu, Mei Guan, and Alex Wang.

Disclosure: none.


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