The reform of capital market, the improvement of drug approval policy, the expiration of international blockbuster biological drug patents, and the return of a large number of overseas talents have promoted the unprecedented development of China's biopharmaceutical industry. In particular, the Hong Kong Stock Exchange and the Science and Technology Innovation Board introduced new regulations, allowing unprofitable bio-pharmaceutical companies to go public, providing a quick exit channel for the capital invested in bio-pharmaceutical, thus attracting a large number of social capital into the bio-pharmaceutical industry, which not only promoted the rapid development of China's biopharmaceutical, but also gave birth to the industry bubble.

A few years ago or the scenery of the boundless domestic biomedicine industry, these two years have met the capital winter. Biomedicine capital market bubble burst, stock prices fell sharply, many pharmaceutical companies share prices halved. The development of biomedicine is highly dependent on capital. The downturn of the capital market leads to the financing difficulties of the biomedicine industry. Pharmaceutical companies are short of funds and have to shrink pipelines, sell factories and transfer projects, resulting in a downturn in the industrial development.

So where is the path for biopharmaceuticals, and when will spring come?

Generally speaking, the competitive advantage of the biomedicine industry often depends on two aspects. One is innovation, through which innovative drugs are developed to meet future needs; The second is cost, by reducing the cost of pharmaceutical production to meet the needs of a larger population.

In recent years, although China has made a lot of progress in innovative drugs and its R&D investment has increased significantly, there is still a big gap compared with developed countries in Europe and the United States in terms of investment in innovative drugs, basic research, innovative talents, innovative soft environment and culture. China's biopharmaceutical started relatively late, the accumulation of process technology is not enough, and more importantly, the key consumables and equipment occupying the main cost of biopharmaceutical depend on imports for a long time. For example, the upstream medium, disposable bags, and the downstream separation and purification medium and filtration membrane are basically monopolized by very few companies in developed countries. The price of their sales in China is often higher than that in the international market, and the delivery cycle is long, which greatly increases the production cost of Chinese biopharmaceuticals.

In addition, Chinese pharmaceutical companies are faced with three major challenges: product, clinical trial and commercialization, and it is difficult for them to rush abroad. With the influx of a large amount of capital into the biomedicine industry, while promoting the rapid development of the industry, it also leads to product homogenization and serious internal volume.

How does biomedicine industry break the game? In the long run, it must rely on innovation to continuously make new drugs to meet the needs of the future market; In the short and medium term, it is necessary to improve the industrial chain and realize the localization of key consumables and equipment for biopharmaceuticals, so as to greatly reduce pharmaceutical costs, gain international competitive advantages, and seize a broader and more profitable international market. At the same time, the substantial reduction of pharmaceutical costs will enable more ordinary people in developing countries and even the world to afford good drugs, fundamentally expanding the scale of the entire biomedical market and laying the foundation for consumption.

Focusing on the improvement of China's biopharmaceutical industry chain and reducing the cost of biopharmaceutical is a development path that can give Chinese biopharmaceutical enterprises the opportunity to rush to the international market and occupy a larger market share. At the same time, the reduction of production costs, coupled with seizing the international market with higher profits, can enable pharmaceutical companies to achieve more profits, increase research and development investment, make more innovative drugs, and form a virtuous cycle.

The progress of the upstream industry of domestic biomedicine can be seen from the changes of the bio-industry Trade exhibition held in Suzhou this year. Before the listing of Suzhou Nano Technology Co., LTD., the manufacturers participating in the trade fair were mainly multinational companies and occupied the central position, while the domestic manufacturers were few and their stands were small, so they were in the marginal position. This year, the situation is completely reversed: the largest and most central exhibition booths are occupied by Chinese companies, but the presence of multinational companies is not easy to see.

Despite the good development situation, we must keep in mind that the upstream technologies and products of China's biopharmaceuticals are still very different from those of foreign countries. First of all, 80% of the market is still occupied by foreign manufacturers. Secondly, domestic companies have a considerable gap with foreign companies in terms of enterprise scale, financial strength, technological advancement, brand and market share. Despite the appearance of a bustling exhibition, most companies lack core technologies and innovation capabilities, and are more likely to cluster, copy and follow suit.

The analysis of the development process of China's photovoltaic industry is helpful for us to understand the development law of biomedicine industry more clearly.

For the first time, the rise of China's photovoltaic industry was driven by policy support, rather than the strong competitiveness of the photovoltaic industry itself. Therefore, when the national policy subsidy was removed, the photovoltaic industry soon fell into a predicament. This is similar to the emergence of the first wave of China's biomedicine industry driven by the capital market. Fortunately, after the photovoltaic industry fell to the bottom of the trough, Chinese entrepreneurs did not give up, but prepared for battle. After more than ten years of improvement of the industrial chain, technological innovation, localization of key equipment and consumables, and technological iteration, the efficiency of light conversion was continuously improved, thus greatly reducing the cost of photovoltaic products. This makes the industry truly have the innovation advantage and cost advantage to compete with the traditional energy industry, and finally get out of the dilemma and usher in the spring.

Long cycle, prosperous demand and wide market are the underlying logic of the development of biomedical industry. With the accumulation of time, technological innovation and iteration, upstream and downstream cooperation and integration, I believe that the biological pharmaceutical industry is like the photovoltaic industry, its industrial chain is perfect, is the spring breeze and warm day. We need to do, is down to earth, practice good internal skills, wait for flowers.

(The author is the Chairman of Suzhou Nano Technology Co., LTD.)

Source: Suzhou Daily Responsible Editor: Shen Yuming