ZURICH (Reuters) - Novartis Chief Executive Vas Narasimhan said takeover targets in China for global pharmaceuticals groups are scarce due to few novel drugs, data quality fears and lagging regulatory standards in the most-populous country.

Narasimhan added he anticipates impending structural reforms in China, including for drug tendering, will free up $30 billion as the local market shifts to international companies’ generic products from established brands. He aims for China to be Novartis’s No. 2 market, after the United States.

The 43-year-old U.S. doctor, speaking at an investor event in Boston, said many Chinese companies are focused on so-called “patented fast-follower” medicines that mimic drugs invented elsewhere, including cancer immunotherapies like PD-1s, monoclonal antibodies, and so-called CAR-T cell therapy such as Novartis’s own $475,000-per-patient cancer medicine Kymriah.

While some global pharmaceuticals companies may seek out Chinese firms to “plug gaps” in their portfolios, Narasimhan said Novartis has yet to spot appealing targets.

“We’ve yet to identify significant fundamental scientific innovation,” Narasimhan said. “Obviously, the CAR-T space is one where we’re watching very closely. But I think there, the regulatory standards need to go up, and the data quality needs to go up, to actually have comparable data.”

“It’s not always clear how many lines of prior therapy a patient had, (or) is it really even a patient with the given disease,” he added. “I think as those things get resolved in the 5-to-10 year period, you will see an (M&A) uptick but those are the barriers we see.”

He said Novartis has 14 medicines listed in China, including top-selling psoriasis and arthritis medicine Cosentyx, a development helped as Chinese regulators began allowing data collected from patients outside the country to underpin approval.