Key incentives for doing business in China: Interview with Dan Zhang of Fountain Medical Development Ltd.

December 17, 2014 Erin Righetti

ChinaBio® Partnering Forum 2014You hear it a lot: China is the next big thing for life science companies, and any company interested in establishing a presence in China would be tapping into a lucrative, growing market. And it’s true: China is now the world’s second largest healthcare market and is on track to be the largest by the year 2020. China has a growing population, and a growing demand for medicines.

partnering360:Insight recently interviewed Dan Zhang, Chairman and CEO of Fountain Medical Development Ltd. We asked Dan about the trend in China of international global players cutting deals with domestic players and why Fountain Medical values ChinaBio® Partnering Forum 2015 in Shanghai April 15–16.

On China’s effort to meet the growing demand for medicines

“Medicine is definitely one of the hottest areas government has to invest in. One dollar invested by the government will induce more than one dollar from the private sector. We see tremendous growth of VCs in China, especially in the biotech sector, and also, growth in non-traditional investors. [W]e think in the next 5–10 years down the road you will see innovative products being approved in China, either simultaneously with the global markets, or first being done domestically in China for specific needs like Hepatitis B, drug resistant tuberculosis, and certain types of cancer like gastrointestinal cancer and liver cancer.”

On the role of international partnerships in future innovation

“We have seen two phenomena. One is international clients, international global players, began to cut deals with domestic players. For example, BMS partnering with Simcere, the Roche-Ascletis deal, and Merck Serono with BeiGene, to name a few. That has become popular now, to work with global giants. Another phenomenon is taking place domestically with the returnees. They bring new technology, a new know-how, and quality management systems to China. They become innovators, also. In my company portfolio, we are doing 44 innovative drug development protocols right now, and half are with multinationals, half are with returnees.”Dan Zhang of Fountain Medical Development Ltd.

On the key incentives for doing business in China

“China markets will inevitably continue to grow. Maybe in double digits, perhaps the lower end double digits, but still much faster than the global average. So it’s just a matter of time until China becomes number one. With that, all the global companies, even smaller ones, have to think about where their future licenses come from. They have to do something in this market. That’s the economic incentive. On the other hand, there are other incentives such as the cost for scientists. I think China still has the advantage over the US and Europe. Which means even now, companies can’t think about China indications alone. For global drug development, it pays to set up something in China where the cost is low and where you could kill two birds with one stone. The data support and regulatory requirements in China support European and US filings.

“For money on the one hand and talent on the other, I do see promising signs for China to be positioned as the next potential innovators in the biotech pharmaceutical field.”

On Fountain Medical’s strategy at ChinaBio® Partnering Forum

“ChinaBio® Partnering Forum has benefited us in several ways. First, it gives us a chance to really interact with global clients, and also with those clients who may not be able to know China in the first place. [W]e also learn and directly benefit from the feedback from the participants, so we can know what they’re looking for, what kind of questions they have in their minds, and what are the hurdles in the psychological parts that we have to resolve. And how we can mentor, educate and communicate with them on a continuing basis. The program has one session on that every year.  It gives us a chance to have repeated interaction with clients. So far in my mind, it is the best program we have ever had for my company.

“China is a country where, if you look back 30 or 40 years ago at the population, you wouldn’t have considered China. Now everybody thinks about China. It’s up to our clients—you—to take quick action and not wait anymore. Start from small stakes, touch the market. After all, this is going to be the largest pharmaceutical market, so it pays for you to do something about it.”

Fountain Medical will be at ChinaBio® Partnering Forum, April 15–16 in Shanghai, China, along with many leading industry dealmakers from more than 400 companies looking to enter into strategic alliances.

Register now to meet Fountain Medical and other companies at ChinaBio® Partnering Forum in Shanghai!

You can read the full interview on partnering360® Insight.

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