CPHI China: New Trends in Globalization and Innovative Drug Markets

2024-6-21

CPHI China 2024, a premier event for the pharmaceutical industry in the Asia-Pacific region, opened its doors this week at the Shanghai New International Expo Centre (SNIEC). This three-day event, running from June 19-21, brings together industry leaders, innovators, and professionals from across the globe to explore new trends, technologies, and opportunities in the pharmaceutical sector.

The conference program at CPHI China 2024 includes over 100 sessions featuring presentations and panel discussions led by industry experts. Key topics include the impact of artificial intelligence and machine learning on drug development, strategies for navigating China’s evolving regulatory landscape, and the future of personalized medicine.

As global demand for pharmaceutical cooperation continues to grow, the development of new drugs has become a crucial track in the internationalization of the pharmaceutical industry, with its demand growing at an unprecedented rate. However, due to limited capacity and uneven distribution in some countries, the potential for collaboration in many emerging markets remains to be fully explored aimed at addressing this critical need. The first “Innovative Drug Outbound Forum” hosted by YAFO Capital in partnership with CPHI China took place on June 19. Focusing on crucial topics such as pharmaceutical production, distribution, and international cooperation, attendees engaged in vibrant discussions, networked extensively, and explored cost-effective solutions, fostering significant face-to-face business collaborations.

Among the notable presentations, Xiong Zhang, General Manager of the International Center of “E药经理人,” presented insights on the trends and challenges of China’s innovative drug out-licensing. Zhang emphasized China’s pharmaceutical industry is poised for global expansion through strategic partnerships and innovative licensing agreements. More specifically, “The previous global division of labor in the pharmaceutical industry was based on each country’s resource endowments and comparative advantages, a result of free market choices, with countries prioritizing cost and efficiency. However, the ongoing COVID-19 pandemic, coupled with trade protectionism and geopolitical conflicts, has introduced new changes to pharmaceutical globalization. Now, countries are primarily concerned with issues of safety, autonomy, and control.”

Following Zhang’s presentation, Amardeep Udeshi, Vice President of Eversana, explored alternative pathways for Chinese biotech and biopharma companies to penetrate the Middle East and North Africa (MENA) markets. Udeshi elaborated, “An aging population and high prevalence of lifestyle-related diseases are driving demand for healthcare services in the Middle East. Navigating regulatory landscapes and forging strategic alliances are key to unlocking the high-value MENA market for Chinese biopharma. “

Marco Cerato, Executive Vice President and Head of Global Business Development at Glenmark Pharmaceuticals, highlighted the transformative power of partnerships in globalizing Chinese pharmaceutical innovations. Cerato noted, “Barriers to entry are better managed by local expert players.”

Peter Zhang, Partner at YAFO Capital, explored deep into Singapore’s role as a gateway to Southeast Asian markets for pharmaceutical companies. Zhang concluded, “Singapore is an ideal site of choice for Phase I studies, a hub for biotech translational medicine and early discovery, and a bridge to Western countries, but this location is not suitable for Chinese biotech financing with no roots in Singapore nor for shell companies, rare disease research, or last-tier oncology trials.”

Chengfei Yuan, Tax Advisory Partner at PwC, addressed the critical aspect of tax strategies tailored for pharmaceutical businesses expanding into Southeast Asian markets. Yuan highlighted, ” The reason for the difficulty in managing overseas tax risks is twofold. On the other hand, companies are unfamiliar with and do not fully understand the tax laws and regulations of the investment location, making it difficult to conduct an in-depth and comprehensive analysis of common tax considerations. On the other hand, the lack of professional tax talent within the company leads to challenges in effectively addressing complex tax considerations.”

The day culminated in a dynamic roundtable discussion featuring industry experts, including presenters as well as Fan Zheng, the Managing Partner of YAFO Capital. The panelists engaged in an insightful dialogue, sharing their experiences and strategies for navigating emerging markets successfully. Discussions ranged from regulatory challenges to market dynamics, emphasizing the need for adaptable strategies to drive sustainable growth in diverse global landscapes.

As CPHI China 2024 continues, the atmosphere is charged with excitement and optimism. The event not only underscores the latest innovations but also fosters critical discussions on the future of the pharmaceutical industry in China and beyond.

About YAFO Capital

Founded in 2013, YAFO Capital is a Shanghai-based boutique investment and advisory firm, with a professional team in our China, U.S., and London offices. Partnering with Pharmaceutical companies, YAFO Fund mainly invests in global assets. YAFO Life Sciences is a leading advisory boutique focused on asset transactions. YAFO has built a strong proven track record and closed dozens of in-licensing and out-licensing transactions with global pharma and biotech companies. YAFO has been ranked as the No. 1 advisor for China cross-border licensing transactions in the past three years. For more information, please visit http://www.yafocapital.com

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