With China offering a constantly improving business environment, deeper industrial collaboration and more innovation, multinational corporations in the pharmaceutical industry and Chinese startups will have more growth opportunities, thereby bringing more innovative drugs to the market, said an executive of German life sciences company Bayer.

Juergen Eckhardt, executive vice-president, said the changes in China's pharmaceutical business environment over the past 30 years have been "dramatic".

He also heads Leaps by Bayer and the company's pharmaceuticals business development and licensing division.

A venture capitalist since 2002, he has served on more than 25 company boards. He first visited China in 1988. During his latest visit to Beijing in April, he said the developments in life sciences are "rapid", and that a number of scientific innovations are happening everyday.

Eckhardt said: "China has emerged as a key global innovation source in life sciences, thanks to academic collaborations for advancing scientific research, particularly in biotechnology and medicine.

"We have seen a number of pioneers emerging, who had made great contributions to driving next-generation drug innovations.

"The improvement in the country's business environment is also encouraging. Over the years, we have carried out more than 100 research collaboration projects, which led to the discovery and structural analyses of novel targets."

In November 2023, Bayer announced a partnership with Shanghai Pharma to establish a new site of its incubator Bayer Co Lab Shanghai. The first of its kind in China, it focuses on cutting-edge innovations in cell and gene therapy and oncology, aiming to foster early innovation and startups with Bayer's global innovation network and R&D expertise, and accelerating the conversion of scientific research outcomes into innovative treatments.

In April, the incubator officially kicked off the recruitment of local partners, mainly startups in China.

This year, Bayer and RTW Investments announced equity investments of $35 million and $127 million, respectively, in Jixing Pharmaceuticals Ltd, a Shanghai-based biopharmaceutical company. The three parties joined forces to advance the development of Jixing's pipeline in the fields of cardiovascular diseases and ophthalmology.

Wang Hongwei, a professor with the School of Life Sciences and vice-president of Tsinghua University, said China's biopharmaceutical industry is still nascent as local companies started in the past decade, and industrial chains in various segments are still forming.

"Because they were born in a relatively new era, they have more advantages in innovation, entrepreneurship, flexibility and efficiency."

In terms of innovative drug development, wider and deeper collaborations are increasingly seen between Chinese startups and biopharmaceutical MNCs. The former bring out new possible clinical-stage discoveries, while the latter focus more on offering support in finance, techniques, as well as talent in the subsequent stages, Wang said.

"This kind of collaboration has already been formed as an innovative ecosystem in China," he said.

Currently, Bayer operates two research and development and innovation centers and six production plants in China. Over the past five years, Bayer has obtained approval for nearly 30 new prescription drugs or new indications in China, with new drugs being launched in China almost simultaneously with the other parts of the world, latest data from the company showed.

Zheng Shanjie, head of the National Development and Reform Commission, said at an earlier forum that China will take solid steps to accelerate the development of emerging industries.

The NDRC will constantly carry out practical measures, especially in the sectors of life sciences, high-end manufacturing and digital technologies, he said.

Seeing rising business opportunities, a number of pharmaceutical MNCs have been laying more emphasis on forging local partnerships in the country. Ever since China optimized COVID-19 control measures last year, more than 20 senior executives from healthcare MNCs, including Bayer, Takeda, Abbot, Medtronic and Merck, have visited the country to forge collaborations.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said MNCs working with local partners to take advantage of complementary capabilities is an inevitable trend.