Chinese infectious disease venture financing receives a booster from Covid-19
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Chinese infectious disease venture financing receives a booster from Covid-19

By GlobalData Healthcare 25 Nov 2021 (Last Updated November 29th, 2021 17:30)

The impact of the Covid-19 pandemic has raised the importance of funding drug development for the treatment of infectious diseases.

Bio/Pharma companies in China raising capital for innovator drugs for foreign markets saw significant continued growth in investment with a total of over $8.8B in venture financing over the past five years, according to GlobalData’s Pharma Intelligence Center Deals Database. The impact of the Covid-19 pandemic seems to have raised the importance of funding drug development for the treatment of infectious diseases. While there have been recent regulatory reforms in China to increase innovator drug development, the first Chinese-developed oncology innovator drug, Brukinsa (zanubrutinib), received US FDA approval in November 2019. There are great expectations on seeing more approvals for Chinese-originating innovator drugs in western countries such as the US and EU.

Venture financing for Chinese Bio/Pharma for infectious disease innovator drugs saw a 277% increase from 2017 to Oct 2021, from $163–615M, as shown in Figure 1. The majority of this increase has come after the Covid-19 pandemic. Clover Biopharmaceuticals, a Chinese-headquartered biotech, raised $230M in Series C venture financing in February 2021; the majority of its drugs are in early-stage, in discovery or preclinical, development for infectious disease. As in the rest of the world, oncology has consistently remained the top therapy area over the last five years for Chinese Bio/Pharma venture financing for foreign innovator drugs, raising a total of $3.8B compared to only $1.4B for infectious disease, as shown in Figure 1.

Figure 1: Chinese Company Venture Financing Raised for Foreign Market Drugs for Top 5 Therapy Areas (2017–2021).

Note: Includes deal values for all announced Deals from 2017 to October 2021. Deals include Innovator Drugs only for marketed, pre-registration, Phase I, II, III, preclinical, and discovery for all geographies globally except China. A deal can be tagged to more than one therapy based on the therapy areas related to the drugs for that deal. Source: GlobalData, Pharma Intelligence Center, Deals Database (Accessed: 12 October 2021).

The Shanghai Stock Exchange launched a Science and Technology Innovation Board (STAR) in July 2019 as an attempt to rival the US Nasdaq, which involved an IPO regulation shake-up to encourage innovative companies to list before they have a marketed product. The aim was to allow innovative pipeline Chinese biotechs greater access to capital markets. It will be interesting to see if this leads to more innovator drugs developed in China.

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