AstraZeneca Chooses China for R&D and AI Centers, $1B Biotech Fund

Xconomy National — 

AstraZeneca says it will establish centers for drug research and artificial intelligence development in China. The pharmaceutical giant has also set up a $1 billion fund to foster biotech innovation in that country.

The move—which was announced at the China International Import Expo this week—will see AstraZeneca found a global R&D center in Shanghai’s central Jing’an district. The company currently operates R&D centers at its Cambridge, UK, headquarters as well as at sites in Maryland and Sweden.

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The new China facility will carry out R&D for innovative drugs, with the focus being on diseases that are prevalent in China. The site will bring AstraZeneca’s R&D headcount in China to 1,000 people.

According to AstraZeneca, the firm will seek collaborations with local companies for drugs developed at the center as well as legacy products. A spokesman declined to specify which therapy areas will be the focus of R&D activities. Instead, he says AstraZeneca is “open to working with others through this infrastructure to tackle the key unmet needs, whatever they may be.”

He also says AstraZeneca has no plans to co-locate all China R&D facilities, adding “we see benefit in locating facilities across China; the new site will be a complement to existing facilities in Shanghai, and Wuxi [City].”

The AI centre—which will also be located in Shanghai—will focus on the development of systems that are relevant to the discovery, development, and production of biopharmaceuticals. Again, part of the center’s role will be to help AstraZeneca partner with local startup technology companies.

AstraZeneca’s China announcements comes as other biopharma firms position themselves to sell more drugs in that country. Earlier Wednesday, Biogen (NASDAQ: BIIB) expanded a pact with Samsung Bioepis to include the commercialization of three inflammation biosimilars in China. And last week, Amgen (NASDAQ: AMGN) announced it would pay $2.7 billion for a 20.5 percent stake in Beijing-based drug developer BeiGene (NASDAQ: BGNE). The companies will work together to sell Amgen’s cancer drugs in China; BeiGene will also help to develop 20 cancer drugs in Amgen’s pipeline for the Chinese market.

AstraZeneca’s focus on China makes sense as the country is the company’s most important market after the US. According to the firm’s first half, 2019 financial results, drug sales in China were $2.4 billion, a 27 percent increase over the same period last year, and 22 percent of total product sales. The US accounted for more than $3.6 billion of AstraZeneca’s revenue in the first half of this year.

In addition to the new R&D and AI centres, AstraZeneca said it would set up regional headquarters in China in Beijing, Chengdu, Guangzhou, and Hangzhou. The new facilities—and the commercial innovation centers to be set up at each site—will work with the commercial operation the firm set up in Wuxi in 2017.

AstraZeneca has also partnered with state-owned bank CCIC to set up a $1 billion fund to foster biotech innovation in China.

The Healthcare Industrial Fund is intended to support domestic companies and partners including those based in the Wuxi International Life Science Innovation Campus.

Additionally, AstraZeneca says, the fund will support international companies that are looking to set up R&D operations and or partnerships in China.

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