Recruiting in China

By James A. White

The global drug industry’s long push into China continued today, as Novartis said it plans to spend $1 billion to expand its R&D center in Shanghai. Dow Jones has the details.

CEO Daniel Vasella said the company’s Shanghai work force will grow from 160 to about 1,000, putting it on par with Novartis’s research center in Cambridge, Mass. Novartis’s Basel research center will remain the largest for the Swiss company, which spent $7.2 billion on R&D last year.

“I think it will be a signal of China’s rising importance in the pharmaceutical industry,” Vasella told Dow Jones during a visit to Beijing, where the investment was announced. “You have to ask yourself where do you need to be down the road, and clearly it is here.”

Drug manufacturing has been shifting to China for a long time. More recently, U.S. and European companies have begun expanding their R&D operations there as well, as we noted last year when Genzyme said it planned to spend $90 million on an R&D shop in Beijing.

And as Eli Lilly reminded us recently, companies continue to hire in China and other emerging markets, even as they cut positions in the U.S. and other established markets.

China Update: Novartis said today it plans to buy 85% of a closely held Chinese vaccine maker for $125 million if Chinese authorities approve the deal. Dow Jones Newswires notes in its story that China is the world’s third-largest vaccine market.