AstraZeneca spending hundreds of millions in China, blueprints new R&D hub

WuXi CEO Ge Li

AstraZeneca ($AZN) is building a new global R&D hub in Shanghai while lining up a closer manufacturing relationship with the fast-growing WuXi AppTec and hiring dozens of scientists to accelerate development of new drugs for China.

AstraZeneca is following up on an earlier deal with WuXi AppTec, an international CRO and manufacturing powerhouse led by Ge Li, to develop MEDI5117. Eyeing a shorter route to China's big pharma market, AstraZeneca is looking to cut years out of the approval process as it maps a global strategy for its new drug launches. And it's budgeting hundreds of millions of dollars to make its move in China.

A number of pharma giants have jumped into the Chinese market in the last 5 years, building local operations to help position their products with China's regulatory groups. Investing in China is considered a key step toward gaining access to the big pharma market. One of those pioneers, GlaxoSmithKline ($GSK), has been struggling to overcome a bribery scandal that recently engulfed its local sales force.

Working with a Chinese partner like WuXi may help avoid similar setbacks for AstraZeneca as it develops drugs specifically for the Chinese.

To accomplish that, AstraZeneca is hiring up to 50 scientists for facilities in Shanghai and Wuxi City, following a plan to create a single unit to work on both small molecules and biologics. AstraZeneca also struck an option deal to buy out WuXi AppTec's manufacturing operations in Wuxi City for $100 million.

AstraZeneca CEO Pascal Soriot

Under CEO Pascal Soriot, AstraZeneca has been building a $500 million headquarters and research center in Cambridge, U.K., while reorganizing the company's development infrastructure by refocusing and downsizing in the U.K. and Sweden, its other big R&D hub. The company was recently awarded an accelerated approval for the cancer drug AZD9291.

Mark Mallon, EVP for international at AstraZeneca, says the plan will make the pharma giant "the first multinational biopharmaceutical company to create a dedicated R&D platform and manufacturing capabilities in China for local development from research through to commercialization."

- here's the release

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