China’s life-science industry has advanced from being a follower to a peer and, in some areas, a world leader, according to Liu Da – managing director of the CR-CP Life Science Fund and chairman of the Hong Kong Life Sciences Investment Association.
In an exclusive interview with China Daily on Hong Kong’s role in the high-quality globalization of the nation’s biotechnology industry, he said it’s important to evaluate the effectiveness of any model before adopting it, noting that China is forging a new model for biopharmaceutical development.
In his view, such a model is powered by two core strengths – a vast market of 1.4 billion people, backed by a comprehensive industrial system and the integration of artificial intelligence with life sciences – which overcome traditional research and development cycle constraints.
According to the National Medical Products Administration, China approved a record 76 innovative drugs for market launch last year. The country’s research and development pipeline now accounts for roughly 30 percent of the world’s total, ranking second worldwide. In 2024, the nation conducted over 7,100 clinical trials, putting it ahead of most peers and rivaling the United States in trial volume in several therapeutic areas.
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Liu’s analysis of global industry data from 1980 to 2020 reveals that most biopharmaceutical sub-sectors are dominated by two to three leading companies that capture the majority of industry profits. He believes that, for domestic biotechnology companies to succeed, they must focus on specific sub-sectors to build up international competitiveness and rank among the top three worldwide.
The biotechnology sector adheres to the principle of “survival of the fittest”, says Liu, emphasizing that a successful initial public offering in the Hong Kong Special Administrative Region is merely the beginning of competition. He identifies three types of companies with long-term growth potential – those achieving business model shifts through innovation, people-oriented companies addressing large healthcare accessibility, and technology breakthroughs overcoming industry bottlenecks.
The NMPA reported that, in the first quarter of this year, Chinese biotech firms recorded a milestone transaction value of $60 billion in cross-border out-licensing activities, representing a 73-percent increase year-on-year.
On Hong Kong’s role as a fundraising center for biotech companies, Liu said the city should not follow the Nasdaq pattern. Instead, its core value lies in establishing a unique Asian financial center in life sciences. The SAR’s strengths include a massive base of over 2,000 biotech companies on the Chinese mainland, internationally aligned legal and financial systems, a mature cluster of family offices, and a bilingual business environment, making it an ideal hub for cross-border capital operations.
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He also points out a significant shortcoming – Hong Kong lacks long-term professional funds deeply rooted in life sciences. “While the US and European markets have established mature healthcare investment fund systems, this gap presents a development opportunity for Hong Kong’s stock market,” he said.
Liu is optimistic, calling this the best era for China’s life-sciences industry. He reminisces that, two decades ago, when he returned from the US, China lacked independently developed innovative drugs. Now, it stands as a global leader in biotech innovation, research and development efficiency, as well as commercialization.
The sector, he said, has achieved a historic leap, moving from following paradigms to proactively building a new industry ecosystem.
Contact the writer at irismuk@chinadailyhk.com