China seeks to unlock secrets of herbs, roots

HONG KONG (Reuters) – Chinese legends have long extolled the benefits of the Tian Shan Xue Lian, a rare white flower found in snowcapped mountains that is revered as a panacea, an elixir so powerful it can supposedly bring the dead back to life.

But in laboratories in Shanghai and Hong Kong, scientists are poring over this cusped, wrinkly flower the size of an avocado, from which they hope to develop a new drug to treat irregular heartbeat, or atrial fibrillation, a serious disease that raises the risk of stroke.

In the quest for better and newer drugs, scientists in China are re-examining traditional Chinese medicines (TCM) -- roots and herbs that have been used for thousands of years -- to find and reproduce the active ingredients so they may be made into drugs that can be easily manufactured and consumed.

But unlike many Chinese drugmakers who already sell TCMs in powders and capsules, scientists are going a step further by putting these experimental medicines through rigorous clinical tests so that they may find wider acceptance globally.

"This flower has been used for thousands of years in Xinjiang, Tibet and India to treat a range of illnesses...For the Chinese, it was used for 'disorderly heartbeat,'" said Li Guirong, a cardiology professor at the University of Hong Kong.

"I have worked eight years on this. Our aim is to return an irregular heart rhythm to normalcy...with a drug that has fewer side effects," he said.

As Beijing shifts its growth engine to cleaner hi-tech industries, committing $1.7 trillion over the next five years to nurture them, Chinese scientists are enjoying unprecedented government support and access to funding to design better drugs and diagnostic tools for chronic illnesses such as heart disease and cancer.

Backed by government funding, Li and colleagues at the Shanghai Institute of Materia Medica began studying eight years ago the Tian Shan Xue Lian, or Herba Saussureae Involucratae, which thrives 3,000 meters above sea level in the Tibetan highlands.

They extracted its key ingredient, acacetin, created its synthetic twin and found success in experiments on dogs with atrial fibrillation.

They are now refining the compound and hope to begin human trials in three years with China National Pharmaceutical Group Corp, parent of the country's largest Hong Kong-listed drug distributor Sinopharm Group Co Ltd.

"We received a patent for it (acacetin) and hope to make it into a drug together with Sinopharm. We hope to market it in China and internationally eventually," Li said.

While TCM has been used for thousands of years, it is far less understood and accepted outside of China. By subjecting TCM-derived compounds to clinical trials, experts hope to prove their efficacy and sell them into foreign markets.

FLUSH WITH CASH

Coinciding with China's push to upgrade its domestic drug sector, Western drugmakers are muscling into China to maintain margins amid a patent cliff and fall in earnings in Western markets.

In the last two months alone, Merck & Co Inc, Pfizer Inc and Astrazeneca Plc, have announced ambitious research plans with Chinese companies to design new drugs for Chinese patients and also announced plans to expand their distribution grids.

The reason is simple: China's prescription drug market, set to be the world's second largest by 2020, is estimated to be worth more than $110 billion by 2015, from $50 billion in 2010, according to various industry researchers.

While much attention is paid to what Western drugmakers are doing in China, insiders say significant resources are quietly being directed to TCM research and the best TCM drugs will eventually figure among the world's prescription medicines.

In the last two years, the government has allotted 6.7 billion yuan ($1.06 billion) to support biotechnology companies and the search for new drugs.

Apart from Sinopharm, which aims to compete globally with quality and well-accepted drugs, other notable TCM producers are Yunnan Baiyao Group Co Ltd, which makes an anti-bleeding powder, Zhangzhou Pientzehuang Pharmaceutical Co Ltd and Jiangsu Hengruli Medicine Co Ltd, all keen to put more resources into R&D; over the next five years.

Beijing Tongrentang Co Ltd will focus on developing products using rare raw materials that have strong medicinal qualities, while China Shineway Pharmaceutical Group Ltd will give priority to state-protected and patented Chinese medicines.

This reverse approach -- working backwards with proven TCMs to find the active compound -- has been encouraged by China's best-known medical export, the anti-malaria drug artemisinin.

Artemisinin is derived from the sweet wormwood shrub, which has been used for thousands of years to treat malaria. A project by the Chinese army in the 1960s managed to isolate the active compound and it has since become the world's best line of defense against the disease.

"We will see a rebalancing away from what was an exclusive focus on Western chemical drugs to include more traditional Chinese medicines," said Jason Mann, pharmaceuticals and healthcare analyst with Barclays Capital in Hong Kong.

"The Chinese government is supporting TCM. It is a key heritage; something to be proud of. Five thousand years of history can't all be wrong. And it is just pragmatic. These are difficult, expensive diseases. Whatever approach you can take to keep patients healthy and out of hospital will be good."

($1 = 6.3178 Chinese yuan)

(Editing by Charlie Zhu, Chris Lewis and Matt Driskill)