Innovent Biologics' Dr. Zhou Kaisong: Commercial Competition in Pharma Is a Battle of Supply Chains

In 1986, the FDA approved the first monoclonal antibody, ushering in the era of industrialized antibody therapeutics. In 2021, GSK’s PD-1 inhibitor dostarlimab was approved, marking the 100th approved antibody drug and thus initiating the “Century of Antibodies” era.

For all pharmaceuticals, including antibodies, industry players often spare no expense in R&D and production during the nascent stage. However, as the industrial landscape of pharmaceuticals expands and market accessibility becomes a key consideration, manufacturing processes emerge as a critical factor. Breakthroughs in process technology can effectively enhance product quality, reduce costs, and increase production volume.

For decades, breakthroughs and iterations in the manufacturing processes of monoclonal antibody drugs have ushered in a golden age of antibody commercialization. In 2021, the global antibody drug market surpassed $200 billion, representing a 16.5% increase from 2020.

Dr. Zhou Kaisong has decades of experience in process development, industrialization, and regulatory submissions within the biopharmaceutical sector. After returning to China in 2009, Dr. Zhou served at Qilu Pharmaceutical, where he was responsible for the process development and industrialization of biological drugs. Since 2016, Dr. Zhou has been with Innovent Bio, primarily overseeing CMC-related functions, including process development, product development, CMC manufacturing operations, and procurement and supply chain management.

At Innovent Bio alone, he spearheaded the successful launch of more than seven products in domestic and international markets, and led the process development and regulatory submissions for over 40 antibody, small-molecule, and ADC projects across China, the United States, Europe, and Australia.

Amid the booming antibody market and intense competition, what new developments are underway at Innovent Bio, a leading domestic innovator in antibody therapeutics? Having built its foundation on antibody drugs, why has Innovent Bio made a strong entry into the CDMO sector? While leveraging its inherent strengths in the antibody field, how is Innovent Bio empowering emerging tracks such as CDMO and CGT? At this juncture, how does the company view the security and stability of its supply chain?

Recently, VBInsight, in collaboration with Thermo Fisher Scientific, conducted an exclusive interview with Dr. Zhou Kaisong, Senior Vice President of Innovent Bio.

Innovent Bio was the first pharmaceutical company in China to develop a PD-1 antibody. Since its establishment, Innovent Bio has accompanied and witnessed the rise and rapid development of China’s biopharmaceutical industry. As is well known, ten years ago, the development level of China’s antibody industry was relatively backward. After years of development, the antibody yield of Chinese pharmaceutical companies has increased from the initial 1–2 g/L to the current widespread level of 7–8 g/L.

As the antibody industry continues to mature, emerging sectors are rapidly sprouting.In recent years, the cell and gene therapy (CGT) industry has garnered significant attention. According to Dr. Zhou Kaisong, the current state of the CGT sector resembles that of the antibody industry a decade ago: while numerous players are active in the field, the industrialization of related products remains in its infancy.

How to Accelerate the Growth of These Emerging Sectors and Rapidly Bring Products to the Industrial Sector? This Requires Development and Breakthroughs from Suppliers. Supplier breakthroughs can deliver superior cell lines, stable culture media, and high-capacity resins, thereby promoting increased product yield and quality while reducing costs.

VBInsight: Suppliers can provide high-quality culture media, resins, and other products, helping to reduce costs and improve efficiency during industrialization. What role do you think culture media plays in the upstream process of biopharmaceutical manufacturing?

Dr. Zhou Kaisong:Culture media are critical to the entire biopharmaceutical manufacturing process, accounting for approximately 30% of raw material costs. Therefore, it is no exaggeration to describe culture media as the lifeblood of this industry.

Innovent Bio has been committed to developing high-quality biologics that are affordable for the general public. In the biopharmaceutical industry, a product is considered successful only if it achieves market accessibility. Cost reduction can primarily be achieved through three approaches: first, identifying high-expression cell lines and optimizing culture methods through advanced process technologies to enhance product yield; second, leveraging procurement capabilities; and third, improving operational efficiency. When converted proportionally,Process costs account for more than half of the total cost. It is evident that the majority of cost reductions are actually attributable to suppliers.

VBInsight: When did Innovent Bio begin its collaboration with Thermo Fisher Scientific's Gibco brand?

Dr. Zhou Kaisong:We have partnered with Thermo Fisher Scientific from the very beginning. When I returned to China in 2009 and was responsible for process development at Qilu Pharmaceutical, we started using Thermo Fisher’s cell culture media products. Although other companies have subsequently launched their own product lines, over the past decade or more, we have found that Thermo Fisher’s media consistently deliver high expression levels while maintaining stable product quality.

For companies like Innovent Bio that are in the stage of large-scale commercialization,Our goal is not merely to achieve high expression levels and superior quality in a single production batch, but to ensure consistent inter-batch consistency of the product while maintaining both yield and quality.This is not apparent during the initial use of culture media products; the safety and batch-to-batch consistency of a supplier’s raw materials can only be confirmed through long-term collaboration and production.

Meanwhile, Thermo Fisher’s supply chain is highly stable.Under the dual impact of international relations and the pandemic, a major issue we have encountered in recent years is the security and stability of supply chains.Supply chain issues can even determine a company's survival."We have never encountered such concerns in our collaboration with Thermo Fisher Scientific; companies do not need to worry about supply disruptions and thus are not required to secure additional space for large-scale raw material stockpiling."

VBInsight: Why Is Thermo Fisher Scientific Able to Ensure Stable Supply?

Dr. Zhou Kaisong:“I’ve spoken with them, as they established relevant strategic layouts early on. Thermo Fisher has set up numerous warehouses in China, serving as a buffer to ensure uninterrupted supply for customers. This approach is highly favored by enterprises: suppliers maintain inventory while customers do not. They provide products whenever we need them.”

For enterprises, future commercial competition is essentially competition among supply chains. Even if a company itself responds quickly, if the upstream and downstream segments of its supply chain are slow to react, the ultimate outcome will still be sluggish. This is because the overall response speed is determined by the slowest link.

In addition to their strategic positioning in emerging fields such as CGT, leading Chinese biopharmaceutical companies—including Innovent Bio, Junshi Biosciences, Henlius, and Transcenta Holding—have also entered the CDMO sector in recent years.

On May 24 this year, Innovent Bio established Sherpa Biotechnology (Hangzhou) Co., Ltd. (hereinafter referred to as “Sherpa Bio”), announcing its entry into the CDMO sector. Currently, Sherpa Bio’s production capacity in Suzhou has reached 60,000 liters, and the total capacity of its commercial manufacturing base is expected to reach 230,000 liters in the near future.

As biotech companies such as Innovent Bio make a strong entry into the CDMO sector, skepticism has inevitably arisen from various stakeholders. Dr. Zhou Kaisong addressed these concerns in his interview.

VBInsight: Why Is Innovent Bio Making a Strong Entry into the CDMO Sector?

Dr. Zhou Kaisong:New drug development is fraught with peril, and even successful market launch faces fierce competition under medical insurance policies. After several rounds of national medical insurance negotiations, the price of domestic PD-1 inhibitors has dropped to less than one-tenth that of their US counterparts. Under such pricing pressure, production capacity and cost advantages have become critical factors determining whether biopharmaceutical companies can withstand competition and achieve profitability.

As a pioneer among domestic biopharmaceutical companies, Innovent Bio has proactively established ample CMC manufacturing capacity and accumulated industry-leading process technologies and expertise through its PD-1 inhibitor and several other marketed antibody drugs. Against this backdrop, we have observed a growing number of biotech startups in the industry, leading to a surge in demand for CDMO outsourcing services, whileInnovent Bio can leverage its excess capacity, combined with our technological and know-how advantages, to provide services to these biotech startups, while also helping Innovent improve asset utilization efficiency.

VBInsight: Compared with other companies that specialize in the CDMO sector, what are the advantages of establishing Chembio based on Innovent Bio?

Dr. Zhou Kaisong:As a startup CDMO, we do not feel anxious in this highly competitive sector. Based onInnovent Bio’s extensive experience and resources in the biopharmaceutical sector can provide Sherpa Biologics with the essential conditions for survival. However, to prevail in this highly competitive landscape, Sherpa Biologics must cultivate differentiated advantages.

This raises two questions: What can we do for our clients? Which clients will partner with us? Regarding the first question, compared with other CDMO companies, and drawing on several years of pharmaceutical experience, we have completed more than 400 batches of commercial manufacturing, achieving a 100% production success rate. We have a deeper understanding of how to develop and manufacture drugs, rather than simply providing batch-production services.Sherpa Bio’s core strength lies in its expertise in drug development and its comprehensive understanding of all processes and details involved in pharmaceutical regulatory submissions, including IND (Investigational New Drug) applications, NDA (New Drug Application) filings, and post-approval changes. Many of the changes implemented by Innovent Bio were first-of-their-kind in China at the time. Such experience is invaluable for pharmaceutical companies that have not yet achieved industrialization or for biotech firms that have not yet reached this stage.

VCBeat New Medicine: As a sector requiring heavy asset investment, do you plan to continue expanding your business footprint in the future?

Dr. Zhou Kaisong:In addition to providing services in the field of monoclonal antibodies, Sherpa Biologics will further expand its layout in CGT.We were also surprised to find that after we announced our entry into the CDMO sector, many of the clients reaching out to us were not antibody-focused pharmaceutical companies, but rather enterprises in the CGT field."I believe this is because clients recognize our CGT GMP facility, as well as the quality system and production capabilities of our entire biopharmaceutical operation, which is why they have approached us."

Many people are aware that Innovent Bio has maintained a partnership with Eli Lilly since 2015, with Eli Lilly providing support across various areas, including our CMC team, as well as the design, construction, and operation of our manufacturing facilities. It is also widely known that Eli Lilly imposes stringent controls on production processes and product quality. Throughout our collaboration, they have exercised rigorous oversight over every step of our operations, down to the level of standard operating procedures (SOPs) and quality release approvals.This process was painful for Innovent Bio, but after enduring it, the company has emerged as an innovative pharmaceutical enterprise with a quality system on par with those of major international pharmaceutical companies.

VBInsight: Innovent Bio has already achieved significant success; why is it still pursuing numerous emerging, high-risk, and cross-industry strategic initiatives?

Dr. Zhou Kaisong:This begins with the current classification of pharmaceutical companies in China. At present, Chinese pharma companies can be broadly categorized into three groups. The first group comprises traditional pharmaceutical enterprises such as Qilu Pharmaceutical, Hengrui Medicine, and CSPC Pharmaceutical. The second group includes multinational pharmaceutical companies like AstraZeneca, Roche, and Pfizer. The third group consists of emerging innovative biopharmaceutical companies such as Innovent Bio, BeiGene, Junshi Biosciences, and Henlius Biotech. Emerging biotech firms still have room to grow in terms of financial support and product portfolio diversity. In an era of intense market consolidation, standing still is equivalent to falling behind. Therefore, the antibody field does not represent the industry ceiling for Innovent Bio. We will continue to explore new horizons by leveraging our continuously optimized drug development philosophy and technology platforms.

With the rapid development of emerging industries such as cell and gene therapy (CGT), upstream supply sectors, including culture media, are ushering in significant new opportunities. Dr. Zhou Kaisong believes that although the upstream supply chain has not yet reached its tipping point, substantial demand is already evident, making a surge inevitable—it is only a matter of time.

The fervor in the CGT industry mirrors the American Gold Rush of yesteryear: while most gold diggers have yet to strike it rich, those selling shovels have already amassed fortunes. Whether CGT companies can achieve scalable growth hinges on suppliers’ ability to develop breakthrough technologies that reduce costs and enhance efficiency for CGT products.

VBInsight: While leveraging its inherent strengths in the antibody field, how has Innovent Bio managed to forge new paths in CDMO and CGT, and empower these sectors?

Dr. Zhou Kaisong:This story begins with how the antibody industry achieved a major breakthrough.In my view, the significant breakthroughs achieved in antibody development to date would not have been possible without the indispensable contributions of suppliers.Advancements and breakthroughs among suppliers have yielded superior cell lines, stable culture media, and high-capacity resins, all of which have contributed to increased antibody yield and quality, as well as reduced costs.

Similarly, I believe that a significant portion of the rapid development in CGT hinges on whether suppliers can achieve breakthroughs.For example, can suppliers identify a culture medium and cultivation method that enhance cell yield and quality while reducing costs? We all look forward to life science tool providers, including Thermo Fisher Scientific, launching superior, “industry-dominating” technologies.

Of course, we hope to proactively position ourselves in this sector before any major breakthroughs emerge.

VBInsight: Compared with the antibody industry a decade ago, do you think the cost reduction in the CGT sector will be faster?

Dr. Zhou Kaisong:In the early stages of an industry’s development, companies invariably spare no expense in research and development. However, as the industry transitions into the commercialization phase, it becomes essential to consider gross margins from all angles. With the ongoing commercialization of cell and gene therapy (CGT) products, CGT pharmaceutical companies will collaborate with suppliers to reduce product costs, thereby securing a sustainable future for both their products and the industry as a whole.

I have always believed that,In the biopharmaceutical industry, the most significant breakthroughs in commercialization—whether from operational, supply chain, or CMC perspectives—are driven by suppliers. During a product’s journey to commercialization, suppliers play a primary role in advancing it from zero to 80 out of 100, while the team’s continuous refinement elevates the product from 80 to 100.

VBInsight: You have many years of experience in CMC process development, and you have also discussed the growth of the antibody and CGT industries. In your view, has China’s biopharmaceutical manufacturing reached a turning point for transformation?

Dr. Zhou Kaisong:Yes, we are currently undergoing a transformation. In fact, conducting CMC (Chemistry, Manufacturing, and Controls) activities in China is significantly more challenging than abroad. Due to the high CMC costs overseas, which lead to higher product pricing, foreign companies do not need to prioritize clinical accessibility to the same extent. However, in China, while improving manufacturing processes, we must also reduce costs by aligning with regulatory policies and the clinical realities of patients. This requires coordinated efforts between upstream suppliers and pharmaceutical companies to drive industry development, such as through the localization of multinational corporations and the rapid rise of domestic enterprises.

Certainly, the level of craftsmanship also affects supply, thereby influencing costs. A product must first ensure its quality before further pursuing cost reduction. Through process innovation, accelerating R&D speed and increasing product expression levels are also effective ways to improve product quality and reduce costs.

VBInsight: What issues do you think the biopharmaceutical industry will focus on in the coming years?

Dr. Zhou Kaisong:From the perspective of Innovent Bio itself, we will pursue a “two-pronged strategy” in the future, simultaneously focusing on market development both domestically and internationally. First and foremost, we will firmly establish our presence in China to meet the medication needs of the Chinese population. Meanwhile, we will continue to expand overseas, advancing toward our goal of “in China for global.”

Healthcare is an enduring and essential human need. Therefore, whether in CDMO, CGT, or other emerging future fields, we are committed to proactively strategically positioning ourselves to address the urgent needs of patients. While making proactive and forward-looking strategic investments, companies should also focus on building robust platforms and developing high-quality products, learning to “befriend time” in this era of rapid biopharmaceutical advancement:

Over the past decade, suppliers such as Thermo Fisher Scientific have facilitated the rapid growth of biopharmaceutical companies like ours. In the coming decade, we aim to grow in partnership with our suppliers, not only in the field of antibody therapeutics but also in areas such as cell and gene therapy (CGT), to achieve more transformative outcomes and develop more high-quality biologics that are affordable for the general public.