Editor's Note: Developing "new productive forces" has become an inherent requirement and important focus for promoting high-quality development in China. On February 29th, the meeting of the Political Bureau of the Communist Party of China Central Committee pointed out that this year's economic work should adhere to the principles of making progress while maintaining stability, promoting stability through progress, and breaking new ground after laying a solid foundation. Efforts should be made to vigorously promote the construction of a modern industrial system and accelerate the development of new productive forces.

Shanghai Zhangjiang, as an important engine for technological innovation in China, continuously nurtures epoch-making new productive forces with its unique innovation ecology and cutting-edge technology. In order to investigate the development achievements of new productive forces, the Zhangjiang Science City, Caixin Media, and the "STAR Daily" jointly launched the "Exploring New Productive Forces in Zhangjiang".

We conducted in-depth interviews: how enterprises in Zhangjiang innovate and start businesses with great vitality; and how industries in Zhangjiang move towards the "new" and strive for higher "quality".

Featured Interview: Junshi Bio (688180.SH, 1877.HK), Shanghai Junshi Bio Pharmaceutical Technology Co., Ltd.

Zhang Zhubing, Vice President of Junshi Bio and founding member

"Back then, in order to find a suitable place for innovative drug development, we visited many cities and finally got in touch with Zhangjiang Pharma Valley in Shanghai. The enthusiasm and support shown here for innovative enterprises left a deep impression on us." As a core founding member of Junshi Bio, Zhang Zhubing told the reporter of the "STAR Daily" about the entrepreneurial experience at that time.

Zhang Zhubing recalled that at that time, Zhangjiang Pharma Valley had accumulated technical experience in multiple areas such as pharmacological analysis, animal toxicology experiments, and the development of antibody drugs, which provided great assistance to the later research and development of Junshi Bio. Moreover, the high-level technical talents gathered in Zhangjiang Pharma Valley have provided Junshi Bio with a continuous source of innovation resources.

"Unlike elsewhere, any enterprise that truly innovates and conducts research and development in Zhangjiang Science City will definitely receive real support, and employees will also receive assistance," said Zhang Zhuobing.

After comprehensive comparison and evaluation, Junshi Bio finally landed in Zhangjiang Medicine Valley in 2012 and embarked on the road of entrepreneurship.

Today, many early-stage employees of Junshi Bio who participated in the research and development of innovative drugs have already settled and established their careers around Zhangjiang Science City, thanks to Zhangjiang's talent settlement policy. Some of their children are also attending local middle schools.

After 12 years of development, Junshi Bio, which started as a small company with a laboratory no larger than 300 square meters, has evolved into a well-known leader in innovative drugs in China.

Overlooking view of Junshi Bio's production base in Shanghai Lingang

Currently, Junshi Bio has 4 innovative drugs, including Toripalimab monoclonal antibody, Adalimumab monoclonal antibody, and Hydrobromide Doutorimid tablet, which have achieved commercial sales. Among them, Toripalimab monoclonal antibody is not only the first domestically produced PD-1 monoclonal antibody to be successfully listed in China, but also the first China independently researched, developed, and produced innovative biopharmaceutical to be approved by the FDA for listing. It represents an important step for Chinese innovative drugs to enter the world stage.

In China, Toripalimab monoclonal antibody has been approved and listed for 10 indications by the NMPA, covering lung cancer, nasopharyngeal cancer, urothelial carcinoma, esophageal squamous cell carcinoma, melanoma, breast cancer, and more. In August of this year, the new indication market application submitted by Toripalimab monoclonal antibody was once again accepted, making it the 12th indication for which the drug has applied for listing.

Globally, Toripalimab monoclonal antibody has conducted more than 40 clinical studies covering over 15 indications initiated by Junshi Bio in the United States, Southeast Asia, and Europe. Currently, Junshi Bio has nearly 30 products in clinical trials and more than 20 in preclinical stages.

Junshi Bio Lingang production base - automated aseptic filling line

Junshi Bio Lingang production base - automated production line

Zhang Zhuobing mentioned that in 2016, the drug market authorization holder (MAH) system, which was first piloted in Shanghai, and the launch of the Science and Technology Innovation Board in 2019, played a crucial role in the development of biotech, including Junshi Bio.

"The introduction and implementation of the MAH system enables the collaboration of research and development, production, and sales in a specialized and coordinated manner. This arduous and time-consuming systematic work has made great contribution to the transformation of innovative drugs. Junshi Bio is fortunate to be one of the first batch of companies to implement the MAH system."

"Developing drugs, especially innovative drugs, requires a long period of time, and people tend to provide little support for something that starts from scratch. However, the launch of the Science and Technology Innovation Board in 2019 has truly provided funding for non-profitable innovative enterprises, especially the biopharmaceutical companies that require large investments in the early stage, enabling comprehensive innovative research. The Science and Technology Innovation Board has not only helped Junshi Bio, but also played a significant role in the development of the entire Chinese biopharmaceutical industry." Zhang Zhuobing said.

It is worth mentioning that this year, innovative drugs have received unprecedented attention.

Following the mention and inclusion of innovative drugs in the Government Work Report at the beginning of the year, various governments at the national level and in cities such as Beijing, Shanghai, and Guangzhou have successively issued documents to support the development of the entire industry chain of innovative drugs. Shanghai and Beijing have also been approved as pilot cities for the optimization of clinical trial review and approval of innovative drugs.

Against this background, it is not so much that innovative drug companies have gained unprecedented development opportunities, as it is that they have taken on the important mission of promoting the development of the industry.

Zhang Zhuobing expressed his expectation for Junshi Bio to further internationalize in the future, promote more effective innovative drugs to achieve industrialization, and also look forward to strengthening cooperation with Zhangjiang Science City to drive China's innovative drug industry to a higher level.

"We look forward to witnessing Zhangjiang Science City become an international first-class scientific city comparable to Boston and San Francisco. Although there is still a gap in our product output compared to them, our development speed is much faster. I believe that one day Zhangjiang will also reach the world-class level," Zhang Zhuobing said.

Junshi Bio Shanghai Lingang Production Base - Fermenter

Junshi Bio Lingang Production Base - Automated Packaging Cold Storage

01

"The overall health level of the human race determines the upper limit of social development. Without a healthy and vigorous population, the healthy development of other industries is not possible, and of course, it cannot promote the improvement of national productivity."

Reporter: How do you view the inclusion of innovative drugs in the new category of production forces? How do innovative drugs promote the development of national productivity? Zhang Zhuobing: The most basic yet important pursuit of humanity is health and longevity. The emergence of other high technology can help achieve automation and informatization, making people's lives more convenient and efficient, but these play a supportive role. Healthy and high-quality living is the cornerstone of society's upward development.

Zhang Zhuobing: The most basic yet important pursuit of humanity is health and longevity. The emergence of other high technology can help achieve automation and informatization, making people's lives more convenient and efficient, but these play a supportive role. Healthy and high-quality living is the cornerstone of society's upward development.

Based on scientific discoveries, innovative drugs are an important part of the development of human health. Just take a look at the various problems that humanity needs to solve in the future, and we will find that biotechnology and biomedical are one of the most important fields. In my opinion, incorporating innovative drugs into new productive forces is determined by the innovative productivity of the drugs themselves, on the one hand, and the important position of innovative drugs in the future industrial structure, on the other hand.

In the long run, the overall level of human health determines the upper limit of social development. Without a healthy national physique, it is impossible to have the healthy development of other industries and promote the improvement of national productivity. Just like it is difficult to imagine an unhealthy team having the ability to continuously develop high-tech products like AI.

In this sense, the biomedical industry, dominated by innovative drugs, is a core component of future industries and an important force to promote the improvement of national and social productivity.

Reporter: Does including "innovative drugs" as a new productive force duplicate the meaning?

Zhang Zhuobing: From a professional perspective, "new drugs" refers to the relative comparison with "old drugs". The birth of new drugs must undergo head-to-head clinical trials with old drugs, which statistically demonstrate increased benefits and reduced risks. Only then can the new drugs be considered useful. Therefore, the "new" in innovative drugs does not simply refer to the form of a "new model", but rather refers to specific clinical practices and inherent differences in quality.

When a new drug is released, the old drug faces the fate of being replaced. When a newer new drug is introduced, the original new drug becomes an old drug. Therefore, the research and development of innovative drugs is endless, just like innovation itself is endless. As long as humanity continues to pursue health, it will definitely drive the biomedical industry to develop more new products through new scientific discoveries.

Although innovative drugs themselves contain the word "new", including them as new productive forces is not a repetition. Innovative drugs are a subset of new productive forces and are covered within a broader range of productive forces.

Reporter: Compared to the early years, do innovative drugs have new connotations now?

Zhang Zhuobing: After the early development, we have a new understanding of the connotation of innovative drugs. Simply put, with the development of human society, the proportion of the health industry in the national economy is increasing. This is more obvious in developed areas such as Europe and the United States. When the material standard of living of a region's people improves and the social wealth increases, the demand for health becomes more important.

The health index of humans is getting higher with the increase in average life expectancy. Today, the state of life for a person in their sixties or seventies is completely different from that of several decades ago. They still have abundant energy to invest in work, which is an indication of the improved quality of life.

Conversely, the increase in life expectancy not only changes the way of life, but also raises higher requirements for pharmaceuticals. The research and development of innovative drugs is no longer limited to prolonging human life, but more so in improving the quality of life.

Reporter: What are the real pain points facing the innovative drug industry at present? In which aspects do the policies need to be improved?

Zhang Zhuobing: The current description of innovative drugs commonly uses terms like overheating and repetitive competition. This is a descriptive phenomenon of the industry, which is correct. However, the real problem of innovative drugs has always been these three: large investment, long cycle, and high risk. We need to understand that over 90% of new drug development will fail.

In China, innovative drug companies still face some pain points. For example, our medical insurance system often requires high price reductions for innovative drugs while trying to meet the needs of as many patients as possible, making it difficult for innovative drugs with large investments to recoup costs. At the same time, there is still room for improvement in the efficiency of drug approval, hospital admission, and prescription circulation processes.

Another very important point is that compared to other industries, our pharmaceutical industry has a lower level of internationalization and lacks strong competitiveness in the international market. For an innovative drug, the benefits of global sales far exceed those of domestic sales. In terms of market size alone, China's entire innovative drug market is still less than one-tenth of the world market.

Although the current international environment is increasingly complex and changeable, I hope that the entire industry can still maintain an open attitude, adhere to the requirements of internationalization and high standards in the research and development of innovative drugs, and truly increase its discourse power in the international market.

In recent years, China has continuously increased its support for the development of innovative drugs. Local governments, including Shanghai, have gradually formed a system to guide the development of innovative drugs. In order to focus on the long-term development of innovative drugs, we still hope to continue to strengthen various aspects of work, such as increasing financial support, hierarchical medical insurance payment, personalized talent introduction and training.

02

"Establishing a balanced dynamic is crucial for the development of innovative drugs. Without a balanced dynamic, we cannot see a relatively certain future prospect, which will lead to doubts and loss of confidence in the entire industry."

Reporter: What kind of forces are needed to promote the development of the innovative drug industry?

Zhang Zhuobing: The key to the long-term development of the innovative drug industry lies in whether society has established an effective system for the transformation of scientific research results, which directly affects the industrialization efficiency of biotech companies. Among them, the payment end plays a crucial role. If the value of innovative drugs cannot be reflected at the payment end, companies cannot recover losses, and the negative impact will spread throughout the entire industry chain, destroying the value of the entire industry chain.

As I mentioned earlier, true innovative drugs are launched after head-to-head trials, and their clinical value has been proven to be higher than that of old drugs. If new drugs cannot replace old drugs at the payment end, even if they have been approved, patients cannot benefit from them, and their social value cannot be realized.

Now the country has a policy called "three-linkage of medical services", which is presided over by the State Council and involves the cooperation of the Drug Administration, the Health Commission, and the Medical Insurance Bureau. Together with the enterprises, it establishes a scientific and transparent system for approval, admission, prescription, and payment with the interests of patients as the core. Apart from research and development and production, the role of enterprises is largely passive. Therefore, I believe that enterprises should participate more in the "three-linkage" cause and jointly promote the establishment of the system.

At the same time, we have also seen that some innovative drug companies do not truly prioritize the interests of patients in the process of developing products. This is an area where companies need to be vigilant. Especially during the industry's "winter", a high standard and requirement for themselves is the foundation for "surviving the winter".

Reporter: What impact does the cold investment and financing have on the competition pattern of the medical industry and innovative drugs?

Zhang Zhuobing: The cold investment and financing has indeed had a significant impact on the entire pharmaceutical industry, and its impact is twofold. On the positive side, it will eliminate homogeneous projects and backward companies, reshuffle and plan the market pattern, and guide competition to return to rationality. On the negative side, it will make investors lack confidence, be overly cautious in investment, and make it difficult for excellent projects to obtain development funds.

Our country's pharmaceutical industry has only gone halfway so far, and the development of innovative drugs has been encouraged by the country for only 10 years, and even the development of a new drug takes 10 years. China's innovative drugs are still a very young industry, but the entire industry chain still has great uncertainty, sometimes surging high and sometimes falling to the bottom.

It is very important to establish a balanced dynamic for the development of innovative drugs. If there is no balanced dynamic, everyone cannot see a relatively certain future, and will have doubts and lose confidence in the entire industry.

In fact, the development of biomedical industry has also experienced ups and downs in history, but overall it is still moving forward. Similarly, in the short term, the possibility of a rebound in China's pharmaceutical industry is small, which is closely related to the national economy and the internationalization of the pharmaceutical industry. In the long run, based on human pursuit of health, the biomedical industry is always a sunrise industry.

In the current cold situation, if companies can change the mentality of extravagance and waste, and focus on doing a few projects seriously, after accumulating for a certain period of time, they will see the industry's outbreak again.

Reporter: Due to the previous rapid expansion, the number of new drug INDs and approvals in our country has risen rapidly in recent years. Will the industry return to calm after this wave of enthusiasm? How will future innovative drugs develop?

Zhang Zhuobing: Yes, I think it will return to calm.

Since 2015, the country has been supporting the development of innovative drugs, and by 2018, Hong Kong's 18A, the MAH system implementation, the launch of the Science and Technology Innovation Board, and other factors have led to rapid development in the biomedical industry. Many overseas returnees have set up companies in China, and all aspects have participated. However, looking back now, companies that actually produce drugs are few and far between, and the competition for homogeneity has led to a growing bubble. This is a phenomenal problem we currently face.

The development of innovative drugs itself is a life-or-death situation, and failure is the norm in the industry. Only when the bubble bursts can the entire industry calm down and see the essence of innovative drugs, truly understanding how to develop them.

After experiencing more than a decade of ups and downs, including Junshi Bio, companies have survived. Then, everyone will wonder why we were able to survive. In fact, the key lies in improving product quality and producing drugs that truly benefit patients. When the entire industry starts to focus on this core value, true innovative drugs will definitely receive attention, and the entire industry will develop.

In the past, the industry was at its peak, thinking that there was gold everywhere and neglecting the most valuable things. However, after going through a period of calm, we have learned to better control risks.

Similarly, in the cold winter, the investment value in the industry has generally shifted. In addition to focusing on the research and development capabilities of companies, attention is also paid to whether companies have market operation capabilities and long-term competitiveness. Both capabilities are important.

03

"Innovative drug companies must meet high standards and demand the best from themselves. It may be difficult to start, but it is a process of accumulation. When we do the systematic work well, as long as we can develop one drug, we can develop 10 or more drugs."

Reporter: Junshi Bio's 'Tuoyilucent' is the first innovative biopharmaceutical developed and produced in China to be approved by the FDA. In your opinion, how far is China in terms of the development of innovative drugs going global, from 'borrowing boats' to 'building boats'?

Zhang Zhuobing: In fact, before the approval of Tropilimab, Junshi had already completed a round of BD licensing. In 2020, we licensed the JS016 neutralizing antibody against COVID-19 (License out) to Eli Lilly, and subsequently obtained emergency use authorization in more than 15 countries and regions including the United States. JS016 has been used by over 0.7 million patients worldwide, saving the lives of at least 0.01 million people. This is a typical case of a Chinese innovative drug going global through BD licensing.

Later, we started to go global along the entire industry chain, from research and development to production and then to clinical hospitals. Our quality met FDA requirements, and Tropilimab was successfully launched in the United States under this circumstance.

After Tropilimab was launched in the United States, the price in China was 33 times lower than in the United States. From a broader perspective, this means that the value of our entire industry chain is 33 times lower than that of the United States. When calculating the return on investment, if only the licensing out goes global, the return may only be the value of the research and development stage. However, if the entire industry chain goes global, the return will expand to the entire industry chain.

This raises a question: will China have multinational corporations (MNCs) in the field of biomedicine that achieve internationalization from research and development to listing? This means that Chinese innovative drug companies must have the ability to go through the entire chain of access, approval, and sales in overseas markets. Currently, China does not yet have companies with this capability, but it will definitely happen in the future.

Reporter: What are the new changes in the pattern of innovative drugs going global?

Zhang Zhuobing: There can be various ways to go global. We can not only license out, but also license in. As long as we have our own industrialization platform and clinical transformation capabilities, we can also introduce some drugs from overseas markets and then go global again after transformation in China, expanding the depth and breadth of our research and development.

In fact, I think the discussion on "going global" in China is one-sided, or fundamentally unnecessary, because innovative drugs are inherently intended for internationalization.

If we look at innovative drug companies in other countries around the world, even some small companies, they think about internationalization from the beginning of project approval. However, currently Chinese companies do not have the capabilities of MNCs, and our overseas cooperation has just begun, so the action of going global is emphasized. As an innovative drug company, you need to understand from the beginning that your product must have the ability to go global, otherwise how can you demonstrate innovation?

Reporter: The approval of Tuxipritumab in the United States can provide what kind of reference for domestic innovative drug companies?

Zhang Zhuobing: Junshi actually just explored a path for everyone. The indication for Tuxipritumab in the United States is a relatively small indication, but it meets the unmet clinical needs.

The large population base in China has helped us improve the efficiency of research and development, enabling us to obtain approval for indications that are highly prevalent in China in the United States. But more importantly, from project establishment to clinical research and development, production process establishment, GMP operation, and so on, every step is strictly in accordance with FDA standards. Especially in the process of clinical trials, we work together with hospitals to pursue high standards, and many hospitals have reached a level of zero defects, ensuring that our clinical data is complete and reliable.

In other words, innovative drug companies must meet high standards and requirements. It may be difficult at the beginning, but it is an accumulation process. When we do the systematic work well, as long as we can produce one drug, we can produce 10 or even more drugs.

(Contributions to this article were also made by intern reporter Xu Ye)