Genmab CEO Encourages Western Pharma to Explore China's Biotech Despite US Concerns

Genmab's CEO urges Western pharmaceutical firms to tap into China's biotech innovation despite growing anti-Chinese sentiment. The US Biosecure Act revised to give American companies until 2032 to work with Chinese biotech firms before business tie-ups are restricted.

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Genmab CEO Encourages Western Pharma to Explore China's Biotech Despite US Concerns

Genmab CEO Encourages Western Pharma to Explore China's Biotech Despite US Concerns

Jan van de Winkel, CEO of Danish biotechnology company Genmab, is urging Western pharmaceutical firms to tap into China's biotech innovation despite growing anti-Chinese sentiment in the United States. His call comes on the heels of Genmab's $1.8 billion acquisition of US-Chinese drugmaker ProfoundBio.

Why this matters: The debate over Western pharmaceutical companies engaging with China's biotech industry has significant implications for the global pharmaceutical value chain and the development of new treatments. As geopolitical tensions continue to rise, the ability of companies to navigate these complexities will have a direct impact on their ability to innovate and remain competitive.

The US Biosecure Act, revised on Friday, gives American companies until 2032 to work with Chinese biotech firms named in the bill before business tie-ups are restricted on national-security grounds. The revised bill adds WuXi Biologics to the list of biotech companies of concern, which already includes WuXi AppTec, BGI, MGI, and Complete Genomics.

Shares of WuXi AppTec rose 3.7% in afternoon trading on Monday, while WuXi Biologics was down 4.0% and WuXi XDC fell 7.0%. Jialin Zhang, head of China healthcare research at Nomura, believes the extension reflects the importance of Chinese contract research organizations (CROs) in the pharmaceutical value chain.

"The extension reflects the fact that China [contract research organizations are] an important part of the pharmaceutical value chain, not easily to be replaced in a short term of period, thanks to their efficiency, talent pool, capacity," said Zhang. However, he notes that the US is still determined to abandon the WuXi family of companies, and the extension is merely a change from a "death penalty to life sentence" for the firms.

Despite these challenges, Genmab's CEO remains optimistic about the potential for collaboration with China's biotech sector. The company's recent acquisition of ProfoundBio, a US-Chinese drugmaker, underscores its commitment to tapping into China's innovation ecosystem.

As Western pharmaceutical companies navigate an increasingly complex geopolitical landscape, the debate over engaging with China's biotech industry is likely to intensify. While some may view the risks as too high, others, like Genmab, see opportunities for growth and innovation that cannot be ignored.

Key Takeaways

  • Genmab's CEO urges Western pharma firms to tap into China's biotech innovation despite US-China tensions.
  • US Biosecure Act revised to give American companies until 2032 to work with Chinese biotech firms before restrictions.
  • WuXi Biologics added to list of Chinese biotech companies of concern, sparking market volatility.
  • Analysts believe Chinese contract research organizations are crucial to the pharmaceutical value chain.
  • Genmab's acquisition of ProfoundBio underscores its commitment to collaborating with China's biotech sector.