Crystal Pharmatech: New Quality Productivity Is the Ultimate Dividend
Editor’s Note: This article is sourced from Xinhua Daily’s “New Quality Productive Forces Are the Greatest Dividend,” by reporters He Yu and Zhao Weili. Republished with permission by VCBeat.
This year, “innovative drugs” were included in the Government Work Report for the first time, which explicitly called for actively cultivating new growth engines such as biomanufacturing. This sends a positive signal to the biomedical industry to accelerate the formation of new quality productive forces and achieve high-quality development.
“We must stay focused, push our technology to the limit, and build a robust service system. Services without technological backing hold no appeal,” said Chen Minhua, CEO of CRYSTAL Pharmatech (hereinafter referred to as “CRYSTAL Pharmatech”). As the industry enters a period of adjustment, only by accelerating innovation and fostering new-quality productive forces can companies reap the benefits of market development.
Focusing on Technology: Uncovering a Large Market in a Niche Sector
Drug Polymorphs: A Mode of Ordered Arrangement of Drug Molecules. The manner in which drug molecules are arranged and the formulation adopted determine the efficacy of a drug.
CRYSTAL Pharmatech primarily focuses on the small-molecule innovative drug sector, providing crystal form research and development services to innovator drug companies. Currently, more than half of the company’s revenue comes from the United States, and its market share in China has reached 30%. According to reports, since its establishment in 2010, the company dedicated its first decade exclusively to crystal form research, designing crystal structures for over 2,000 small-molecule innovative drug projects, thereby achieving a leading position globally and ranking first in China in the field of crystal form R&D.
Three years ago, CRYSTAL Pharmatech began expanding into the field of formulation development, providing optimal formulation R&D and manufacturing services for innovative drugs. In Chen Minhua’s view, this was a natural progression. Contract Research Organizations (CROs) and Contract Development and Manufacturing Organizations (CDMOs)—a model of pharmaceutical R&D outsourcing—play a significant role in the biopharmaceutical industry. The global market size for small-molecule drug CDMOs is projected to reach $104.6 billion by 2025.
CRYSTAL Pharmatech has launched the sub-brand “Crystal Sky” for its formulation R&D and manufacturing services. Chen Minhua stated that establishing a brand represents both a commitment and a reminder to continuously pursue technological innovation, strive for excellence in every endeavor, and aim to become the leading player in China. “We leverage optimal crystal structures and the best formulation development and manufacturing solutions to maximize the value of innovative drugs,” said Chen Minhua, adding that the company aims to attract the world’s top innovative pharmaceutical companies and become the world’s premier CRO/CDMO.
Industry Adjustment: From Incremental Innovation to Source Innovation
After nearly a decade of rapid development, the innovative drug industry has entered an adjustment phase, facing multiple challenges including intensified “involution,” squeezed profit margins, a sluggish capital market, and increasingly stringent regulatory oversight.
“The industry’s first golden age has come to an end. Since 2023, it has entered a painful period of transformation, a phase of survival of the fittest, where only enterprises with genuine global innovation capabilities and new-quality productive forces can survive.” Chen Minhua believes that what needs to be done now is to move from “imitative innovation” to source innovation.
For a long time, the trajectory of the innovative drug sector has been characterized by fast-follow strategies. Due to relatively low barriers to innovation, numerous companies have entered the market, intensifying competition. In this context, the industry faces heightened demands and expectations for new quality productive forces, necessitating a shift from fast-follow to first-in-class or best-in-class development.
“When products lack competitiveness, all dividends will disappear,” said Chen Minhua. As the innovative capabilities of China’s novel drugs continue to improve, the professional advantages of large, all-encompassing integrated CRO/CDMOs are becoming increasingly less pronounced. CRYSTAL Pharmatech aims to be a specialized and refined CRO/CDMO—not doing everything, but patiently persisting and rooting deeply in each chosen direction to become No. 1 in its niche sectors.
It is reported that CRYSTAL Pharmatech has invested in nearly ten companies across the upstream and downstream segments of the industry chain through strategic investments. “This has broadened the company’s perspective, scope, and industry reach. The investment returns have been favorable, enabling the company to respond to market risks with greater ease.”
The Barriers Are Not Only Technical, But Also Lie in the Service System
Looking west from the intersection of Jinyan Road and Jiangyun Road in Suzhou Industrial Park, the global headquarters and commercial formulation production base of CRYSTAL Pharmatech come into view, with operations expected to commence this year.
From an initial core R&D team of three at its inception to a company with over 250 employees and three R&D centers in China, the United States, and Canada, CRYSTAL Pharmatech has continued to deepen its expertise in the innovative drug sector and was selected as one of the fourth batch of national-level specialized, refined, distinctive, and innovative “Little Giant” enterprises.
New quality productive forces impose higher demands on the innovation capabilities and internationalization capacities of technology-driven enterprises. “Competing in the global market requires an internationalized system, an internationalized team, an internationalized mindset, and a deeper cultural understanding of customers,” said Chen Minhua. He emphasized that they aim to build a technology-driven service enterprise; without technological advantages, the appeal of their services in the global market would diminish.
China, the United States, and Canada are home to CRYSTAL Pharmatech’s three major R&D centers, which together form a “technical corps” for the company’s international competitiveness. Among them, China serves as the headquarters, catering to the global market, while the other R&D centers focus on their respective local markets. “Each R&D center is capable of operating independently as well as collaborating in joint efforts,” said Chen Minhua. The company has fostered a culture of transparency, emphasizing that greater sharing leads to greater gains, thereby transforming individual capabilities and strengths into organizational capabilities and advantages. This approach strengthens its service system and enhances resilience against market risks.
About CRYSTAL Pharmatech
CRYSTAL Pharmatech is a technology-driven CRO/CDMO specializing in drug polymorph research, formulation development and manufacturing, and clinical supply. Dedicated to providing small-molecule new drug clients with tailored “right-first-time” polymorphs and formulations, we rapidly advance your compounds from lead optimization or preclinical candidate stages to Phase I clinical trials and beyond, enhancing their competitiveness within similar target and disease areas while maximizing their commercial value.
CRYSTAL Pharmatech, established in 2010, operates R&D and manufacturing centers in Suzhou (China), New Jersey (USA), and Toronto (Canada), supported by a professional team of over 250 members. Leveraging innovative technologies and robust scientific capabilities, CRYSTAL Pharmatech has partnered with more than 1,000 pharmaceutical companies worldwide, delivering specialized technical solutions for over 2,000 new drug compounds:
• Among the top 20 innovative pharmaceutical companies in China, 19 have chosen CRYSTAL Pharmatech’s services.
• Eight of the top 10 pharmaceutical companies globally are clients of CRYSTAL Pharmatech.