Leading CXOs Gather at Sequoia Healthcare Summit to Discuss Industry Trends and the Future of Drug R&D

5In the month, the "2023 HongShan Global Healthcare Industry Summit" landed at the Zhangjiang Science Hall in Shanghai. With the theme "Begin with the End in Mind, Aim Far and Act Precisely," the summit covered keynote presentations ranging from cutting-edge scientific breakthroughs in healthcare to practical application scenarios for technological advancements, breaking down unmet needs in the healthcare field layer by layer. It addressed hot topics of mutual interest across academia, industry, and investment circles, fostering effective and in-depth communication.

On the second day of the conference, byMs. Cuiping Gu, Managing Director of HongShanHost"How CXO Institutions Accelerate R&D Further"The roundtable meeting invitedMr. Gu Jingliang, Vice President of JOINN and General Manager of the Clinical Division, Mr. Liu Hansong, General Manager of Novotech China, Dr. Wen Shuhao, Chairman of XtalPi, and Ms. Yang Rui, Co-CEO of ASYMCHEM,AndDr. Zhao Jing, CEO of GemPharmatech。These senior industry figures from well-known pharmaceutical companies analyzed the challenges and opportunities CXO enterprises face in promoting new drug research and development in China.

VCBeat has compiled the discussion content as follows:

How to View CXOIndustryCurrently"Temperature"?

Gu Jingliang:According to data from 2022, China's CRO industry is experiencing healthy growth. Compared with the global CRO market, the current size of the Chinese market still has room for growth. Although our regulatory standards such as GMP and GLP can reach international levels, there is still a long way to go to gain significant influence and a voice on the global stage. However, in recent years, we have proven through concrete actions that our global solutions are practical and full of promise.China's core competitiveness represented by labor costs and resource acquisition capabilities will boost the rapid development of China's CRO industry in the future.

Liu Hansong:CROThe track will not cool down; it's just that the hotspots keep changing.From bioequivalence studies of generic drugs to animal models and regulatory oversight for innovative drugs, Novotech's capabilities and investments in the CRO industry have continued to evolve with changing industry demands. From a CRO perspective, how to quickly adjust internal resources, build capacity to support clients' ever-changing needs, while using forward-thinking strategies to plan future client collaboration approaches, is what CRO companies need to consider and strive for.

Wen Shuhao:From a technical perspective, AI-empowered drug research and development is continuously lowering the barriers and costs of drug innovation, giving rise to more demands for the transformation of innovative achievements and the emergence of new biotechnology companies.From the annual reports of some major European and American pharmaceutical companies, their investment in R&D continues to grow, which also reflects the vigorous upward development trend of the CXO industry.As the ultimate proposition for humanity, life science is an industry that does not experience cyclical changes. Short-term market fluctuations cannot undermine the long-term development opportunities brought about by advancements in technology iteration and the pursuit of health.

Yang Rui:Global R&D expenditure and new drug pipelines are continuously growing. The demand for new Modalities in terms of specialized division of labor and the expertise of CXO companies is also very strong, with higher requirements. From the perspective of penetration rate, it is also steadily increasing. The development patterns of the biopharmaceutical industry and the continuous growth in market demand will drive the enhancement of CXO companies' capabilities, which in turn will fuel the rapid development of the industry—these two aspects are mutually reinforcing.

From the perspective of the competitiveness of the CXO industry, China's CXO has a very strong talent pool as well as technological and cost competitiveness. At present, we have gained international market competitiveness, which has laid the foundation for the development of China's CXO companies, enabling the entire industry to grow and advance rapidly.

China's pharmaceutical industry is experiencing a capital winter, and it is also evident that the capital markets both domestically and internationally are indeed adjusting, causing some level of disruption to this sector. However, from our own perspective, whether looking at it from a Global standpoint, or from the angle of "in China for Global" or "in China for China,"What we can perceive is that after the industry adjustment, there will be a differentiation, but enterprises with real technology or core competitiveness will definitely have stronger momentum for development.

Zhao Jing:"The over-concentration of drug pipeline targets" is a question the entire industry needs to reflect on calmly.To carry out drug research and development based on clinical needs, as well as technology and platforms, is an effective way for enterprises to build differentiated core competitiveness.Even within the same target and the same industry, we actually see that many companies have their own innovation points. Overall, it is true that China has encountered a "cooling" situation, butAdjustments within the industry are also underway.，This year has already shown a gradual warming up, and a healthy upward trend is taking place.

Can the CXO Industry "Thrive"?

Yang Rui:From the business development logic of this industry,Shallow CDMO or CXO refers to the project delivery capability.However, as molecules become increasingly complex, business divisions more specialized, and demands more diversified, for CXO companies,It is not just a simple project delivery, but a comprehensive and valuable addition.This still comes from our business competitiveness, technical accumulation, and the overall level of the team.

Speaking of "involution",I think at least in the CDMO field, it's impossible to compete intensely.. I think the deepest core competence of a CDMO or CXO company lies in whether it can provide added value, truly help customers solve project delivery issues, technical challenges, or overcome difficulties, rather than simply relying on low prices to secure business.I would like to see more core competition in technical challenges, delivery standards, and added value under the guidance of the craftsman spirit.

Gu Jingliang:In China's CRO industry, the market share of leading CROs has not reached an overwhelmingly dominant level, leaving ample market space for innovative companies, with significant room for growth.Moreover, this capital-intensive field has stringent qualification requirements, with high barriers in terms of talent, capital, equipment, regulations, and network construction, making it difficult to easily "become competitive overnight." Healthy competition is certainly a good thing, as it can drive industry leaders to enhance their internal motivation in innovation, improvement, and business operations.

Liu Hansong:Going global means facing a completely new regulatory environment, complex clinical systems, and unfamiliar work teams. Based on Novotech's years of experience,How to help biotechnology companies develop satisfactory, reliable, and risk-reducing global clinical trial protocols is the key focus of CRO enterprises.CXOEnterprises need to improve their comprehensive delivery capabilities in aspects such as program execution, talent deployment, and regulatory communication.Need to keep an eye on new technologies, in order to continuously help biotech companies reduce risks, cut costs, and improve efficiency.

Zhao Jing:How to Successfully Bring Innovative Drug Products "Overseas"? Looking Upstream,Early-stage R&D and target selection are very important.The duration, cost, risks, success or failure of clinical trials, as well as whether they can generate market value, are all closely related to the determination of early targets, which is worth deep consideration by new drug research and development companies.

AIThe Value of Models in New Drug Development Can Be Greater

Wen Shuhao:From a technical perspective, large molecule sequences are similar to large language models and are naturally suitable for AI-generated content algorithms, presenting significant opportunities. However, in building models for molecular discovery, molecular generation, and protein molecule generation in biomedicine, it is necessary to integrate data with knowledge from physics, chemistry, pharmaceuticals, and other specialized fields to achieve better model performance and predictive outcomes.

On the other hand, from the perspective of data analysis, the success of AlphaFold is attributed to the insights gained from its self-constructed data. XtalPi has also developed its own capabilities and technologies for generating proprietary data, enabling AI models to understand and accumulate critical knowledge about the efficacy and safety of drug molecules. At the same time, we have built a scaled fleet of experimental robots to generate standardized experimental data, allowing AI to acquire professional expertise and insights far beyond human experience.

Finally, from the perspective of tool utilization, the efficiency output generated by a Ph.D. using our R&D platform with GPT may equate to the work completed by three to five Ph.D.s using traditional methods, and even higher efficiency gains may be achieved in the future.

From Start to Finish

Outlook and Expectations for the CXO Industry

Zhao Jing:We look forward to everyone paying more attention to biology, focusing on the essential factors that promote human health, and investing more resources into doing difficult yet correct things.

Yang Rui:The development of innovative drugs definitely requires CXO as a partner. As a CXO company, we need to work hard on the fundamentals, refine better technologies, and enhance overall business capabilities so that we can achieve success naturally and consistently under the current favorable momentum.

Wen Shuhao:AI Technology Will Become the Infrastructure of the Future Biomedical Industry: XtalPi Can Help CXO Enterprises Improve Gross Profit Margin and Human Efficiency, Serving as the Digital New Infrastructure for the Biomedical Industry to Support High-Quality Development in Biomedicine and New Materials Fields.

Liu Hansong:As a service industry, CROs need to build their core competitiveness based on the demands of clients and the market. Novotech hopes to leverage new technologies to maintain its flexible, fast, and focused "service DNA" under the premise of global expansion, thereby better serving its clients.

Gu Jingliang:A good ecosystem can promote the positive development of enterprises.JOINNActively integrating tracks to sort out the core value of the CXO industry and create better ecological value.