What Investors Need to Know About Chinese RNA Biotechnology

During the 20th century, advances in biotechnology were dominated by deoxyribonucleic acid, also known as DNA. The United States lead the world in DNA research and continues to dominate it to this day. But a new star has risen; the biological research of the 21st century will be similarly dominated by DNA’s molecular cousin ribonucleic acid, RNA.

The United States is unlikely to the be world leader in RNA research. Over the last 40 years, the People’s Republic of China has positioned itself as the likely next leader in RNA-based pharmaceutical biotechnology thanks largely to its new position as a hub for RNA research.

Biotech investors will need to pay attention to this shift. While research in the United States will remain important, China’s new position in RNA research is likely to change the economic landscape of the pharmaceutical biotech industry. Here are three reasons why investors should pay closer attention to these changes and their potential implications for future speculation.

Labs in China collaborate with international biotech giants.

Over the last forty years, many of China’s biologists received their education abroad from countries such as the United States, Canada, Germany, and the United Kingdom. This means they are tuned in with the research being done in these countries as they continue to communicate and collaborate with their Western colleagues. Furthermore, a number of important international conferences now take place in China and landmark papers in biochemical research continue to originate from its laboratories [1]. China has positioned itself as a leader in the field of RNA research with an eye toward bolstering its pharmaceutical industry. Consequently, China continues to gain momentum toward its goal of becoming the world leader in biotechnology.

Investors need to pay attention to how much landmark research in the biochemistry and pharmacology of RNA comes out of laboratories located in China and the laboratories abroad collaborating with them. The gains from this research are likely to benefit companies within the country and create new opportunities for their pharmaceutical industries to dominate the next generation of RNA-based therapeutic drugs and biotechnologies.

Half of China’s existing biotech companies will disappear.

Since 2015, China has made a centralized effort to bolster its biotech industry. It has overhauled the regulations and requirements for how biotech companies can operate and this will result in a temporary upheaval in the market’s landscape. Up until now, Chinese biotech has been dominated by generic-brand pharmaceuticals of various and questionable quality. Now, priority will be given to companies who seek to develop drugs for unmet medical needs, clinical trials no longer need to be done in state-run laboratories, and standards for quality have skyrocketed. According to a report in Nature, it’s likely at least half of China’s 4,000+ biotech companies will either close their doors or be consolidated with one another [2].

Investors need to be careful not to invest blindly. They will need to pay special attention to which companies have adapted to these changes in Chinese regulatory policy and the nature of those adaptations. Special attention should be paid to companies which support unique, internationally recognized research.

Coronaviruses (CoVs) are RNA viruses.

Coronaviruses such as SARS-CoV-2 (also known as COVID-19) are going to dominate the next century of medical research. Coronaviruses also happen to be RNA viruses [3]. China has placed itself as the growing center of research in RNA, so it is well placed to become a leader in biotechnology developed to combat and prevent future pandemics.

Investors interested in the economic future of pandemic control and prevention need to pay attention to both virology and RNA research, since these two specialties will frequently overlap and contribute to each other’s success.

China will become a world-leader in 21st century pharmacology. Investors in biotech will want to pay attention to the international connections of its laboratories, how new regulations affect its existing industry, and its role in pandemic control and prevention. Research in RNA specifically will give Chinese laboratories a unique edge in future medical technologies. Investors, take note.

Sources:

[1] “An introduction to the themed issue on RNA biology in China.” portlandpress.com/essaysbiochem/article/64/6/863/227105/An-introduction-to-the-themed-issue-on-RNA-biology

[2] “The next biotech superpower.” nature.com/articles/s41587-019-0316-7

[3] “Coronavirus biology and replication: implications for SARS-CoV-2” nature.com/articles/s41579-020-00468-6

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biotech, biotechnology, RNA

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