AstraZeneca’s $15 billion pledge to its China operations highlights the country’s advantages. But other regions are also hoping to host more clinical studies.
More and more multinational companies are setting up R&D shops in China. AstraZeneca’s pledge last week to spend $15 billion in boosting R&D operations in the country exemplifies this trend. But other regions are also vying to host more clinical trials.
China has managed to speed the timeline from early discovery to investigational new drug application by 50 to 70%, according to a recent McKinsey report. The region has done this through parallelized workflows, dense contract research organization ecosystems and “a culture of executional intensity,” the firm said. China grew its share of clinical research to 39% in 2023, beating the U.S. and European Union in terms of patient recruitment and development timelines, McKinsey noted.
The FDA has strict rules that at least 20% of testing must be done in the U.S. for a drug to be approved. A few companies have learned this lesson the hard way in recent years—the rejection of Eli Lilly and Innovent’s PD-1 checkpoint inhibitor sintilimab being the most prominent example. Roche also lost out on an approval for Columvi in diffuse large B cell lymphoma last year due to lackluster American data.
But the other 80% of research can be conducted outside the U.S., providing a major opportunity for other regions. China is increasingly happy to fill the gap—but it’s not the only region vying for a piece of the pie.
China: Not Just a Drugmaker
Biopharmas linking up with Chinese biotechs via licensing deals have seen firsthand the efficiencies driving the region’s popularity. While many multinational companies are eager to find new assets, they’re also keen to learn ways to improve operations.
“A really interesting aspect of China is we’ll be able to test more programs in early development, so get that clinical proof of concept more efficiently to see what’s working and what’s not,” Robert Plenge, chief research officer at Bristol Myers Squibb, told BioSpace in an interview on the sidelines of the J.P. Morgan Healthcare Conference last month.
China’s scientific prowess did not happen overnight. The region began getting into the game by providing services to the pharma industry, including contract research, clinical trials and other research services, according to Novartis’ Ronny Gal, chief strategy and growth officer, who also spoke to BioSpace at JPM. Companies then began to develop “me-too” drugs, or agents similar to those already available or in development but that offer slight improvements. Now, Chinese biotechs are churning out novel compounds that have become the subject of massive deals.
That means a lot of clinical trial activity—particularly Phase I—is happening in China. And according to McKinsey, that research is getting more and more innovative than ever. The firm pointed to Akeso’s PD-1/VEGF bispecific antibody ivonescimab, which was first tested in China before being partnered with Summit Therapeutics for U.S. trials.
As more licensing deals are signed, biopharmas are adding R&D staff in China, said John Wu, managing director and partner in the health care group at consulting firm BCG. They are doing so as collaborations with companies like Wuxi Biologics become increasingly risky in the face of efforts from Congress to cut down on the use of Chinese contractors, such as with the BIOSECURE Act. While the legislation that ultimately passed was not as strict as initially proposed, companies are looking to avoid any potential geopolitical disruption.
AstraZeneca has been one of the largest spenders in China, with last week’s announcement only the latest in a series of committments in the region. The new investment, particularly aimed at AstraZeneca’s cell therapy and radioligand work, will apply to every step in the development process, from drug design and clinical development all the way through manufacturing.
Major biopharma contract research organization Charles River Labs noted the pressure to rethink investment in China during a presentation at JPM. China-based companies continue to offer low-cost options for companies that need to run clinical trials—which can be tempting.
“If you’re starved for cash and you’re in a rush to get to market and you think that the Chinese CROs can do the work okay, enough to get into the marketplace, I think you’ll do that,” CEO James Foster said. “I think most clients would prefer that the science is spectacular.”
Nevertheless, Charles River is thinking of ways to offer clients opportunities in China for those that want to conduct research there. Drugs that are approved in China—a major, growing market opportunity—must have trials done there, Foster noted.
“If we’re not there, we can’t perform that work,” the CEO said. “So we directionally would like to be there.”
Going Global
Regulatory advantages can be a major driver for biopharmas looking outside the U.S. China, for example, is wide open for investigator-initiated trials (IIT), which are tests run by independent researchers instead of pharma companies, according to Wu. Particularly for modalities like cell and gene therapy, radioligand and stem cell therapy, there’s no investigational new drug (IND) application required for an IIT in China like there is at the FDA. That means that some compounds can be moved quickly into human testing as long as a researcher has an interest and funding.
Similarly, in Australia Phase I research studies do not require an IND in Australia, so research in humans can get going without the lengthy regulatory approval process needed in the U.S. The Australian government has also “motivated” CROs and people willing to volunteer for such research studies, as well as implemented favorable tax credits for research, Wu said.
“I think you get a 43 cents on the dollar tax incentive for every R&D dollar spent there,” Wu estimated.
South Korea is another part of the world stepping up clinical research, according to McKinsey, particularly thanks to the country’s experience with antibody-drug conjugates and cell and gene therapies. The biotech industry there is maturing, as are hospital-linked R&D centers and CROs to support the country’s oncology innovation.
Another region that could someday be the home of biotech innovation is India, which already provides active pharmaceutical ingredients (APIs) to the industry and is a major producer of generics. Multinational companies are already thinking about whether they should set up operations in India around certain trial, regulatory or biostat activities, according to Wu.
“There’s also now thinking of, hey, is India maybe 15–20 years behind China? Should we try to get ahead?” he said.
India is becoming more adept in biosimilars, injectables and ADCs, according to McKinsey. Many Indians are returning home with international experience to launch new companies and the government is actively encouraging clinical research with national policy targeting the pharma and medtech industries.
CRISPR Therapeutics CEO Samarth Kulkarni told the JPM crowd that the gene editing biotech is testing an allogeneic CAR T in India right now, particularly because the region needs more affordable options.
Monica Manotas, CEO of the Tecan Group, a Swiss lab product supplier, noted at JPM that India is an emerging market as the biopharma sector rises there. The company plans to make targeted investments in the region to be ready.
Singapore is another country jockeying to become an R&D and innovation powerhouse, McKinsey said. The country in particular has set itself up to be a launch pad for companies seeking access to the Asian markets, offering efficient clinical trial processes.
Meanwhile, the European Union has launched a campaign to win back clinical research. The region had 22% of the global share of clinical trials in 2013, but that fell to 12% in 2023, according to according to a recent report by the Roundtable on the European Clinical Trial Ecosystem. The European Commission (EC) pointed to issues accessing capital and overly complex regulation as reasons for the decline, with European startups and scientists seeking opportunities elsewhere.
Through The Biotech Act, the EC is seeking to boost access to funding for European startups and simplify and speed regulatory processes to reduce the time to market for biotech products.
Specifically, the act seeks to shorten the authorization timeframe for multinational clinical trials from 75 days to 47 days for applications that do not require additional information. For those that do, the timeline will be reset from 106 days to 76.
Stick to What You Know
There have been concerns about the reproducibility of early-stage data from China, but BMS’ Plenge isn’t concerned—as long as the same rigorous controls are applied to studies no matter where they’re conducted. There are of course differences in standard of care and monitoring across geographies and availability of therapies to use as controls—particularly in oncology.
“If you have a really good data package from any of those geographies, you should be able to use that information to guide clinical design in other geographies,” he said.
Nevertheless, companies cannot escape the FDA requirement of U.S.-based studies for registrational trials. Wu said that the European Medicines Agency is more lenient on where trials are conducted but the U.S. is the biggest market. Therefore, no matter what, companies will have to hit the 20% number with American patients to get their coveted FDA approvals.
“There’s a limit to which you can conduct trials outside of the U.S.,” Wu said. No company wants to be caught flat footed with an FDA application after failing to hit the magic 20% number—like Roche was in 2025. But, there’s only so many patients in the U.S. available for testing—forcing companies to think globally.
“You cannot just satisfy a trial requirement from the U.S., because that would be too expensive, too slow, too competitive,” Wu said.
