Novartis in China: East Meets West in R&D

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Pfizer (PFE), which set up a regional headquarters in Shanghai, is considering establishing its own R&D center in China.

"Shanghai is clearly emerging as a new epicenter of science globally, and is a magnet for the best and the brightest investigators," says Mark Fishman, who heads the Novartis Institutes for BioMedical Research in Cambridge, Mass. Novartis also hopes to capitalize on the increasing number of Chinese returning home from abroad. The new center's head of research was born in Shanghai but has spent time at MIT, Harvard, and, most recently, at Novartis' global research headquarters in Cambridge.

R&D's Twofold Path

A provisional R&D facility in Shanghai's Zhangjiang Hi-Tech Park is set to open in May, 2007, and by July, 2007, Novartis plans to have completed a permanent 38,000-square-meter facility for an estimated 400 scientists, mainly of Chinese background. The company also aims to continue mining its long-term collaborations with Chinese partners such as the Shanghai Institute of Materia Medica (SIMM), WuXi PharmaTech, Chinese University of Hong Kong National Institutes of Biological Sciences (NIBS), and Kunming Institute of Botany.

The partnership with SIMM to isolate and deliver natural products from Chinese medicine gave rise to 1,800 potential new drug targets, of which 10% have been validated and entered into preclinical development. Novartis already had success with Chinese development partners in using Chinese medicine to produce the antimalaria treatment Coartem, which is made from sweet wormwood plants grown in China.

At the new R&D center, Novartis aims to follow two paths—traditional Chinese medicine and Western drug discovery—in parallel. Initially, the focus will be on infectious causes of cancer such as the hepatitis viruses that cause liver cancer. Some one-third of the 400 million people infected with the hepatitis-B virus are in China, with experts estimating that the virus kills 300,000 people in mainland China each year.

Vasella believes China has the potential to become a global center for biomedical innovation. "As we build up our scientific expertise and capability, we will add additional research activities, and there's no reason that research we conduct in China cannot be used globally," he says.

Capell is a senior writer in BusinessWeek's London bureau.