(Yicai) Sept. 8 -- Japanese pharmaceutical giant Daiichi Sankyo has started work on a new antibody drug conjugate production plant in Shanghai's Pudong New Area, committing about CNY1.1 billion (USD154.2 million) to the project.

The new plant, located in in Zhangjiang Hi-Tech Park, will be among China’s first cross-border segmented biologics production pilots, allowing Daiichi Sankyo to split 

different manufacturing stages across locations while upholding global quality standards, the Tokyo-based company announced yesterday.

Dr. Hiroto Kashiwase, Daiichi Sankyo's executive officer and head of its global technology unit, attended the groundbreaking ceremony alongside Daiichi Sankyo China President Michio Hayashi and local government officials.

“This facility is a key driver, not just for production, but for faster patient access through added capacity and supply stability,” Kashiwase said. “It will help us deliver breakthrough ADC therapies to Chinese patients more efficiently, addressing growing and diverse treatment needs.”

Daiichi Sankyo bases high-value processes in Pudong, linking its global technology capabilities to local demand while setting best practices to support the opening-up of China's biopharmaceutical sector to the global market, the firm said.

“ADCs are central to our corporate strategy, and with more candidates advancing, additional production capacity is urgently needed,” Hayashi noted. “This new facility will reinforce our local manufacturing capability to secure stable supply and meet China’s growing oncology treatment needs.”

Segmented Biologics Pilot

The project capitalizes on China's pioneering cross-border segmented biologics production pilot program. Launched last October, it allows multinational companies to split production processes across borders while maintaining unified quality standards.

The cities of Shanghai and Beijing and the provinces of Guangdong and Jiangsu have actively joined the pilot program, with Shanghai positioning itself as a leading biopharmaceutical innovation hub.

According to a July industry analysis by PricewaterhouseCoopers, the pilot covers three main models: domestic segmentation within corporate groups, cross-border facilities set up by multinationals, and contract production through partnerships. Daiichi Sankyo's project falls into the second category, in which global players expand their Chinese operations to meet local demand.

"Multinational enterprises can form supply chain advantages from raw materials to finished products by establishing localized production bases in China, better meeting Chinese market demands and enhancing market competitiveness," PwC noted.

Segmented production “cuts companies’ fixed asset investment burdens, enables innovation, and fosters a more advanced and globally integrated supply chain,” Hayashi told Yicai earlier.

The decision to invest in the Zhangjiang facility aligns both with Daiichi Sankyo China’s localization strategy and the country's supportive policies for the biomedicine sector, he noted.

Daiichi Sankyo, which has been operating in China since the 1980s, has two ADC products approved in the Chinese market. Enhertu (trastuzumab deruxtecan) was green-lit for HER2-positive and HER2-low breast cancers in February 2023, while Datroway (datopotamab deruxtecan) was approved for specific previously treated HR-positive, HER2-negative breast cancers last month.

Editor: Futura Costaglione