Novartis' Herrling Talks China with PharmAsiaNews

Every major pharmaceutical company has a "China" strategy. Novartis is among the most aggressive: it is currently the fourth biggest supplier of medications to hospitals in that country and aims to make China one of its top 10 markets by 2010.

Reporters from FDC Reports' PharmAsia News, a sister publication to IN VIVO Blog, sat down recently with two Novartis execs well versed in all things China: Paul Herrling, Head of Corporate Research and En Li, VP and head of research for Novartis Institutes for BioMedical Research Shanghai. The two were in Shanghai to discuss Novartis’ R&D plans in China and the Pacific Rim at the China 2008 Pharmaceutical R&D Summit.

Herrling (pictured right), who also serves as chairman of the Novartis Institute of Tropical Diseases in Singapore, was in town to give a keynote address to the summit. He also visited Novartis’ China R&D center, which broke ground on its permanent headquarters in Shanghai’s Zhangjiang Hi-Tech park April 2. Novartis, which has more than 2000 full-time employees in China, has said it plans to make an initial investment of $96 million to build the R&D center, focusing on treatments for diseases with a high prevalence in that country. (Our 2006 take on the NITD and its ilk can be found here.)

PharmAsia News: In your keynote talk, you mentioned Novartis' efforts in China to develop Western medications based on traditional Chinese medicine. Can you elaborate on your strategy?

Paul Herrling: China wanted for a while at first for us to come here and establish our research institutes because of a number of reasons we've heard like patents [and] talent development. And we weren't quite sure at what level China was - it was clear that it was going to be a tremendous market, because, mostly in the U.S., a significant part of our scientists in the lab are Chinese.

And at that time, that was about 10 years ago, of course, there was nothing for them here to come back to. And that's why they were all there. So we started by setting up yearly mini-symposia where we would put 10, 15 Chinese scientists, 10, 15 Novartis' scientists in an air of choice. And just sit together for three days and talk. And actually the first of these discussions started around traditional Chinese medicine, how could we make use of that for our kind of drug discovery efforts. And that's how the Shanghai thing started.

And essentially it was a way to expand the diversity of our chemical libraries. Because what's turned out is that, during the combinatorial chemistry climb, people could all of sudden make a lot of compounds. But at the same time, the hit rates would trend to zero because the criteria on which these libraries were made were chemical, not biological. So the chemists would do what would be easy to stick on beads and to vary it easily and quickly, which was not necessarily the same that biology needed.

And Novartis was a company that actually never gave up their natural compounds, whereas most big pharma companies got rid of their natural compounds. We still have a group now of more than 50 people. And they were very much a proponent of trying to do exactly what I described in my talk, use traditional Chinese medicine as a guide to where to find active ingredients. …

So we did this symposia for 10 years and during these 10 years in which I started doing that … you wouldn't recognize China then, between then and now. Because as I always like to describe it, when you went to Beijing at that time, you know the big avenues? With the small streets on the side and the big central one? Well, when I came here the first time, the center one was filled with bicycles and the few cars had to go on the side. And now you go look at it.

And all of China has changed that way, completely. And in our era, it was very clear what we saw in the symposium, like three, four years ago, is that now the Chinese were doing major efforts to create an environment in China to get Chinese scientists abroad back into the country. …

Another aspect 10 years ago that was very clear - health, pharma was absolutely not a priority in China at that time. Food, housing, heavy industry, all of that [were] and they had no resources for research-based companies. They bought what they needed or they copied what they needed locally. And that changed. So over these 10 years talking to the Minister of Science & Technology, the Health Minister, you could see that the interest changed.

And at a certain time, about three years ago, I recommended to our bosses, now is the time for En Li's institute. And they decided, yes, they would do that and actually we decided to establish our own research institute here.

PharmAsia News: Given the debate in China about whether to build an R&D facility or a virtual one, why did Novartis decide on a bricks-and-mortar approach?

Herrling: If you think that this environment is going to be important for pharma in the future - and it is, we're totally convinced that it is one of the most important emerging markets - and it's also clear that the culture and the specifics are different than in the U.S. and in Europe. And my conviction is you can't learn without getting wet. That is, the best way to get into the mindset, to understand the local science, talent and the needs also of the patients, is by actually doing research here.

So that was the decision then that we would do that, and create this institute first as a real antenna to what the environment here is, and to learn the peculiarities. In fact, what En's institute is focusing on first - he mentioned patients - is to focus on diseases that are more predominant in China than they are in the West. And that's hepatic cancers and nasopharyngeal cancers. And to try to understand what the differences are, in particular. So these are a few thoughts. And it's going to be an integrated research and development [center].

Part one of this two-part interview appeared May 5 in PharmAsia News. To access the full interview, please visit PharmAsiaNews for a 30-day free trial.