China’s contract research firms rebound after coronavirus


China’s nationwide lockdown in February and early March to curb the spread of COVID-19 caused clients of Chinese pharmaceutical contract research organizations (CROs) to fear for the continuity of projects they had outsourced. Now, as the coronavirus spreads everywhere else on the globe, China’s seemingly successful measures to contain it may help those same CROs secure steady growth.To get more news about china industry research centers, you can visit acem.sjtu.edu.cn official website.

Thanks to China’s deep chemistry resources, the country’s CROs have seen robust growth in recent years. Shortly before the COVID-19 outbreak in late January, Chinese media widely cited an estimate by the consulting firm Frost & Sullivan that CRO sales in China had increased from $2.1 billion in 2014 to $5.9 billion in 2018 and may grow to $21.4 billion by 2023.

On March 23, China’s largest CRO, WuXi AppTec, announced that its 2019 revenues grew by more than a third to $1.8 billion and that it signed up 1,200 new customers last year. Another leading player, ChemPartner, just opened a 24,000 m2 laboratory in Shanghai’s Zhangjiang Hi-Tech Park that houses approximately 700 employees.

Continued growth seemed threatened last month when China’s national lockdown dramatically cut work by local CROs, causing Western clients to reconsider their heavy reliance on them. Yet most CROs are already back up to full speed.

WuXi reports that, by March 24, 96% of its employees had returned to work at its various sites, including an R&D center in Wuhan, where the pandemic began. CEO Ge Li said in a news release that he expects COVID-19 to delay projects at the company by only 2 to 3 weeks. Meanwhile, lockdowns are spreading across Europe and North America.

Now, relying on [Chinese] CROs has shown its advantages,” says Jack Lu, president of the Shanghai–based CRO and drug intermediate supplier AQ Biopharma. “The normal operation of Chinese CROs can help many US projects impacted by the epidemic continue.”

The earlier stumble by Chinese CROs may lead some foreign clients to consider geographically diversifying their outsourcing deals, Lu acknowledges, but growing demand from Chinese biotech and drug companies should offset any losses. He says the domestic share of his company’s business has shifted from 20% several years ago to 80% today.

The COVID-19 pandemic may add to this trend. Since the outbreak, China’s Ministry of Science and Technology and its National Health Commission have issued dozens of grants to support coronavirus treatment and vaccine projects, mostly done by academic researchers or small innovative drug developers. “Without sufficient research facilities, they can only rely on CROs to fulfill their projects,” Lu says.