Chinese CROs for accelerated and cost-effective early-phase drug development programs: considerations for emerging biotech
China is an attractive nonclinical outsourcing option for any small biotech working their way towards an IND with time and money constraints – the total cost of typical preclinical IND-enabling project (incl. pharmacology, toxicology, ADME) can be reduced from US $1M to $300,000. Responsiveness, flexibility, and on-time reporting of Chinese CROs are often regarded as excellent. If the program involves primates – as most biologicals these days do – the cost and time savings can be even more significant. Moreover, running the IND-enabling package as dual compliant, i.e. both according to the FDA and Chinese CFDA standards, may result in early revenues through partnering or out-licensing the Chinese part of the program.
Although the nonclinical CRO Industry in China is well established – major biopharmaceutical companies have outsourced all parts of discovery and preclinical development to China since the early 2000s – the China option often remains unknown to emerging pharma and biotech startups. The nonclinical consultants advising these companies, typically based in the US or Europe, are often reluctant to recommend outsourcing nonclinical programs to remote and unfamiliar Chinese CROs, despite the obvious advantages to the client. In fact, the potential cost savings from using these CROs are so significant that companies that previously may have withered on the vine in early stages now have the opportunity to complete their IND packages and advance their programs into the clinic.
Here, I have summarized some of the key things to know when considering China for early development outsourcing:
CRO quality (incl. international GLP compliance):
As with many other things in China, you can find anything from the bottom quality to top tier. I have chosen to focus all my studies to a few top CROs that can deliver at a level comparable to best Western CROs. In my opinion there are currently 3-4 nonclinical CROs with excellent operational quality and a robust regulatory inspection history (GLP and GMP), suitable for global regulatory filings.
In these days, major part of the work at Chinese CROs are conducted for US clients, and include GLP studies designed for the purpose of eventual US FDA filing. The FDA does not routinely inspect GLP facilities in China, as they do in the US (i.e. once every two years). Instead, the inspections are scheduled ‘as needed’ - normally once every 2-3 years. In general, if there is more than 3 years since the last facility inspection the level of uncertainty increases for the sponsor. The FDA on-site inspections normally last for a week and “violative” observations are listed on a letter called FDA-483 (basically all nonclinical GLP laboratories receive this letter). Needless to say, it is important to get a copy of facility’s FDA-483, study the deficiencies and find out how the corrective actions were instituted.
When it comes to European regulatory submissions, the biggest uncertainty is on account of China not being a member of the OECD (unlike the FDA, the European regulators rarely conduct GLP inspections overseas). Many Chinese GLP laboratories like to advertise that they have passed a GLP inspection and received a “GLP certificate” from an invited European OECD authority (often Belgium). This is however a misleading statement – in fact, there is no such thing as a universal GLP certification. Theoretically, if a laboratory is inspected by a European authority and things look fine, it may provide assurance only for studies conducted at the time of the inspection, and only for the inspecting authority. Fortunately, the European regulators are currently approving IND submissions that include GLP studies from the top-tier Chinese CRO laboratories without hiccups. The eventual marketing approval, NDA, may well trigger an inspection by the EMA, and we have already seen these taking place at Chinese CROs as new products, where the bulk of toxicology was conducted in China, are now gaining worldwide regulatory NDA approvals.
Dual (+China) Compliance, Chinese Venture Capital:
There are only minor differences in GLP study principles between the US and China so the pivotal GLP studies can be conducted as bi-lingual and dual-compliant, after minor adjustments. This normally results in approximately 10-20%, price increases per study. For the oncology indication adding the China compliance generally does not require additional studies (only protocol adjustments), so the additional investment should be worthwhile to most biotech companies. However, for many other indications, China IND filing may require additional studies, such as reprotox (tier I and II). The packages are case-by-case and can ultimately be confirmed at pre-IND meetings with the Chinese CFDA.
Regarding the funding, adding the China compliance into the regulatory package may result in greater availability of private funding and, with local partnerships, even public funding. Regardless of what you may have heard about the state of Chinese economy, the funding environment is China is still awash with capital, both private and government-sponsored. In some provinces, biotech startups can get an initial government / public funding in excess of 10 million RMBs ($1.4M). Chinese venture capital companies have now established themselves in the US and Europe and are increasingly funding early-stage biotechnology companies globally – especially if the program is China-compliant.
IP is a common concern I regularly hear from Western biopharma partners. While IP may be a concern with joint ventures, especially in high tech fields such as semiconductors, it is potentially less of a concern when outsourcing to a well-established CRO. There was however one incident making international headlines in 2011, when a CRO chemist acting by himself stole and sold for personal gain sample amounts of two patented chemical compounds made for a customer. Fortunately, the repercussions were limited as the structures for the stolen compounds were available in their respective patent filings. After this incident, the major CROs have used international IP auditors to ensure their level of IP protection – it is good to check if this has been done and if a report is available for your review.
The level of Animal Welfare is another a common concern. In general, Animal Welfare in China is still at the early stages of development when compared to most Western countries. However, the CROs are aware of this clients’ concern and have gone to great lengths to outshine in the area. The operating systems to ensure Animal Welfare are normally modelled according to those in the US and Europe, and there are currently more than 60 AAALAC-certified laboratories in the country. At the top tier CROs, the housing standards follow the strictest, newly implemented EU legislations. As a matter of fact, rather than auditing the CROs for Animal Welfare, it may be prudent to focus on animal vendors, especially if the studies are large scale and involve primates from the south of China.
When it comes to standard metrics (e.g. SOPs, on-time report metrics; training programs and records etc.), the top CROs normally perform equally to their Western counterparts.
The most likely issue to encounter is the personnel turnover – the young, ambitious and dynamic workforce of China is mobile. This may not be an issue when outsourcing e.g. medicinal chemistry, but when dealing with GLP studies the personnel turnover and the resulting staff inexperience may become critical and can certainly affect operational quality. It is important to find out the turnover rate (ideally with some fact checking), and also ensure that the study director and the study team has a proper level of experience and expertise for your specific type of study (especially if it is technically demanding, e.g. involving surgery). In addition, for some study types conducted in later phases of development, such as reproductive toxicity and carcinogenicity, the Chinese CROs may not have the requisite historical database needed for the interpretation – this is something to consider for companies advanced in the clinic.
For many biotech start-ups, the opportunities presented by Chinese CROs is like a breath of fresh air. The math for progressing an IND-enabling program is suddenly feasible, and even new funding opportunities may arise through outsourcing the nonclinical studies to China. On-site in China, the top CROs can surprise a first-time visitor – I have heard sponsors stating that the facilities they inspected were ‘the best they have ever seen’.
However, more than ever, a successful outsourcing experience requires diligent CRO assessment and selection process. Despite the fact that the Chinese CRO industry has matured rapidly, there are still only a few top tier CROs that are consistently able to deliver high quality GLP studies. In order to make an informed decision, and ensure a a smooth and successful project, it is requisite to involve a third party as a guide who is up-to-date with the CROs and can guide you through the ultimate selection process, as well as the later stages of planning, in-life and reporting. The China nonclinical outsourcing solution fits especially well with the needs of smaller biopharma companies.