AI + Pharmaceuticals Emerges as a Hot Investment Track in the Healthcare Field - Biopharmaceutical Industry Research and Analysis
-
Biopharmaceuticals are one of the most dynamic and promising high-tech industries in the world today, as well as one of China's national strategic emerging industries. According to statistics, it takes an average of 10-15 years and costs approximately $2-3 billion to bring a new biopharmaceutical from research to market.
Biopharmaceuticals involve the use of biotechnology to produce natural active substances present in living organisms. Their active ingredients are typically biologically active proteins, DNA, viruses, cells, or tissues, administered via direct tissue injection. The preparation of these drugs heavily relies on the cultivation of biological tissues/cells and often cannot be precisely replicated.
The raw materials for biopharmaceuticals are primarily natural biological materials, including microorganisms, humans, animals, plants, and marine organisms. With advancements in biotechnology, artificially engineered biological materials have become the main source of raw materials for biopharmaceuticals. Examples include animal materials obtained through immunization methods and microbial or other cellular materials produced by altering genetic structures.
The biopharmaceutical industry is a perpetual 'sunrise industry' and a powerful engine driving regional economic growth. With favorable policy support, China's biopharmaceutical sector is experiencing rapid expansion.
Biopharmaceutical Industry Research and Analysis
Under targeted policy measures, the Yangtze River Delta region currently contributes 30% of the nation's biopharmaceutical output value, 30% of drug sales, and 70% of domestically developed Class I new drugs. Since the implementation of the Plan in 2022, the policy effects promoting high-quality development of the biopharmaceutical industry in leading cities of the Yangtze River Delta—such as Shanghai, Nanjing, Hangzhou, Suzhou, and Hefei—have continued to expand.
1. Moderna's First Pharmaceutical Plant Project in China Commences Construction
According to the Shanghai Municipal Commission of Economy and Informatization and the Minhang District Government, on the afternoon of November 6, Moderna, a global pharmaceutical giant from the United States, broke ground on its first Chinese R&D and production headquarters in Shanghai. The project is located in the Xinzhuang Industrial Zone, covering an industrial land area of 269.58 mu (approximately 17.97 hectares) with a total investment of approximately 3.6 billion RMB. It stands as the largest foreign-invested benchmark project in China's biopharmaceutical sector to date.
As a key project in Shanghai's biopharmaceutical field, Moderna is a multinational pharmaceutical and biotechnology company headquartered in the United States. Since its establishment, it has transformed from a research-focused company advancing projects in the messenger RNA (mRNA) field into an enterprise with a diverse clinical portfolio of vaccines and therapeutic drugs.
Biopharmaceuticals are one of Shanghai's three leading industries. As early as 1993, Shanghai identified modern biology and pharmaceuticals as a high-tech industry for prioritized development. Over the past 30 years, Shanghai's biopharmaceutical industry has grown from an industrial output value of less than 5 billion RMB to nearly 200 billion RMB in industrial output and approximately 900 billion RMB in industry scale, with growth exceeding 100 billion RMB for three consecutive years.
As one of the five key biopharmaceutical industry hubs in Shanghai's "1+5+X" industrial layout, Minhang District has fully utilized its advantages in transportation, industrial foundation, technological resources, and talent concentration. The district has increased policy support, improved industrial resource allocation, and vigorously promoted the agglomeration development of key industries like biopharmaceuticals, initially forming three major biopharmaceutical industry zones.
According to the Municipal Commission of Economy and Informatization, the completion of Moderna's China R&D and production headquarters project will bring more advanced technologies and innovative products to Shanghai. It will also become another important component of China's collaborative R&D environment, further boosting the development of the biopharmaceutical industry and benefiting patients.
For years, the development of the biopharmaceutical industry has been encouraged and supported by national policies. For venture capital institutions, the biopharmaceutical sector remains a key focus area.
2. AI+Drug Development Emerges as a Hot Investment Sector in Healthcare
The latest 'China Biopharmaceutical Investment and Financing Blue Book (H1 2023)' shows that in the first half of 2023, 196 biopharmaceutical companies in China obtained financing in the primary market, with a total funding amount of RMB 31 billion. Compared to the same period last year, the number of funded companies decreased by 21.6%, and the total financing volume declined by 28.6%.
It is worth noting that although the industry is in a fluctuating cycle, the Greater Bay Area is becoming a popular investment region. Additionally, leveraging AI technology to reduce costs and enhance efficiency in drug development is emerging as one of the hot investment sectors in the healthcare field.
Despite the cyclical fluctuations and cooling investment in the biopharmaceutical industry, as one of the focal areas of technological revolution and competition, cities within the Greater Bay Area are actively positioning themselves in the biopharmaceutical sector, which is increasingly becoming a preferred region for corporate investments in this industry.
Specifically, to support biopharmaceutical development, Guangdong has intensively released numerous policies. In 2022 alone, various levels of government in Guangdong issued nearly 500 biopharmaceutical-related policies. By October 2023, the number of enterprises in Guangdong's biopharmaceutical industry chain exceeded 120,000.
Additionally, in terms of investment scale, CVSource data shows that Guangdong projects received ¥12.564 billion in funding in 2023, ranking first nationally.
AI-powered drug development refers to using artificial intelligence technologies like big data and cloud computing to assist various stages of drug research including discovery and management.
With the explosive growth of AI, the "Three Tens Rule" of drug development may be broken. According to NVIDIA's public data, AI can reduce early-stage drug discovery time to one-third and cut costs to 1/200th of traditional methods. Pharmaceutical companies are racing to adopt AI solutions, with global leaders like AstraZeneca and Johnson & Johnson forming strategic partnerships with AI drug discovery firms such as BenevolentAI.