For China’s vaccine industry, the coronavirus is a chance at redemption

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China is going all-in to find a vaccine to help bring an end to the coronavirus pandemic that first emerged within its borders. The chance that a domestically developed vaccine is the first one approved and commercialized has become an issue of national importance, with China’s Global Times, a pro-Beijing newspaper, calling the campaign “a battle that China cannot afford to lose.”

Finding a vaccine is a matter of global urgency, as coronavirus cases and deaths soar, and experts warn that only a vaccine will let life truly return to normal. “We need it, we absolutely need it,” said Ooi Eng Eong, an epidemiologist at the National University of Singapore.

Researchers say the life-or-death urgency of the vaccine hunt has prompted unprecedented scientific cooperation across geographies.

Yet China is not alone in painting the race for a vaccine in nationalist terms. U.S. President Donald Trump has spoken with American pharmaceutical executives about the need to produce a vaccine on American soil, and his administration reportedly offered the German biotech firm CureVac an undisclosed “large sum of money” for exclusive access to a vaccine it’s developing, though the company denies that an offer was ever on the table.

Beyond stopping a global pandemic, producing the first vaccine is akin to hitting “the jackpot” because the global patent system favors a “winner-take-all approach,” said Bryan Mercurio, a law professor at the University of Hong Kong and an expert in drug patents. “If you can [get a vaccine approved] first, you can control it,” he says. The company that manufactures the drug is likely to see its value skyrocket, and the country where it’s developed will decide how it’s distributed, Mercurio said.

In chasing a vaccine, China has a special set of circumstances to overcome, as recent controversies have crushed its credibility and overhauled its regulatory framework. Despite that, it’s well-positioned to be a competitive player in the global search since Beijing has poured billions into biotechnology recently on its quest to be recognized as a scientific and technological superpower.

Safety, trust, and capacity

In recent years, a series of domestic scandals have hampered China’s capacity for vaccine development. In December 2013, 17 children died in China shortly after receiving hepatitis B vaccinations produced by the Shenzhen-based company Biokangtai. Biokangtai was forced to temporarily halt production but was eventually let off by the Chinese government after an investigation by health authorities didn’t find a link between the deaths and the vaccines. The company resumed vaccine manufacturing and distribution a month after the scandal, but Chinese parents remained skeptical, and demand for hepatitis B vaccinations fell by 30% in subsequent months.

CHINA-HUBEI-WUHAN-MEDICAL WORKERS (CN)
A medical worker rests by the window at a hospital in Wuhan, China. The city was at the heart of a pandemic that has ignited a global race for a cure.
Xiao Yijiu—Xinhua/Getty Images

The Chinese public became similarly enraged after investigations in 2016 and 2018 showed that major vaccine producers were distributing substandard vaccines to millions of children across the country.

These incidents “undermined the trust of Chinese people in the domestically produced vaccines,” said Yanzhong Huang, an expert in Chinese and global health governance at the Council on Foreign Relations. He noted that following the scandals, up to 60% of parents surveyed in 2018 were considering vaccinating their children outside of China.

The public skepticism hit health care and pharmaceutical stocks listed on China’s Securities Index; they fell by 40% from May 2018 to the end of the year.

If there was an upside to the scandals, it was the new guidelines they prompted. In 2019, Chinese lawmakers passed stricter regulations and supervision of the industry, from vaccine research and development to distribution and injections. The measures infused some confidence into the domestic market; the health care index has rebounded roughly 4,000 points in the past year and is currently trading 15% below its May 2018 high.

At the same time, China has ramped up its investment in biotechnology. From 2013 to 2018, China’s funding of companies in the sector increased from less than $1 billion in 2013 to over $20 billion in 2018.

The biotech boom aided a concerted effort by Beijing to repatriate Chinese scientists working abroad. China had long dealt with the issue of brain drain. For decades, up to 70% of Chinese students who studied abroad established careers in their adopted countries. From 2012 to 2018, however, some 250,000 Chinese scientists working overseas in life sciences came home.

The scientists returned to an industry with more lucrative pay and friendlier working environments than in the past. Some biotechnology research firms in China are now offering salaries higher than what Chinese scientists can earn in the U.S. Plus, Chinese scientists are increasingly wary of working in the U.S. amid trade-war tensions that have resulted in the expulsion of some Chinese researchers at U.S. universities (including one who later developed a rapid COVID-19 test after returning to China).

A packed pipeline

There are at least 50 vaccine candidates currently in development around the world, a World Health Organization official said last week, and at least five of them are being developed by or in partnership with Chinese entities. Chinese media, meanwhile, reports that up to 18 vaccine makers in China are working on 36 different coronavirus vaccine projects, some of which may be too early in development to be included in WHO tallies.

The leading coronavirus vaccine candidate in China so far is called Ad5-nCov, which is being developed by the biotech firm CanSino Biologics and the Academy of Military Scientists in Beijing. On March 18, the vaccine became the second in the world to be approved for clinical testing on humans, following the U.S. biotech firm Moderna receiving U.S. Food and Drug Administration approval on March 4.

Daily Life In Shanghai After China Declared Epidemic Contained
A family wear protective masks while walking in a city park in April in Shanghai. At least five coronavirus vaccine projects listed by the WHO involve Chinese entities.
Yves Dean—Getty Images

The Chinese government has high hopes that the vaccine will prove successful since it’s the work of the same team that developed a vaccine for Ebola in 2017. The doctor leading the team, Chen Wei, has become a national hero of sorts and says the new coronavirus vaccine is based on the same technology her team used against Ebola.

Chen is a general in the People’s Liberation Army and has described the quest for a vaccine as a matter of protecting her country’s interests. “I feel obliged to find a bio shield for the country and people,” Chen recently told the Global Times.

It’s Beijing’s instinct to create “an overwhelmingly government-led approach” in times of crisis, said Karen Eggleston, director of the Asia Health Policy Program at Stanford University. Yet the country’s most successful vaccine efforts have entailed significant cooperation between Beijing and the private sector and international organizations, she said. In 2013, for example, the WHO approved the first-ever Chinese-made vaccine—one against Japanese encephalitis—that was developed by state-owned China National Biotec Group alongside PATH, a U.S.-based health research NGO, and the Bill & Melinda Gates Foundation.

China’s researchers have been working with global partners to find a coronavirus vaccine. In late January, researchers from Fudan University in Shanghai and the Baylor College of Medicine in Houston began collaborating on an effort.

But the sheer number of coronavirus projects now underway points to the fierce competition to develop a winning vaccine, even as some alliances form.

“We still have rivals working on the exact same vaccine,” said Mercurio. “And we have a hell of a lot of replication of data, which is wholly unnecessary and that will actually cost time.”

With so many efforts underway, it’s possible that more than one country will approve a vaccine around the same time, creating a kind of global contest for deployment.

“The geopolitical order may dictate to a large extent which vaccines will get licensed in certain countries,” said Mercurio. “Is health going to be at the heart of the decision? I’m not sure it can be.”

At the same time, “multiple shots on goal” may be needed to get a vaccine “across the finish line,” Ooi said. “I don’t think we know enough at this stage to be able to bet on any one succeeding.”

More coronavirus coverage from Fortune:

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—No, 5G does not cause or spread the coronavirus. What medical experts say
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—PODCAST: COVID-19 might have upended the concept of the best companies of the year
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