China biotech becomes powerful player in research for new drug therapies

A recent CNN report cast a spotlight on Akeso, a Chinese biotech company whose immunotherapy ivonescimab drug, now in clinical trials, demonstrated superior results to the flagship cancer treatment Keytruda, developed by US-based Merck Sharp & Dohme.

While it is not the first time Chinese biotech firms have made waves, this moment is particularly significant. Mainstream Western media, not just trade outlets, are starting to take China's pharmaceutical innovations seriously.

Keytruda is a medicine that helps the immune system fight cancer by blocking a protein called PD-1, which cancer cells use to hide from the immune system. Ivonescimab is a newer type of medicine that not only blocks PD-1 but also stops tumors from growing new blood vessels, potentially making it more effective against certain cancers.

Ivonescimab's impressive performance in clinical trials, particularly in treating lung cancer, has certainly captured attention. However, the true test will come when the drug is applied to a broader range of cancers.

Bear in mind that Keytruda has dominated the world's oncology market with US$29.5 billion in sales, benefiting from its first-mover advantage and an established global distribution network.

For now, comparing Akeso's ivonescimab drug directly with Keytruda seems premature. More data is needed to determine whether it can surpass Keytruda in other therapeutic areas, while Akeso still has a long way to go in building a marketing network that rivals Keytruda's.

The power of partnerships

Interestingly, the market is now debating whether a new trial drug collaboration partnership between Akeso and US-based pharma giant Pfizer, announced coincidentally with the CNN report, could prove to be a game-changer.

Together, Akeso and Pfizer plan to explore the potential of combining ivonescimab with several of Pfizer's "antibody-drug conjugates," a type of targeted cancer therapy that combines an antibody with a powerful drug or toxin, for treating various solid tumors. The antibody acts like a guided missile, directing the toxic drug specifically to cancer cells, which helps minimize damage to healthy cells.

The new partnership mirrors an earlier collaboration between Merck Sharp & Dohme (MSD) and Kelun-Biotech, another Chinese biotech company, to develop antibody-drug conjugates for cancer treatment. While that development has been slower than expected, the partnership continues to progress.

With Pfizer and MSD long-time competitors in oncology and antibody-drug conjugates, the competition now extends to draw Akeso and Kelun into the mix, as both teams aim to advance high-margin therapies that could reshape cancer treatment.

Combination therapies: the future of oncology

As competition intensifies, one clear trend is emerging: combination therapies. MSD has been testing combinations of Keytruda with other treatments for years, seeking ways to extend the lifespan of their blockbuster drug.

This "me-better" strategy – making incremental improvements to existing treatment regimens – becomes especially important as blockbuster drugs like Keytruda face growing competition and looming patent expirations. For Keytruda, the search for new, more effective combinations may be key to maintaining its market dominance in the face of emerging challengers.

It's also important to note that Sino-Western partnerships are becoming increasingly multifaceted.

These collaborations are no longer limited to cancer treatment alone. Over time, we can expect to see these partnerships extend into other therapeutic areas, as both sides stand to benefit from quicker access to regulatory approval in both the US and China. The ability to conduct clinical trials in multiple regions and fast-track approval processes is invaluable in today's competitive pharmaceutical environment.

That said, collaboration is not without its risks.

As MSD's partnership with Kelun-Biotech has shown, the development of some candidate drugs remains promising, while other candidates have faced setbacks and been returned to the Chinese company.

Aligning corporate goals and expectations is not always easy, and any Sino-foreign partnerships will need to ensure that innovation capabilities and product suitability are in sync. Without a strong product-market fit, partnerships are unlikely to thrive in the long run.

Competition and cooperation

This dynamic reflects a profound shift in the global pharmaceutical landscape. What once appeared to be a simple rivalry between Western pharmaceutical giants and Chinese biotech innovators has evolved into a more complex ecosystem, where cooperation and competition coexist.

The future of the industry will not be determined by which side prevails, but rather by which companies can develop the most effective and profitable therapies. In this new environment, predictability is a luxury and the stakes are higher than ever.

As China's biotech sector matures, its future looks increasingly promising.

Chinese firms are capitalizing on advances in AI-powered drug research and tapping into a vast pool of clinical trial participants, providing a unique advantage in developing therapies that meet the needs of both domestic and global markets.

Chinese companies are also accelerating their collaborations with global pharmaceutical companies, ensuring that they remain at the cutting edge of innovation.

The Akeso-Pfizer partnership exemplifies this dual strategy. The joint commitment to both external partnerships and internal research and development allows both sides to expand their pipeline of potential blockbuster drugs while maintaining control over their own developments.

This combination of Western partnerships and domestic innovation is becoming a hallmark of China's biotech sector. In the coming years, we are likely to see a surge of new drugs developed by Chinese companies, supported by global collaborations.

The global impact of China's biotech rise

The days of dismissing Chinese pharma as mere imitators are over.

Today, the question is no longer whether China can innovate but how quickly these innovations will reshape the global pharma landscape.

The Chinese biotech industry is entering a new era – one that is no longer about whether Chinese companies can produce world-class drugs, but rather how rapidly and effectively they can do so.

With the right mix of collaboration, innovation and regulatory support, China's biotech companies are poised to become global leaders.

For Western companies, this shift represents both opportunities and challenges. For investors, it signals a new frontier in the search for groundbreaking therapies.

The future of global pharma won't automatically be dominated by the old guard anymore. It will be defined by those who can successfully navigate the rapidly evolving world of innovation, collaboration and competition. And in this new landscape, China is not just a participant; it is a force to be reckoned with.

(The author is an adjunct research fellow at the Research Center for Global Public Opinion of China, Shanghai International Studies University, and founding partner of 3am Consulting, a consultancy that specializes in global communications.)