CSPC Pharmaceuticals (HKG: 1093) shares are up 11.5% in Hong Kong today. The cause here seems to be the approval to start testing of a new cancer treatment. At which point we should note something that’s going on in the pharma world. It has been true, for many decades now, that the only important pharmaceutical regulator is the US Food and Drug Administration, the FDA. They guard access to the US market. Not gaining access to the US market pretty much meant not having a viable drug. The reason being that most of the rest of the rich world market (ie, Europe and Japan really) control drug prices and so really decent profits aren’t available. It’s the Americans who have really been paying for all pharma development.
It’s entirely true that the individual Chinese are not as rich as Americans but there are a lot more of them. Meaning that the Chinese market - and thus the Chinese regulator - is becoming an important factor. Gaining approval in China means having an - at least potentially - viable market. Which is what makes this announcement important: “The board of directors (the “Board”) of CSPC Pharmaceutical Group Limited (the “Company”,
together with its subsidiaries, the “Group”) is pleased to announce that NBL-028, a CLDN6-CD137 bispecific antibody drug independently developed by the Group, has obtained approval granted by the China National Medical Products Administration (NMPA) of the People’s Republic of China to conduct clinical trials in China for the treatment of CLDN6-expressing advanced tumors, including but not limited to testicular cancer, ovarian cancer, non-small cell lung cancer (NSCLC) and endometrial cancer.”
CSPC Pharmaceuticals share price from Google Finance
Sure, there’s good reason why CSPC shares are up, they’ve got an interesting drug treatment that is allowed to go into testing. This is much better than their very late deal to work with Pfizer on covid treatments. It’s also possible for us to have a look at their recent financials.
But the bigger issue for our investment strategies should really be that China, and the Chinese regulator, is becoming a much more important part of the global pharma development cycle. It is getting to the point where it’s entirely viable to sidestep the FDA. That is a big, big, change from the past few decades.
