Pfizer Inc. (NYSE: PFE) is currently planning to establish a biotech facility valued at approximately $350 million in China. This move can be considered as a continuation of the pharmaceutical giant’s expansion plans in the future. Pfizer is planning to grow its drug portfolio geographically and obtain more approvals for investigational molecules. This step is necessary in order to make the company’s drug pipeline more competitive.
The main objective of building the high tech facility is to create a biosimilar version of bestseller drugs for the Asian country as well as other parts of the world. The biotech center is anticipated to begin operating by the year 2018. China is considered as an ideal country for different companies in the pharmaceutical industry, because of the nation’s aging population.
Biosimilar versions are basically copycat forms of drugs created through a complex method. The Pfizer-aided facility will focus primarily on oncology and other related segments.
The drug maker is already on the verge of developing biosimilars, since the pharmaceutical giant already purchased Hospira last year. Early this year, the company’s biosimilar version of Remicade obtained approval from the FDA. Hospira is planning to work on the biosimilar versions of Rituxan, Herceptin, Humira, and Avastin.
The biosimilar versions have great potential, and drug patents amounting to almost $100 billion are anticipated to lose patent protection between 2016 to 2020. Moreover, the biosimilar market also has a significant commercial potential. During the first quarter earnings report, Pfizer stated that about $100 billion worth of presently patented branded biological drugs are anticipated to lose their patent protection within approximately a decade. Based on the pharmaceutical giant’s statistics, biosimilar versions are estimated to expand to around $20 billion by the year 2020.
According to Pfizer in an email, “China is one of the fastest growing pharmaceutical markets in the world and the ongoing China health-care reform will continue to drive the expansion of China’s pharmaceutical industry, including research and development.”
The approval process of a drug in the Asian country is complex. A number of executives in the pharmaceutical sector have been complaining regarding the sluggish process of approval, as well as regulatory headwinds. During the previous year, the pharmaceutical giant closed its vaccine business because of the expiration of Prevenar, which is Pfizer’s leading vaccine.
Aside from the company’s state-of-the art facility, Novartis revealed its campus amounting to $1 billion in Shanghai. In addition, during the month of April, Merck also inaugurated a research and development facility outside Beijing.
IMS Health stated that the healthcare portfolio of China will hit about $185 billion by the year 2018. Reuters also said that the merger and acquisition activities in the Asian country are extremely high, with the figure having soared from $18.8 billion in the year 2014, to $54 billion last year. Merger and acquisition agreements had rallied to $9 billion by the middle of the current year. The healthcare spending of China is constantly edging up, and the healthcare industry is anticipated to reach about $1.3 trillion by the year 2020. The PFE stock was given a Strong Buy rating by Zacks.