China may have outranked Europe for the first time in the number of new medicines it developed through to launch last year. But analysts told Endpoints News that Europe still has the edge when it comes to the quality of drug innovation.
An annual report by the European Federation of Pharmaceutical Industries and Associations (EFPIA) published last month showed that China displaced Europe to take second spot as an originator of new active substances to reach the market.
China was the developer of 25 new substances that were launched last year, putting it just behind the US, which remained on top with 28. Europe claimed 17 new launches in the same period.
Noteworthy launches from Chinese drugmakers included Innovent Biologics’ CAR-T therapy Fucaso for multiple myeloma, which was approved by China’s NMPA in July last year. Months before, in April, Jiangsu Hengrui Pharmaceuticals’ PD-L1 antagonist Ariely secured a nod for small cell lung cancer.
The switch in rankings between China and Europe is the culmination of around a decade of increased R&D investment in China and better regulatory transparency in the country, Barclays’ EU Pharmaceuticals equity research analyst Shirley Chen said. There are also more partnerships between Chinese drugmakers and those based in the US, she added.
The global share of EU-based biopharma companies has also declined over the past ten years, while China more than quintupled between 2016 and 2021, EFPIA director general Nathalie Moll said in an email.
But China still has some way to go in moving past “copycatting” drugs towards more original R&D work, Chen said, with Europe retaining an edge in delivering “highly original therapies.” China is more of an emerging market while Europe benefits from a mature and established biopharma ecosystem, she added.
Nathalie MollEurope’s innovation advantage is supported by relatively strong intellectual property protections and collaborative networks between academia and industry, Chen said. The continent is also leading the way in terms of academic papers on more “groundbreaking” approaches such as gene, cell and tissue therapies, Moll added.
In June 2023, the FDA greenlit the first gene therapy for Duchenne muscular dystrophy in the form of Roche and partner Sarepta Therapeutics’ Elevidys. In December, the agency approved Novartis’ first-in-class complement factor B inhibitor Fabhalta for paroxysmal nocturnal haemoglobinuria.
It’s not necessarily that China is just a “fast follower” but, by and large, it’s more focused on creating competitive assets within an existing drug class compared with Europe’s track record in first-in-class innovation that addresses global unmet needs, said Daniel Chancellor, VP of thought leadership at Norstella. The drugs developed in China are also primarily for Chinese patients, while those made in Europe are exported to other markets, he added.
For instance, in May last year, the NMPA greenlit Chinese company Betta Pharma’s EGFR inhibitor Surmana for certain patients with second-line locally advanced or metastatic non-small cell lung cancer. The drug offers an alternative to AstraZeneca’s Tagrisso for Chinese patients. Tagrisso, which is also an EGFR inhibitor, won full US approval in the same NSCLC setting back in 2017.
“However, China’s rapid progress, fuelled by significant investment and a large talent pool, suggests that the innovation gap may continue to narrow in the coming years,” Chen said.