Kevin McCoy

USA TODAY

U.S. drug-making giant Pfizer (PFE) plans to invest roughly $350 million to develop a biotechnology center in China, increasing the company's footprint in the world's second-largest pharmaceutical market, the firm announced Monday.

Pfizer shares closed nearly 2% higher at $34.44 in Tuesday trading after the announcement.

The new facility, the New York-based company's first in China and third overall, will be built in Hangzhou and will provide both biologic treatments — medications made in microorganisms, plants or animal cells — for patients in China and worldwide, Pfizer said.

The plant will also make biosimilars, treatments akin to medications that already have U.S. Food and Drug Administration approval, the company said.

The medications will help cancer patients and those with other ailments, as well as enable China to deal with the emergence of non-communicable diseases and an aging population, Pfizer said.

"The local production of high-quality, affordable biosimilar medicines will have the potential to significantly improve the lives of patients not only in China but across the world," Tony Maddaluna, president of Pfizer Global Supply, said in a statement issued with the announcement.

China's pharmaceutical market, second only to the one in the U.S., was worth an estimated $105 billion in 2014 and is forecast to expand to $200 billion by 2020, according to a 2015 report by Kelly Scientific Publications.

However, the China market poses challenges for pharmaceutical companies that try to achieve simultaneous global development and registration of new medicines, Wu Xiaobin, president of Pfizer Investment China, said in a September interview with China Daily.

"In China, it can take up to eight years on average to register a treatment, compared with four in the U.S.," Wu said. "As a result, patients are experiencing poor or delayed access to the latest medicines due to regulatory and reimbursement hurdles."

Wu added that Chinese authorities in recent years "have issued a series of new policies to address this 'drug lag.' " However, he said Pfizer also faces "inconsistent policies" over prices in China's provinces, as well as challenges in hospital-level price negotiations.

In February, China's Food and Drug Administration said it would prioritize the approval process for new drugs with clear clinical value, including medications for children and the elderly, rare diseases, AIDS and malignant tumors, Reuters reported.

$160 billion Pfizer, Allergan inversion scrapped

Pfizer in May posted strong first-quarter earnings that topped Wall Street estimates. The company, which raised its financial guidance for 2016, has been weighing new financial plans following April's decision to scrap a planned $160 billion merger with Ireland rival Allergan (AGN)

The company cancelled the transaction after the Obama administration announced the latest in a series of regulations designed to make it harder to U.S. companies to slash future tax bills by shifting their headquarters to lower-tax nations.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc