Contents:

Intellectual Property and Outsourcing in China Executive summary 10 Pharmaceutical outsourcing in China 10 IPR protection in outsourcing to China 11 Incorporating IPR protection 12 Future developments in IPR protection 13 Chapter 1 The pharmaceutical outsourcing market in China 16 Summary 16 Introduction 17 Trends in Chinese outsourcing 18 Growth of the industry 18 The attractiveness of China 19 Fast domestic growth 21 Enhanced growth driven by international companies 22 The drug discovery process 24 Current outsourcing trends by stage 25 Outsourcing of lead discovery and optimization 25 Outsourcing preclinical research 26 Outsourcing clinical research 27 Current service capabilities 27 Early stage drug discovery 27 Pharmacological property studies and in vivo preclinical research 30 Clinical trials 30 Contract manufacturing 31 Major players in the contract research market 32 Companies outsourcing to China 35 Outsourcing by pharma and biotech companies 35 Direct involvement of Western companies in R&D in China 36 Key issues 39 Chapter 2 IPR protection in China 42 Summary 42 Introduction 43 Western perceptions of IPR protection in China 44 IPR protection by phase of development 46 Target identification and validation 47 Lead discovery/optimization 47 Drug development (including both preclinical and clinical trials) 48 Manufacturing 49 IPR protection in China 50 The development of IPR protection in China 50 Copyright theft in China today 54 Trends in patent filing 54 IPR infringement prosecutions 58 IPR infringement prosecution transparency 59 SFDA involvement 60 IPR protection in Chinese pharmaceutical outsourcing 61 Process involved in outsourcing to a Chinese CRO/CMO 61 IPR protection involved in the first step of outsourcing process 62 CRO/CMO protection of IPR 63 The current situation 63 Weaknesses in the Chinese IPR protection system 65 Brief case studies 65 In-licensing 66 Shanghai Sunway Biotech and Onyx Pharmaceuticals. 66 Hainan Noken Pharmaceuticals and Medivir AB 66 Simcere and GSK 66 Outsourcing 67 WuXi Pharmatech and AstraZeneca 67 Novartis 67 Promega and the Guangzhuo Institute of Biomedicine and Health 68 Cases of pharmaceutical IPR infringement in China 69 Togjitang Chinese Medicines Company and Yulongyadong Pharmaceuticals 69 Pfizer vs 12 Chinese pharmaceutical companies 69 Pfizer and Lianhua Pharmaceuticals 69 Chapter 3 Incorporating IPR protection into outsourcing strategies 72 Introduction 73 Potential risks in outsourcing to China 73 Assessing project suitability for outsourcing 76 Determining requirements and objectives for outsourced projects 79 Choosing a service provider 81 Classification of Chinese service providers 81 Criteria for selecting the ideal service provider 84 Measures being undertaken to protect IP at the service provider 85 Service quality 85 Cost 86 Geographic location 86 CRO/CMO business model 87 Management 88 Making the final decision 88 Strategies to protect IPR 89 Partnership 89 Incorporation of milestones or royalties into the contract 90 Alternative strategies 91 Best practice for protecting IPR during the outsourcing process 91 Risks and rewards 93 Chapter 4 Future developments in IPR protection and their impact on outsourcing 98 Summary 98 Introduction 99 Drivers and resistors 100 Further improvements in service capability and quality 100 Further improvement in IPR protection 102 Negotiating the Chinese pharmaceutical market 103 Establishing a facility in China 104 Advantages 104 Disadvantages 104 Forming a joint venture 105 Advantages 105 Disadvantages 105 Establishing a partnership 105 Advantages 106 Disadvantages 106 Outsourcing 107 Advantages 107 Disadvantages 107 Future outlook 109 Significant improvements in IPR protection 109 Fast growth in pharmaceutical outsourcing 110 Improvements in service capability 111 Market forecast 111 Chapter 5 Appendix 116 Company data 116 Research methodology 122 Glossary 123 Index 126 List of Figures Figure 1.1: Country Attractiveness Index for Clinical Trials 20 Figure 1.2: The drug discovery, development and manufacturing process 24 Figure 1.3: Distribution of CROs/CMOs by technical area 29 Figure 2.4: IP risk levels at each stage 46 Figure 2.5: Milestones in the development of China’s IPR protection system 51 Figure 2.6: Patent applications in China (total applications), 2000-2008 56 Figure 2.7: Development of patent applications filed by domestic companies and foreign companies (total applications), 2000-2008 57 Figure 2.8: Lawsuit cases in China involving IPR infringement (total infringements), 2004-200759 Figure 2.9: Outsourcing to a Chinese CRO/CMO 61 Figure 3.10: Potential risks in outsourcing 74 Figure 3.11: Criteria for classification of Chinese service providers 81 Figure 3.12: Risks and rewards in outsourcing 94 Figure 4.13: The Chinese outsourcing industry size ($bn), 2007-2015 113 List of Tables Table 1.1: Profile of Suzhou BioBay Industrial Park 22 Table 1.2: Major multinational CROs in China 22 Table 1.3: Distribution of CROs/CMOs by technical area 28 Table 1.4: Major Chinese players in contract research 33 Table 1.5: Major multinational CROs in China and their activities 34 Table 1.6: Multinational companies with projects outsourced to China 37 Table 1.7: Generic manufacturers with activities in China 38 Table 1.8: Venture capital firms with Chinese activities 38 Table 2.9: Government educational program 52 Table 2.10: Government actions to strengthen IPR protection 53 Table 2.11: Patent applications in China (total applications), 2000-2008 56 Table 2.12: Development of patent applications filed by domestic companies (total applications), 2000-2008 57 Table 2.13: Development of patent applications filed by foreign companies (total applications), 2000-2008 58 Table 2.14: IPR infringement cases in China 59 Table 3.15: Checklists for self-assessment of IPR risk tolerance level 79 Table 3.16: Criteria for selecting the ideal service provider 84 Table 4.17: Chinese outsourcing industry, 2007-2015 112 Table 5.18: Company Profile of WuXi PharmaTech 116 Table 5.19: Company Profile of ChemPartner 117 Table 5.20: Company profile of Shanghai Sunway Biotech Co. 118 Table 5.21: Company profile of BioDuro 119 Table 5.22: Company profile of Chemizon 119 Table 5.23: Company Profile of Radiant Pharma & Tech 120 Table 5.24: Company Profile of Jiangsu Zhongdan 120 Table 5.25: Company profile of Sundia Meditech 121 Table 5.26: Company profile of HD Biosciences 121

Companies Mentioned

-WuXi PharmaTech -ChemPartner -Shanghai Sunway Biotech Co. -BioDuro -Chemizon -Radiant Pharma & Tech -Jiangsu Zhongdan -Sundia Meditech -HD Biosciences