What is biotech­nol­ogy?

China Daily (Canada) - - DEPTH -

In an hour, four in­vestors had stopped by Alex Zhang’s booth to seek in­vest­ment op­por­tu­ni­ties at the in­ter­na­tional biotech con­ven­tion in San Fran­cisco. “It was unimag­in­able in the past that US in­vestors should be in­ter­ested in a Chi­nese biotech com­pany,” said Zhang, in­vest­ment and fi­nan­cial di­rec­tor of Si­no­bioway Group, a ma­jor biotech com­pany in China at the Biotech­nol­ogy In­no­va­tion Or­ga­ni­za­tion (BIO)’s an­nual con­ven­tion.

The United States is the world’s leader in the biotech in­dus­try with the best tech­nolo­gies and the most in­tel­lec­tual patents, but China is mov­ing for­ward at a very fast pace, said Lin Shun­jie, di­rec­tor gen­eral of trade and in­vest­ment at the China Coun­cil for the Pro­mo­tion of In­ter­na­tional Trade (CCPIT), who led a del­e­ga­tion of more than 130 peo­ple and 37 com­pa­nies at the BIO con­ven­tion.

Despite that China lags be­hind the US by a big mar­gin in the biotech­nol­ogy sec­tor, there is great po­ten­tial for the two coun­tries to col­lab­o­rate with each other, not only in terms of in­vest­ment but also broader ar­eas, Lin said.

The growth of China’s biotech devel­op­ment is fu­eled by the coun­try’s fo­cused na­tional poli­cies and con­tin­u­ing in­vest­ment in life science and tech­nol­ogy, as well as the in­creas­ing pool of pro­fes­sion­als with glob­ally-trained back­grounds.

Biotech­nol­ogy is one of the seven strate­gic emerg­ing in­dus­tries that the Chi­nese govern­ment des­ig­nated in the 13th Five-Year Plan. “Made in China 2025”, an ini­tia­tive of the cen­tral govern­ment to up­grade in­dus­try, also des­ig­nates biotech­nol­ogy as a key in­dus­try to push eco­nomic devel­op­ment.

The bio-phar­ma­ceu­ti­cal mar­ket in China is ex­pected to reach about $601 bil­lion and the mar­ket for biotech man­u­fac­tur­ing will be at about $150 bil­lion by 2020. Union), its re­view process in China will be ex­pe­dited.”

At the same time, small and in­no­va­tive R&D biotech com­pa­nies in the US also have a strong de­sire to col­lab­o­rate with big Chi­nese com­pa­nies, ac­cord­ing to Zuo. “We of­ten re­ceive such in­quiries from over­seas,” she said.

Zhang agreed. He said col­lab­o­ra­tion with over­seas com­pa­nies means more than just mar­ket­ing prod­ucts. “Si­no­bioway aims to find the best tech­nolo­gies and best part­ners through direct in­vest­ment,” he said, adding that they ex­pected to build their aware­ness in the US mar­ket and seek po­ten­tial part­ners by at­tend­ing the BIO con­ven­tion.

“Some in­no­va­tive com­pa­nies in the US have very lim­ited re­sources in cap­i­tal, man­u­fac­tur­ing and mar­ket­ing. A part­ner­ship with Chi­nese com­pa­nies like Si­no­bioway means they have ac­cess to China’s huge mar­ket and pro­duc­tion ca­pac­ity,” he said.

BioAtla LLC, a San Diego-based com­pany fo­cused on the devel­op­ment of Con­di­tion­ally Ac­tive Bi­o­logic (CAB) an­ti­body ther­a­peu­tics, is work­ing with Si­no­bioway to de­velop sev­eral CAB can­di­dates for the Chi­nese mar­ket.

In May 2015, the two com­pa­nies en­tered into a strate­gic col­lab­o­ra­tion for the devel­op­ment and com­mer­cial­iza­tion of se­lect CAB an­ti­bod­ies and other CAB-based ther­a­peu­tics in China.

In Jan­uary this year, they se­lected the first prod­uct pro­grams for devel­op­ment. BioAtla also re­ceived $19 mil­lion in pro­gram pay­ments and equity in­vest­ment from Si­no­bioway as part of a to­tal of more than $70 mil­lion in pay­ments and in­vest­ment from Si­no­bioway over the next 12 months. In re­turn, Si­no­bioway has ex­clu­sive rights to de­velop and com­mer­cial­ize the se­lected CAB an­ti­bod­ies in China.

Last month, Si­no­bioway opened an of­fice in San Diego to fa­cil­i­tate fur­ther in­vest­ment and other po­ten­tial part­ner­ships.

Chi­nese direct in­vest­ment in the US biotech and health sec­tor has seen a dra­matic in­crease re­cently. Last year, 23 deals were reached with a to­tal value of $900 mil­lion, com­pared with only six deals worth $28 mil­lion in 2012, ac­cord­ing to Rhodium Group China In­vest­ment Mon­i­tor.

“Chi­nese in­vestors are be­com­ing in­creas­ingly savvy about the in­vest­ments they choose to di­ver­sify their port­fo­lio. Quite frankly, the biotech­nol­ogy mar­ket in the US is very healthy,” said Greg Meisel­bach, di­rec­tor of In­ter­na­tional Af­fairs with BIO.

Meisel­bach said BIO has been lead­ing mis­sions to China al­most ev­ery year to “play a fa­cil­i­ta­tor’s role for cross-bor­der part­ner­ships”.

Devel­op­ment op­por­tu­ni­ties

China is at the fore­front of sig­nif­i­cant growth within the biotech in­dus­try and Western bio­phar­ma­ceu­ti­cal lead­ers in­creas­ingly look to China for busi­ness devel­op­ment op­por­tu­ni­ties, said the or­ga­ni­za­tion in an ar­ti­cle posted on its web­site.

BIO’s mem­ber com­pa­nies are ex­port­ing more prod­ucts and tech­nolo­gies to China than ever and it has been work­ing with China to en­cour­age the coun­try to re­main open to for­eign med­i­cal tech­nol­ogy and to de­liver the broad­est pos­si­ble range of prod­ucts to its pa­tients, the or­ga­ni­za­tion said.

“China has a grow­ing ed­u­cated class of re­searchers that can help de­velop new in­no­va­tive ther­a­pies. It also has the largest spend­ing mar­ket with the largest healthcare sys­tem to de­liver the ther­a­pies to its pa­tients,” Meisel­bach ex­plained, adding that bio­phar­ma­ceu­ti­cals are some­times the best ther­a­pies to treat the lead­ing dis­eases in China, like lung can­cer and heart dis­ease.

“But like ev­ery re­la­tion­ship, there’s pos­i­tive and neg­a­tive,” he said, re­fer­ring to the chal­lenges faced by the US biotech com­pa­nies, es­pe­cially the emerg­ing ones.

“There are ar­eas in the in­dus­try that China can im­prove on – to in­crease ac­cess of Chi­nese pa­tients to the best lead­ing ther­a­pies in the world. Those is­sues mostly fall into reg­u­la­tory har­mo­niza­tion and speed­ing the drug ap­proval, and strength­en­ing in­tel­lec­tual prop­erty right for the developer of the medicine,” he said.

In­tel­lec­tual prop­erty laws are the driv­ing force for in­no­va­tion and biotech progress and the abil­ity to en­force patents is crit­i­cal, said BIO, which pre­dicts that China will be­come a hub of in­no­va­tion if it re­mains com­mit­ted to putting into place an in­no­va­tion­friendly ecosys­tem.

“In­no­va­tion is hap­pen­ing in China, but the rea­son why the US biotech econ­omy is so strong is that we foster in­no­va­tion through a va­ri­ety of poli­cies that re­ally foster in­no­va­tion and col­lab­o­ra­tion be­tween com­pa­nies and re­searchers and uni­ver­si­ties,” said Meisel­bach.

“This col­lab­o­ra­tion is called a bioe­cosys­tem, which in­cor­po­rates strong cor­po­rate reg­u­la­tory sys­tems, strong IP and low bar­ri­ers for in­vest­ment into the com­pa­nies in or­der for bioe­con­omy to re­ally flour­ish,” he said.

Ac­cord­ing to BIO’s data, the in­vest­ment in life sciences in the US takes up 23 per­cent of the coun­try’s to­tal in­vest­ment in in­no­va­tion, even higher than the IT in­vest­ment, which ac­counts for 18 per­cent.

The US has many other re­sources for early stage biotech com­pa­nies, which are, how­ever, com­par­a­tively fewer in China, such as in­cu­ba­tors that pro­vide fi­nan­cial as­sis­tance and ex­per­tise to star­tups.

“It takes time for a mar­ket to ap­pre­ci­ate and ac­cept a new tech­nol­ogy. We found the US is more sen­si­tive to in­no­va­tive tech­nolo­gies,” said Yul­ing Luo, founder and CEO of Ad­vanced Cell Diagnostics, Inc, a Bay Are­abased biotech com­pany fo­cused on RNA-based can­cer diagnostics.

He said his team had thought of start­ing their project in China 10 years ago, but they felt it was more dif­fi­cult than in the US mostly be­cause the in­vestors and the au­thor­i­ties had dif­fi­culty fully un­der­stand­ing their con­cept.

With an ini­tial fund of $250,000 from the US govern­ment, Luo said they se­cured a to­tal of $40 mil­lion later and the com­pany has made rapid growth. “All the top 10 phar­ma­ceu­ti­cals in the US and uni­ver­si­ties like MIT and John Hop­kins are our cus­tomers,” he said.

Last year, Luo’s com­pany set up an of­fice in China to ac­cess the lu­cra­tive mar­ket. He said some Chi­nese in­vestors re­cently reached out to him and were in­ter­ested in ac­quir­ing his com­pany.

“I think it’s a good trend to lever­age the Chi­nese cap­i­tal and the US cut­ting-edge tech­nolo­gies,” Luo said. “The in­no­va­tions here need fi­nan­cial sup­port and the huge pop­u­la­tion in China — 1.4 bil­lion peo­ple and 200 mil­lion to 300 mil­lion mid­dle-class — can af­ford, more high-value tech­nolo­gies now than a decade ago.”

Chi­nese stu­dents

Like Luo, who came to the US as an in­ter­na­tional stu­dent, more and more Chi­nese stu­dents with US train­ing are at­tracted by the huge Chi­nese mar­ket and plan to start their com­pa­nies in China.

Ac­cord­ing the China Cham­ber of In­ter­na­tional Com­merce, up to half of over­seas Chi­nese stu­dents ma­jored in biotech­nol­ogy and medicine be­fore 2000, and they have formed a Chi­nese-Amer­i­can biotech com­mu­nity and play an im­por­tant role in bridg­ing the biotech ex­changes and co­op­er­a­tion be­tween the two coun­tries.

Liu Fei, a post­doc­toral fel­low in nanomedicine at Stan­ford Univer­sity School of Medicine, said his team — three sci­en­tists in Sil­i­con Val­ley and two in China — was in talks with ven­ture cap­i­tal­ists in China for their pre­ci­sion can­cer early de­tec­tion prod­uct.

“Now is an op­por­tune time to start up a busi­ness in China with the avail­abil­ity of cap­i­tal, the large con­sumer mar­ket and man­u­fac­tur­ing ca­pa­bil­ity,” he said.

“The high en­ergy con­sump­tion and low pro­duc­tiv­ity in­dus­tries still pre­dom­i­nate in China, and the govern­ment has re­al­ized it and put a pri­or­ity on in­no­va­tion,” said Liu. “Com­pared with the United States, it takes less time to get a prod­uct to mar­ket, which will help us in ex­pand­ing our busi­ness glob­ally.”

Liu and his team also par­tic­i­pated in the Chun­hui Cup en­trepreneur­ship com­pe­ti­tion or­ga­nized by the Chi­nese govern­ment in or­der to get more ex­po­sure to po­ten­tial in­vestors.

“We hope to set up the com­pany by the end of this year and re­al­ize the R&D in Sil­i­con Val­ley, man­u­fac­tur­ing in China and sales in the world,” he said.

Con­tact the writer at li­azhu@ chi­nadai­lyusa.com


A del­e­ga­tion of 37 biotech com­pa­nies and more than 130 rep­re­sen­ta­tives from China at­tended the BIO In­ter­na­tional Con­ven­tion last month in San Fran­cisco. This year’s del­e­ga­tion was the largest ever to the con­ven­tion, ac­cord­ing to the China Cham­ber of In­ter­na­tional Com­merce, which led the del­e­ga­tion.

At its sim­plest, biotech­nol­ogy is tech­nol­ogy based on liv­ing or­gan­isms — biotech­nol­ogy har­nesses cel­lu­lar and biomolec­u­lar pro­cesses to de­velop tech­nolo­gies and prod­ucts to help meet so­ci­ety’s most press­ing chal­lenges to heal, fuel and feed the world and pro­tect the health of the planet.

Mod­ern biotech­nol­ogy pro­vides break­through prod­ucts and tech­nolo­gies to com­bat de­bil­i­tat­ing and rare dis­eases, re­duce our en­vi­ron­men­tal foot­print, feed the hun­gry, use less and cleaner en­ergy, and have safer, cleaner and more ef­fi­cient in­dus­trial man­u­fac­tur­ing pro­cesses.

To­day there are more than 250 biotech healthcare prod­ucts and vac­cines avail­able to pa­tients, many for pre­vi­ously un­treat­able dis­eases. More than 13.3 mil­lion farm­ers around the world use agri­cul­tural biotech­nol­ogy to in­crease yields, pre­vent dam­age from in­sects and pests and re­duce farm­ing’s im­pact on the en­vi­ron­ment.

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