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South Africa Built a Medical Research Powerhouse. Trump Cuts Have Demolished It.

South Africa Built a Medical Research Powerhouse. Trump Cuts Have Demolished It.

New York Times5 days ago

In Cape Town, South Africa, one of the world's foremost H.I.V. researchers has been spending a chunk of each day gently telling longtime workers and young doctoral students that the money is gone and so are their jobs. When the calls are done, she weeps in her empty office.
In the heart of Johannesburg, the lobby of a building that once housed hundreds of scientists is empty of people but choked with discarded office furniture and heaps of files hastily gathered from shuttered research sites.
South Africa has for decades been a medical research powerhouse, yet its stature has been little known to people outside the field. South Africa's scientists have been responsible for key breakthroughs against major global killers, including heart disease, H.I.V. and respiratory viruses such as Covid-19. They have worked closely with American researchers and have been awarded more research funding from the United States than any other country has received.
But a swift series of executive orders and budget cuts from the Trump administration have, in a matter of months, demolished this research ecosystem.
There are grim ramifications for human health worldwide, and also for pharmaceutical companies, including American giants such as Pfizer, Merck, Abbott and Gilead Sciences, which rely heavily on South Africa's research complex when they develop and test new drugs, vaccines and treatments.
'South Africa is the beacon,' said Dr. Harold Varmus, a professor of medicine at Cornell University who was awarded the Nobel Prize in medicine for his work on cancer biology and who was a director of the National Institutes of Health.
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Out derm spot! We take a dive into the new salmon sperm skincare trend
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China has become a significant player in the biotech space, potentially threatening the lead the US holds. EY Americas industry markets leader for health sciences and wellness Arda Ural sits down with Josh Lipton and Yahoo Finance Senior Reporter Anjalee Khemlani to discuss the dynamics between the US and China in the biotech industry. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here According to a recent report from the Harvard Belfer Center for Science and International Affairs, China has the most immediate opportunity to overtake the United States in biotechnology. For more, let's welcome in Arta Rawi America's industry markets leader and Health Sciences and wellness, as well as Yahoo Finance's very own Anjali Camlani. Welcome to you both. All right, I'll start with you. Uh, maybe it's just a big question, big picture question. Does the US have the investment power, in your opinion, to overtake China in biotech? Yeah, thanks for having me. Uh, the biotech is the innovation feeder to the big pharmaceuticals and it only uh nurtures well in an ecosystem. So to answer your question, what do you need in that ecosystem for that to nurture? Uh, investment capacity, which we have been having for the last, you know, decades, if you will, to kind of keep investing in that innovation to move on. NIH has been probably the world's largest VC over $40 billion in non-dilute funding into the entrepreneurial startups. Then you have talent who has been, you know, coming all these top universities and MDs and PhDs who are dedicated to advance it. And then you need this technology transfer system so that those intellectual property translate into a startup. And then with that investment capacity, it keeps growing and then through testing and going to the humans and then ultimately being developed for everyone's use. So, uh, yes, the US still has the capacity to invest, but it is not potentially the only game in town given the development coming from China. I'm curious, Arta, because we know, I know you've been tracking the deals and uh, we've seen the number of deals steadily increasing over the years. I saw, uh, one of the ones that you sent, which looks at the number of deals so far to date for 2025 is more than half of what we saw in 2024. So we can expect that to really outpace 2024. What does that mean though? Because I know that some of the deals that are happening are more, um, what you would call licensing deals, right? It's not necessarily that this money is going to from scratch investment and innovation, but it's more stuff that has already happened and is built up. Talk to me about that and why that matters. I mean, first of all, the numbers are pretty compelling. A couple years ago, we had pretty much like no deals under a billion dollars in 2016. And as of last year, there were $30 billion worth of licensing deals from Chinese assets into the US, and 2025 is a very strong start, so they're definitely going to beat that number. So the reason why this is happening is in 2015, Chinese Communist Party put a priority of investing in biotech and that was a priority sectors. And it was 10 years ago, and that 10 years of journey started to play out for their benefit because China historically has been known for this active product ingredients and excipients, which is like the chemicals that pharmaceuticals were using to make small molecule products. And that journey now is taking them to upstream to more advanced innovation. Probably we still have not seen a first in class, but clearly they are going for best in class, like those are the shots on goal if you are seeing more and more. Well, that's why, that would be my question because I know that we've seen sort of they're doing copycats or metoos in terms of the type of innovation coming out of China. Um, do we expect that they have the wherewithal to outdo the US then in that sense, in terms of coming up with the next blockbuster for the entire world? I mean, there are a couple examples, early examples that some of the Chinese based assets actually head-to-head comparisons, you know, beat or exceed, at least match the efficacy and safety profile of some of the Western developed compounds. But this is also a journey as the audio question. So what is it, what do they need more to get there? So they have the talent. I mean a lot of Western educated MDs and PhDs went back to China working on that. The government itself as a part of prioritization program have been investing in it. So then the question is, do they have an exit strategy for those entrepreneurs? And that I think is where they are lacking because there's no like an IPO market that is comparable to the Western standards. There's no like an M&A exit until recently. I think that's where the weakness kind of may be the opportunity for them to come up. But the deals we were talking about, they're because of the intellectual property concerns, because of the concerns of reliability and trust in the data because, you know, there's no such institution in the world like FDA that everyone trusts and hopefully continue to trust. And for that reason, the deals seem to be more asset purchases. So I'm not taking a risk by operating in China, but I'm buying the asset and in a licensing deal, and I'll continue to develop it, especially if you can make this cheaper and faster in China, which has been their competitive advantage over the Western companies, then you bring that into a human fast and then the human testing can be done, validations can be done in the more Western setting. I think that can be a winning formula for the industry. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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