Pfizer seeks deals with biotech firms in China

Bloomberg

Pfizer Inc is on the hunt for partnerships with Chinese biotech firms developing novel drugs, as the American pharmaceutical giant regroups after Beijing’s aggressive price-cutting campaign eroded profit margins in its mainstay blockbusters.
The company is embarking on a strategic shift to maintain growth in the world’s second-largest drug market after China slashed prices for off-patent medicines by more than 90% in some instances.
Some of that growth will come from licensing promising drug and vaccine candidates from local up-and-comers, rather than from its own pipeline, said Christopher Hickey, Pfizer’s Beijing-based senior director for global policy.
“The Chinese biotech sector has significantly expanded in the last several years,” Hickey said in an interview in Beijing. “The opportunities are simply growing in leaps and bounds
in China for those types of
partnerships.”
In July, Pfizer entered a deal with vaccine-maker CanSino Biologics Inc to promote its meningitis vaccine in China, which has yet to secure regulatory approval. Then in September, it invested $200 million in another Chinese biotech, CStone Pharmaceuticals, for a 9.9% stake and licensed its experimental cancer therapy for the mainland market.
Such tie-ups are becoming increasingly common between local drug startups and established western pharmaceutical firms, as China’s nurturing of its biotech sector starts to bear fruit. Last year, Amgen Inc. paid $2.7 billion for a 20.5% stake
in Beijing-based BeiGene Ltd, whose cancer therapy Brukinsa later became the first Chinese cancer drug approved for sale in the US.
Eli Lilly & Co has also licensed cancer therapies from local firms, and is co-developing a Covid-19 antibody cocktail with Shanghai Junshi Biosciences Co.
This pivot to local partnerships has taken on increasing urgency as western pharmaceutical firms become all but shut out of China’s generic drugs market.
Pfizer’s off-patent drugs like lipid-lowering Lipitor and
hypertension medicine Norvasc previously underpinned growth, making it the biggest foreign drugmaker in China.
Those plans have been upended since Beijing started driving down the prices of generic drugs through a fierce bidding process for supply contracts to public hospitals.
With local makers bidding at prices up to 90% lower for drugs that treat everything from diabetes to schizophrenia, western pharmaceutical firms have little hope of securing any agreements.