Four matrices of excellence to excel in China cell and gene therapies market
New whitepaper from Deloitte analyzes trends and challenges in China CGT market
Published Date: 20 May 2020
The Winning in the cell and gene therapies market in China whitepaper from Deloitte explores key factors and trends defining China's cell and gene therapies (CGT) industry, helping investors, companies and researchers work towards continuous innovation and sustainable growth.
The CGT industry is transforming not just how humans treat genetic and intractable diseases, but also the entire pharmaceutical ecosystem, with the global CGT market projected to reach more than USD11.96 billion by 2025. Driven by strong policy support, China is a leader in CGT development, ranking 2nd in the world with more than 1,000 clinical trials either conducted or underway and thousands of related patents granted by the Chinese Government between 2017 and 2019. Its CGT market is flourishing, with 45 local companies and four partnerships with foreign participation.
"The key drivers for China’s CGT sector are shared between government related but as well by private capital. The Government has rolled out a series of policy supports and promotions, establishing a transparent framework for CGT therapy regulatory approvals, and providing speedy registration of qualified CGT products and organizations. Then, private capitals see high interest as this area can generate high returns going forward. As long as these two forces stay aligned and work together the outlook for CGT in China will be very bright," says Deloitte China LSHC Leader Jens Ewert.
"China ranks second globally in total number of CGT clinical studies, making it an attractive destination for related clinical studies and subsequent commercialization. This explains why more global companies are including China in the first wave of markets in which to launch innovative products," adds Jens. "China's supportive policy environment has also catalyzed CGT ecosystem development. Academics, biotechs and government bodies are working to develop industry standards and encourage private capital inflows. China's local biomedical research has generated more than 3,000 CGT-related patents, and collaboration between local biotechs and multinational companies has been accelerated through licensing and joint ventures."
Despite this surge in growth, however, China's CGT industry still faces an array of uncertainties and challenges, including heavy protection and oversight of local genetic resources, an increasingly crowded CGT pipeline, high level of local regulatory and market access uncertainties, and a healthcare provider system that is inexperienced in CGT mechanisms.
Given these challenges, Deloitte China LSHC Consulting Director David Xie suggests CGT companies build a four-pronged matrix of excellence. "Due to the specific circumstances of CGT regulatory framework, the first aspect enterprises should build is market entry excellence. They should evaluate the risks and returns of different partnership models, such as independent development, JV partnership, licensing/tech transfer, etc., to select the optimal model for market entry. Secondly, they should aim for portfolio and IP excellence. A more "In China For China" product portfolio based on local patients' disease spectrum and genomics can help CGT companies seize more local innovation opportunities and build a robust IP portfolio."
"The third aspect to succeed on is regulatory excellence. For CGT, companies need to effectively engage with different regulators, such as Ministry of Sciences, Department of Human Genetic Resources, National Health Commission, and NMPA to understand the local registration requirements and launch optimal clinical programs to ensure maximum speed-to-market in China. Lastly, companies should build CGT commercial excellence. Industry players need to address the unique impediments of CGT commercialization in China by, for example, localizing manufacturing through early process prototyping, accessing the market through innovative pricing and reimbursement programs, and leveraging digital platforms to facilitate the delivery of comprehensive training and certification programs to hospitals and the management of complex workflows," adds David.
The COVID-19 pandemic is expected to boost the development of basic CGT biomedical research, but has also cast uncertainties over the commercialization of CGT products in China due to potential disruptions to clinical studies, regulatory approvals and supply chain operations. Companies should adopt more agile launch planning processes, utilize innovative channels to deliver early-stage education to the market, and proactively seek industry alliances for market developments.