Swiss drug maker Novartis AG (NVS) announced Tuesday that it will invest US$1 billion over the next five years, increasing research and development activities in China, including the expansion of Novartis Institute of BioMedical Research, or CNIBR, as the largest R&D center in China.
According to Novartis,CNIBR, the third largest R&D center for the company, will become the largest comprehensive R&D center in China. The institute, which is currently located in Zhangjiang High-tech Park in Shanghai, specializes in basic research and development of new drugs including small molecule and biological medicines to treat diseases that are highly prevalent in China.
Novartis plans to relocate the institute, and to expand its activities to analytics and biomarkers, in vivo pharmacology, protein production, characterization and scale-up screening and chemistry and proteomics, genomics and imaging.
CNIBR is expected to extend and increase its collaborations with institutions in China and is committed to cultivating local R&D talent. Estimates are that the number of R&D associate positions will increase from 160 today to about 1 thousand.
Novartis also announced that it has invested US$250 million in a new global technical center which is opening in Changshu, focused on technical research, development and manufacturing activities of active pharmaceutical ingredients. The company expects synergies gained from the co-location of both technical R&D and manufacturing enable significant pharmaceutical process improvements and operational efficiencies.
Demand for healthcare in China is growing rapidly, and the Chinese government is working to expand access to affordable, basic medical services to all citizens by 2020. The government recently announced that it will spend about US$124 billion over the next three years to further build the nation's health system.
The government efforts are expected to extend to expanding insurance coverage, updating public hospitals and training community healthcare workers. Activities are also anticipated to help improve health IT systems and strengthen the quality and safety of pharmaceutical production capabilities, improving access to innovative treatments. Novartis said it aims to support the government's health reform by sharing knowledge and best practices.
Chairman and chief executive officer Daniel Vasella said, "We are also pleased to contribute to the Shanghai government's aim to establish the city as the premiere R&D center for China's bio-medicine industry by 2012, as Novartis is committed to investing to further the Chinese government's strategy for stimulating economic growth, stability and enhancing the livelihood of the Chinese people."
NVS closed Monday's regular trading at $52.33 per share on the New York Exchange.
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