UPMC Enterprises biopharmaceutical leader: We are at a turning point in the Chinese market

Since 2020, UPMC Enterprises, the innovation, commercialization and venture capital arm of the $28 billion Pittsburgh-based healthcare provider and insurance company, has begun investing directly in life sciences companies. Matthias Kleinz, executive vice president and head of translational science investments at UPMC Enterprises, explained in a recent interview that this is a change from the previous situation, when the focus was on the commercialization of research and intellectual property within UPMC (University of Pittsburgh Medical Center).

Since then, it has invested in several outside companies in the United States and the United Kingdom, he said. But now, the organization is looking for ways to leverage innovation beyond those regions.

“Right now we're starting to look at what's happening in China and how we can find technology there,” he said.

Historically, U.S. businesses of all stripes have largely viewed China as a huge market to sell products to, whether it's movies or medical technology and everything in between. The appeal is a thriving, growing, well-paid middle class. Alternatively, the country is seen as a source of raw materials and a large number of plastic products, whether pharmaceutical reagents or injection molds.

But now things have changed, especially dramatically. This Asian powerhouse is evolving into a place where effective innovation in healthcare takes place. Ironically, just when our relationship with China was on shaky ground, especially under the current administration, U.S. health care organizations suddenly discovered China’s potential for innovation. But Kleinz disputes this notion.

“Science has a long timeline and trajectory, so this is nothing new,” Kleinz said. “I mean, what we're seeing now from China has been years, if not decades, in the making. I think everyone has been looking at China for a long time. It's always been a question of when people will trust a product from a foreign jurisdiction to meet the standards by which the FDA and EMA evaluate their technology. I think we're getting to that point.”

Kleinz explained that entering China directly has been difficult for UPMC Enterprises, although it has invested in a technology emerging from there – Oura Medicines, which is incorporated in the United States and the United Kingdom. On Tuesday, Oura announced that the U.S. Food and Drug Administration has granted Fast Track designation to the company's BCMAxCD3 T-cell engaging antibody investigational candidate for the treatment of autoimmune hemolytic anemia and immune thrombocytopenia.

“It is developing a bispecific antibody potentially for autoimmune indications that originated in China, where the first clinical studies of phase 1 are ongoing,” Kleinz said.

While the U.S. healthcare industry is growing increasingly comfortable with Chinese innovation, interest in China appears to be about more than just the country finally catching up with developed countries' regulatory standards. It is fundamentally tied to some disturbing truths about domestic innovation cycles.

“I think we're still at a stage where people feel that the old business model, the path set by the U.S. and Europe, is too slow,” he noted. “We're seeing an incredible pace of ideation and innovation in the life sciences, but unfortunately it still takes 10 to 12 years for those ideas to get to patients.”

This makes China attractive because data can be generated quickly and is of high quality, although Kleinz advises companies to always “trust but verify” when looking to leverage innovation or data from there.

I think [interest in] China is nothing new, but I think it has reached a tipping point where the biotech, scientific and pharmaceutical communities realize we can no longer ignore it,” he said. “Often the debate is about us versus them. I think if we try to direct our resources where they will make the most difference, ultimately the world will be a better place. “

In other words, do what’s right for business and patients, and ignore much of the rhetoric in Washington, D.C., about China’s rise, which is largely about taking control of the country.

Investors and other healthcare stakeholders may have noticed that last week China announced that its trade surplus would reach a record $1.15 trillion in 2025, a 20% increase from the previous year. So it seems like this administration's quarantine efforts haven't really been successful.

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