Pilot project allows foreign-invested businesses to boost CGT development

In a significant move toward liberalization in the healthcare sector, Shanghai's Pudong New Area witnessed the first batch of six foreign-invested biotechnology companies, including Merck Testing and Frontera Therapeutics, complete changes in their business scopes to include cell and gene therapy last week.

The changes signified a milestone in a pilot project that allowed foreign-invested enterprises to engage in the development and application of human stem cells, gene diagnostics and therapeutic technologies in Pudong.

The move aligned with a notice issued in September jointly by the Ministry of Commerce, the National Health Commission and the National Medical Products Administration that permitted foreign-invested companies to engage in such technologies in eight cities, including Beijing and Shanghai, and in Hainan province.

Companies in these areas are allowed to manufacture and register related products. Approved products can be used by patients nationwide.

The initiative showcased not only China's proactive approach toward expanding its openness, but also its commitment to offering global enterprises new opportunities.

Multinational companies said such policy relaxation enables them to bring their advanced technologies and expertise to China, and foster collaborations with local research institutions and businesses to jointly develop new technologies and products.

Cell and gene therapy, also known as CGT, represents the latest generation of precision medical treatments — following small molecule and large molecule targeted therapies — offering innovative approaches to treating tumors, rare diseases, chronic illnesses and other challenging conditions.

The current negative list restricts foreign investment in the development and application of human stem cells and gene diagnostics within the CGT sector, in which China is a world leader. The exceptions are businesses that are part of the pilot project.

"The revised business scope allows for a more conducive environment for companies like us to introduce significant foreign investment, talent and technology resources. This change not only benefits individual companies, but also accelerates the progress of the domestic CGT industry," said Chen Li, executive assistant to the president of Neukio Biotherapeutics, one of the six aforementioned enterprises.

Chen added that the company is dedicated to developing next-generation immune cell products.

German company Merck Testing said that the updated scope allows the company to localize advanced technologies in Shanghai's Free Trade Zone, engage in cutting-edge biotechnology innovation and better cater to China's biomedical development needs. The company plans to introduce stem cell and gene therapy-related testing technologies from its parent company overseas within the next six months.

According to the Pudong District Commission of Science and Technology and Economy, Pudong has emerged as a core hub for the cell and gene industry with a robust industrial foundation and strong development momentum.

The district has already seen three chimeric antigen receptor-T cell therapy products approved for the market.

It is actively exploring various immunocellular therapies, stem cell therapies and gene therapies, particularly those targeting solid tumors, metabolic diseases and other major illnesses, and rapid progress is being made.

At this year's International Biopharma Industry Week Shanghai which began on Saturday, Chen Jining, Party secretary of Shanghai, emphasized the municipality's commitment to strengthening open international cooperation.

"Also, Shanghai will focus on the frontier of life sciences and innovation-driven projects, and cultivate and accumulate its competitiveness in new fields, making every effort to build a world-class biomedical industry cluster," he said.