China 'Bay Area' Calling: Merck KgAA Chooses Guangzhou For New Innovation Center
Executive Summary
Thinking all about scale, China opens the world’s longest sea bridge linking the Pearl River Delta area with Hong Kong and Macao, and the newly-formed 'Bay Area' is already attracting drug makers to look further afield than the traditional Beijing and Shanghai locations.
Guangzhou is not a typical location for biopharma innovation in China, but a growing number of drug makers are being drawn to the southern city for its strengthening linkages with Hong Kong and Macao.
In early November, China opened the world's largest sea bridge, the Zhuhai-Hong Kong-Macao bridge, a 29 km long transport link with over 6.75 km of undersea tunnel. With the opening, China’s so-called Bay Area is officially taking shape.
Centered in Guangzhou (previously called Canton), China’s Pearl River Delta has traditionally been a major trading hub, but as the ever-expanding region is now more strongly connected with neighboring Hong Kong and Macao, biopharma is emerging as a new industry in the area.
Build It And They Will Come
The infrastructure ambitions have already drawn several companies, including most recently German firm Merck KGAA, which on Nov. 12 announced a plan to open its third innovation center in China.
Located in Guangzhou Development District’s International Biotech island, the corporate center is to open in September 2019 to showcase the company's healthcare, life sciences and materials innovation projects. This hub will also integrate the advanced technologies and expertise of Merck and its partners such as startups, academic institutions, business partners, and local government, said the company in a statement.
Merck in China has so far focused on essential medicines and the anticancer Erbitux (cetuximab), but with China's encouraging policies towards R&D and support for innovative new drugs, it is aiming to get on board the fast-moving train. The company in June teamed up with Alibaba Health, ahead of a new innovation center to be opened in early 2019, when it also unveils its new pharmaceutical production plant in Nantong, Jiangsu province.
The new Guangzhou move also comes amid China’s efforts to attract new investment to its key growth industries, including biotech. To this end, the government held its inaugural China International Import & Exhibition fair in Shanghai Nov. 5-10, which showcased its openness to international trade and investment.
China’s 'Bay Area'
The Bay Area centered on San Francisco in the US has become one of the most vibrant innovation centers for biotech and other sectors in the world, and the Guangzhou area is hoping to follow a similar model.
Despite having strong expertise in lung cancer treatment, pioneered by Guangdong Provincial Hospital’s leading oncologist Wu Yilong, Guangzhou and surrounding areas have generally lacked a biopharma innovation ecosystem, but that hasn’t deterred several biotechs from jumping into the fray, driven by the local government’s beneficial policies.
BeiGene Ltd., for one, is building a biologics manufacturing site in the Huangpu District of Guangzhou, and the site has become the biotech’s third and largest production facility after Beijing and Suzhou. The Guangzhou municipal government contributed a total of CNY1bn ($150m) to the project via Guangzhou GET Technologies, a wholly-state owned subsidiary of Guangzhou Development District.
“We are drawn to Guangzhou due to its high-level support in policies and talent,“ said Wang Xiaodong, BeiGene’s co-founder. “The decision is also based on a strategic plan to set up a base in Guangzhou, as there is significant strength in resources and a focus on economic upgrade and innovation,” he added.
Now with the formation of the new China Bay Area, Guangzhou is aiming to drive the growth of biologic manufacturing and overall biopharma growth.
Merck Plans
In addition to its other China moves, Merck also cited the resource strength as reasons to set up its new innovation center in Guangzhou, including “numerous technology companies, startups, universities, research institutes, and related facilities” being close at hand, said the company in a statement.
It is also aiming to nurture promising startups in China with a focus on local innovation to solve local challenges. To this end, its China Accelerator partnering program will start in 2019 and will host five to eight startups each time. The application period is already open and runs until January 25, 2019.
“China is a major innovation hot spot and one of our most important growth markets. We are now creating a strong platform for Merck and our partners to drive innovation in Southern China,” said Kai Beckmann, board member and CEO of Performance Materials at a signing ceremony in Guangzhou.
From the editors of PharmAsia News.