Topics in this section: - China's health care innovation shifts focus to Greater Bay Area - Big data could redraw contours of China's health-care capability - Health care catches eyes of private equity, venture capital - Better IP protection critical for China pharma push - State-backed private equity fund to spur growth - Creating a new scientific community - Oncology therapies lead China pipelines - Guangdong province's biotech manufacturing drive
These analyses are by Bloomberg Intelligence senior analyst Francis Chan and contributing analysts Mia He and Jamie Maarten.
China's Greater Bay Area could emerge as a technology incubator for its national health-care system, driven by the region's rich concentration of artificial intelligence and big data firms. Tech may fuel substantial changes to China's health-care practices, including treatment delivery and illness diagnosis while enhancing accessibility of products and services.
Big data could redraw contours of China's health-care capability
Big data, AI and blockchain could loom large in China's modernizing health-care system, giving providers greater power to diagnose and treat its enormous population. China's medical resources -- including its top-tier hospitals -- are typically centralized in urban centers. New technology could allow health-care providers to diagnose and treat patients in suburban and rural areas more effectively, and at lower cost than before. Shenzhen-based iCarbonX -- with its AI know-how -- is applying genomics and data to deliver customized health-care services.
Tencent-backed WeDoctor Holdings and Ping An Good Doctor may capitalize on data-sharing guidelines by delivering online, cross-border medical services. Regulatory and security guidelines for patient health data must be revised for these services to flourish.
Health care catches eyes of private equity, venture capital
China's Greater Bay Area is drawing greater health-care investment from private equity (PE) and venture capital (VC), signaling a possible shift from the longstanding, weighty influence of Beijing and Shanghai. Innovative medicine, disruptive medical technology and private health-care services are among the areas winning outside investor interest. New investment remains heavily concentrated in Beijing, and in Zhejiang and Guangdong provinces, yet the average investment in Guangdong is relatively small, implying more early-stage investment due to the government's innovation push.
Health care dominates exit deals in Guangdong province. The resulting liquidity may attract more venture capital and private equity investment.
Better IP protection critical for China pharma push
Raising intellectual property protection guidelines in China is crucial for biopharma and healthcare development in the Greater Bay Area, after Chinese enforcement of patents and IP protection has been targeted by trading partners, especially the U.S. and Europe. Resolving intellectual property rights disputes through arbitration, mediation and consultation is encouraged while Hong Kong's IP protection strengths, with international standards, should also help.
State-backed private equity fund to spur growth
China's 100 billion yuan ($14.8 billion) Greater Bay Area Homeland Development Fund will invest in AI, research centers, infrastructure, property and transportation projects in the area that supports biotech development from basic research to clinical trial and commercialization efforts. Chinese biotech companies will be better able to compete with international peers with access to such resources, while improved facilities and supply chain logistics can also attract foreign companies to invest and partner in China.
Creating a new scientific community
The Greater Bay Area initiative should smooth frictions between China and its special administration regions of Hong Kong and Macau. In particular, data and technology can be exchanged between the 3 jurisdictions. Cross-border research and data sharing will benefit Hong Kong-based biotechs and give them access to China's vast patient pool, while mainland companies can benefit from the talent and facilities concentrated in Hong Kong, which has 6 research universities and two of the top medical schools in Asia.
Connectivity models in the U.S. Bay Area and Boston biotech hubs can be recreated to drive partnerships and drug development.
Hong Kong's plan to be a global research hub:
Oncology therapies lead China pipelines
Oncology accounts for more than 30% of new drugs being investigated in China and cell and gene therapies especially require sophisticated manufacturing facilities. Greater Bay Area manufacturing upgrades will improve the quality of drugs being made in China and reduce the cost of producing these drugs for clinical trials and, eventually, commercialization.
There are 13 cell therapies registered with the Chinese drug regulator and technical guidelines for producing cell therapies were formalized in 2017. Quality control, testing and production standards are now clear.
Guangdong province's biotech manufacturing drive
Guangdong wants to step up its biopharma capabilities and has attracted international drug developers to partner local ones by building R&D and manufacturing facilities. A lower cost of living than Hong Kong and Macau which it is integrating with as part of the GBA make the province an attractive alternative manufacturing location. Manufacturers have obtained international accreditation from the U.S. FDA and College of American Pathologists, certifying facilities to produce drugs for multinational companies and signaling a shift of perceived quality in China.
Biopharma manufacturing output grew almost 12% in 2018 in Guangdong.
