Today we are unveiling the second installment in our video series highlighting companies held by the China BioPharma ETF (Nasdaq: CHNA). We launched CHNA in August of 2018 because we are excited about the transition towards innovation that is happening in China’s biopharmaceutical sector today. Many Chinese companies are working at the forefront of drug development and aim to be global leaders in our industry. However, this story can sometimes be hard to articulate to those who are unable to visit and see it for themselves. Therefore, the videos are our way of taking our investors and readers to China so you can hear and see straight from the companies about the important work they are doing. No passport required. View a list of all companies held by the CHNA BioPharma ETF.
Today’s video highlights WuXi Biologics (HKEX: 2269) and features its CEO Chris Chen, Ph.D., Chief Technology Officer, Senior Vice President Weichang Zhou, Ph.D., and Vice President Jill Cai. The video was filmed at the company’s research and development (R&D) center in Shanghai, China. As the name suggest, WuXi Biologics is focused on the development of biologic medicines. Unlike chemically synthesized drugs, biologics are derived and produced from natural living organisms such as humans, animals, or microorganisms. Some of the best selling medicines in the world today are biologics, such as AbbVie’s rheumatoid arthritis therapy Humira, Roche’s cancer drugs Rituxan, Herceptin, and Avastin, and Amgen’s neutropenia therapy Neulasta. Because these drugs are made from living organisms, they tend to be more difficult to make than traditional medicines.
WuXi Biologics’ roots date back to June of 2011 when its parent company, WuXi AppTec, established a Biologics Process and Bioprocess Department (the predecessor of WuXi Biologics) and began building out facilities required for biologics development. Since then, it has focused on establishing state-of-the-art research and manufacturing facilities and striking partnerships with pharmaceutical and biotech companies in the space. As WuXi Biologics built out it capabilities over time, the company grew more independent and was ultimately spun out of WuXi AppTec and listed as its own company on the Hong Kong Stock Exchange in June of 2017. Having this singular focus on biologics might be an advantage for the company given how different biologics are from traditional medicines.
Although WuXi Biologics is an expert in the biologics space, its business model is not to develop and commercialize the drugs itself. Instead, it is a service provider to other companies that bring ideas for new drugs to it and need help discovering, developing, and manufacturing them. The company is meant to be a one-stop expert service to these clients. WuXi Biologics currently has more than 200 global partners. This includes everything from 13 of the 20 largest pharmaceutical companies in the world to smaller startups that are just getting their start in biologics drug development. One of its key partnerships was struck with AstraZeneca in 2015 to expedite that company’s innovative biologics portfolio in China.
It is impressive to consider the breath of work the company is involved in and how integral it is to the biologics space all around the world today. As Dr. Zhou mentions in the video, WuXi Biologics is currently working on more than 180 different molecules, which is about 12% of the world’s biologics pipeline. As the above graphic illustrates, the company and its partners are working on biologics at all stages of the development process. The Food and Drug Administration in the United States has even already approve one, an HIV medicine called Trogarzo that is marketed by its partner TaiMed. Given how integral WuXi Biologics has become to the global biologics supply chain, it is now rapidly expanding outside of China so that it can have more capacity and be located closer to some of its global clients. It is currently building large biologics facilities in Singapore, Ireland, and in Massachusetts in the United States. It also broke ground in November on this new 1.6 million square foot campus in Shanghai.
As the CEO Dr. Chen says in the video, WuXi Biologics wants to position itself as a global company, and that means it must always meet the highest global quality standards. There are a couple of ways of ensuring this. First, it must hire the best people. WuXi Biologics currently has over 4,000 employees, including more than 300 overseas returnees and scientists with work experience abroad. The company has tried to hire the best from China, Europe, Japan, Korea, and the United States. Second, it must build the best facilities. In this respect, it has been working on that since its first Current Good Manufacturing Practice (cGMP) facility was put into operation in October of 2012. In fact, WuXi Biologics is the only company in China that is approved today by the U.S. Food and Drug Administration to make biologics both for U.S. clinical trials and also commercially for the Trogarzo HIV treatment. This is a testament to how seriously they take quality and the skill of the company to meet this high standard.
The China BioPharma ETF is thrilled to invest in innovative companies like WuXi Biologics. It exactly fits the profile of holdings we are trying to capture in the fund – not just companies that want to be leaders in China domestically, but Chinese companies that aim to be global drug development leaders. Being focused on the technically challenging biologics field and developing medicines that utilize emerging technologies such as antibody-drug conjugates and bispecific antibodies positions WuXi Biologics on the global scientific stage. We look forward to the company’s expansion as it builds new global sites, and wish them and their partners the best of luck as they develop new treatments for patients around the world. Thank you for your interest in the CHNA ETF. We hope you enjoy the video.
Opinions expressed are those of the author, or Funds and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. AbbVie, AstraZeneca, Amgen, Roche, and TaiMed are not a holding of the Fund or affiliated with the Fund.