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Chinese pharmaceutical enterprises are ramping up efforts to expand business in Southeast Asia to take advantage of favorable regulatory approval policies and mounting market opportunities.

Apart from traditional destinations, such as the United States and Europe, Southeast Asia is rising as a new attraction for Chinese pharmaceutical enterprises seeking global expansion.

On April 12, Jiangsu province-based Chiatai Tianqing Pharmaceutical Group signed an agreement with Singaporean company Specialised Therapeutics, offering the latter the exclusive right to commercialize a new anti-PD1 antibody in Australia, New Zealand, Papua New Guinea and across Southeast Asia.

In March, Shanghai-based Junshi Biosciences granted commercialization rights of its monoclonal antibody in Southeast Asia to Excellmab, a joint venture of Rxilient Biotech.

With years of experience in Southeast Asia, Kexing Biopharm signed agreements with Hangzhou-based Haichang Biotech, and Jiangsu-based Mabpharm Ltd and TOT Biopharm to help expand their business in Southeast Asia.

According to market research firm CPhI, the pharmaceutical market in Southeast Asia totaled $40 billion in 2020, and the market will grow at a compound annual growth rate of over 11 percent between 2021 and 2025.

"Rising healthcare consumption and clinical demand due to aging issues have made Southeast Asia a bigger market for Chinese pharmaceutical companies," said Wu Yue, an analyst with market information observer Anjiguancha.

"People's overall ability to afford better medical solutions and products in Southeast Asia is catching up, thanks to improved public healthcare insurance services, a stronger economy and a bigger high-income group.

"With local pharmaceutical enterprises not being able to meet demand, companies from other countries, including China, stand a chance," Wu said.

Southeast Asian countries have been strengthening public healthcare insurance and the health system in recent years, raising the threshold for drug access and optimizing regulatory approval procedures.

Vietnam, for instance, announced plans in February to improve its biotechnology industry.

"Going global has become an inevitable trend for pharmaceutical enterprises. Although the US is still an available market for Chinese innovative drugs, the approval process is becoming increasingly strict. Therefore, many pharmaceutical enterprises turn to Southeast Asia, where prospects are also promising, with its vast demand potential," Wu said.

Lai Yankun, who is in charge of overseas cooperation at Beijing-based Sinocelltech Ltd, said: "With the Regional Comprehensive Economic Partnership agreement, drugs made in China, especially biopharmaceuticals, have shown high cost-effectiveness in Southeast Asia. Chinese pharmaceutical companies are highly competitive globally.

"However, most of them have just started their inroads into the Southeast Asian market. They need more time to find solid ground for expansion."

Wu said: "Companies should be more familiar with relevant laws, regulations and registration requirements in target countries and consider proper partners for going global. In addition, as the single-market size of Southeast Asian countries is not that large, how to efficiently cover the entire region should be well considered."