Japanese pharmaceutical company's RMB 1.1 billion investment project kicks off, accelerating local innovation in ADC drug R&D

In recent years, Daiichi Sankyo has been accelerating the introduction of innovative antibody-drug conjugates (ADCs) into China. Public information shows that two ADC therapies jointly developed with pharmaceutical giant AstraZeneca have already been approved for marketing in China.

On September 8, Daiichi Sankyo Co., Ltd. announced the groundbreaking of a new ADC manufacturing facility in Shanghai’s Zhangjiang area, with a total investment of approximately RMB 1.1 billion. As one of the first pilot projects under China’s cross-border, segmented manufacturing program for biologics, the project will be rooted in the local market to establish a localized ADC production base, significantly boosting the domestic supply capacity for innovative ADC drugs.

Leveraging its proprietary DXd-ADC technology, Daiichi Sankyo is driving the rapid introduction of its innovative ADC portfolio into China. The company emphasized that the new Zhangjiang facility, as a national pilot project, will play a critical role in strengthening the supply chain, enabling the adoption of innovative technologies, and advancing cross-border collaboration.

China has in recent years rolled out a series of major policies to attract foreign investment in biopharmaceuticals. By deepening institutional openness, encouraging innovative production models, and improving reimbursement frameworks for innovative drugs, the government has created a favorable environment for multinational pharma companies to grow.

“Shanghai, as a leading hub for biopharmaceutical innovation in China, provides full-cycle support for multinational drugmakers through an improved industrial ecosystem, streamlined approval processes, and integration of innovation resources,” Daiichi Sankyo China noted.

ADC technology, with its precise targeted delivery mechanism, can effectively address the limitations of traditional therapies. Localized manufacturing will allow more Chinese patients to benefit from these cutting-edge treatments in a timely manner. Over the past five years, multiple ADC therapies have been approved in China, including homegrown innovations from companies such as RemeGen and Kelun Biotech. In November 2024, Kelun Biotech’s first domestic TROP2-targeting ADC, disitamab vedotin (brand name: Jiatelai), was approved in China. Since its approval, Kelun Biotech’s share price has surged more than 200%.

In July this year, RemeGen’s ADC therapy disitamab vedotin (brand name: Aidixi) filed for a new indication with China’s Center for Drug Evaluation (CDE), in combination with toripalimab for patients with HER2-expressing locally advanced or metastatic urothelial carcinoma. Over the past year, RemeGen’s Hong Kong-listed shares have climbed nearly 300%.

Industry observers expect more innovative ADC drugs to gain approvals in both China and global markets. Earlier this month, Hong Kong’s Department of Health approved Zai Lab’s ADC therapy tisotumab vedotin (brand name: Tivdak) for adult patients with recurrent or metastatic cervical cancer who progressed on or after chemotherapy. The drug was accepted for review by China’s National Medical Products Administration (NMPA) in March this year, and Zai Lab’s Hong Kong shares have nearly doubled in the past year.

Commenting on the sector, Wang Xuyu, General Manager of Sartorius China, which provides manufacturing process solutions to ADC developers including RemeGen, said that China has risen as a major source of global medical innovation, with ADCs emerging as one of the hottest areas. However, he noted that controllability during the conjugation process remains a challenge, and achieving scalable, linear production is still a technical bottleneck for the industry.

On the segmented manufacturing pilot policy, Wang added that it allows biopharma companies to more efficiently manage the process from drug intermediates to finished products. This, in turn, requires advancements in collection, storage, and transportation of intermediates, creating opportunities across the entire upstream and downstream value chain.

Source: Yicai Global