Regulators take a tough stance against Chinese pharma firms


Lu Xianping, president of Shenzhen -based pharma firm Chipscreen Biosciences, is close to seeing his dream of launching a new drug in China become reality. Chipscreen has a promising diabetes drug in Phase II clinical trials, and, if all goes well, could become the first Chinese pharma firm to synthesise and patent a new chemical drug independently, says Lu. 

But Chipscreen has had to halt the trials temporarily while it seeks funding for a new factory. ’We must exercise caution,’ says Lu. ’We must ensure that everything - from protocols to constructing a GMP factory - is on the right track.’ Lu has learnt to be cautious after negotiating his way through China’s complex drug regulatory system.

Innovation dreams

After a post-doc at the La Jolla Cancer Research Foundation (now called the Burnham Institute for Medical Research) in California, US, Lu became a co-founder of US dermatology firm Galderma, a joint venture between Nestl? and L’Or?al. Until 2000, Lu was the director of research at Galderma R & D in Princeton. At the time, China was in the midst of a biotech gold rush and Lu’s friend Cheng Jing, president of Capitalbio, China’s largest biochip maker, persuaded him to return to China to launch a new firm. 

Lu had long dreamt of developing a new drug in China but was well aware that he would be breaking new ground. Meanwhile, the industry was fighting price wars on generics and small innovation-driven firms were struggling without financial and technical support from bigger pharma firms. 

Rather than jump straight into new drug development, Lu and his partners first developed a chemical genomics system to evaluate potential pharmaceutical compounds. The system models and predicts the interactions between genes and pharmaceutical compounds.

Lu Xianping, president of Chipscreen Biosciences

Lu Xianping, president of Chipscreen Biosciences

© Chipscreen Biosciences

’At first we only wanted to use the system to identify the risks of the compounds that we planned to develop so as to reduce the chance of failure as early as possible,’ Lu told Chemistry World. But the screening system soon became Chipscreen’s making, attracting investors and pulling in revenues to pay for new drug development.

In 2000, the drug screening system helped Lu and his team to secure US$6 million in venture capital - a luxury to most Chinese biotech startups even by today’s standards. Chipscreen now sells the screening service to Chinese and foreign clients. ’Although the revenues are not that big, they provide continuous income,’ says Lu. 

Chipscreen has also obtained government funding from the Ministry of Science and Technology’s 863 Hi-tech Programme and from the local Shenzhen government. ’So far we have received government funding totalling US$3 million. The financial support illustrates the Chinese government’s eagerness for innovation,’ says Lu.

The financial security allowed Chipscreen to focus on its new diabetes drug - Chiglitazar Sodium acts on a peroxisome proliferator-activated receptor (PPAR) that regulates gene expression. PPAR has also attracted the interest of big pharma firms such as Astrazeneca and Bristol-Myers Squibb. 

In 2004, Chipscreen finished its pre-clinical studies for Chiglitazar Sodium and filed a clinical trial application to the State Food and Drug Administration (SFDA). To Lu’s surprise and dismay, SFDA officials, who had previously shown much enthusiasm for innovative drugs, demanded high levels of technical detail for future clinical trials.

"How can we be expected to get so many technical details for non-existent trials?" - Lu Xianping

Lu can understand the need to ask generic drug developers to provide such information because many of the clinical trial details from the original drugs can be freely traced using the US Food and Drug Administration’s open databases. ’But an innovative drug like ours has never had a clinical trial,’ explains Lu. ’How can we be expected to get so many technical details for non-existent trials?’

After much persuasion, the SFDA cleared Chiglitazar Sodium for clinical trials within six months, faster than for many other Chinese drugs. The drug’s phase I clinical trials delivered good results and the early stages of phase II trials also showed promise. But then Chipscreen hit a new hurdle when it discovered that a company must have a GMP (good manufacturing practice) factory before it can license a drug in China. ’We have used all of our money for the trials and have no funds for a factory,’ admits Lu.

Funding crisis

Although Lu has yet to find funding for the GMP factory, he remains philosophical. ’We understand why the SFDA has to have such harsh regulations. In China, so many pharma firms would behave badly without the regulator’s strict control. If the requirements are softened for a small number of innovative drug makers, generic drug companies could take advantage of the legislative loopholes. This could endanger patients’ lives.’

Chipscreen is seeking financial support for its GMP factory from local governments eager to support innovation. ’To be innovative in China, you must be able to adapt and seek out advantageous policies,’ says Lu