As the Chinese government implements policies aimed at increasing innovation in the life sciences industry, a new breed of domestic Chinese companies are structuring their corporate infrastructure to amplify innovation. Three themes are emerging from these innovative Chinese companies: the development of new business models, partnering with Western entities, and placing Chinese citizens at the helm that have advanced degrees and industrial experience from the West.
As an example, consider the management and business model at Hua Medicine of Shanghai. Most of Hua’supper management have worked in the U.S. in the pharma and biotech space and also came back to China and worked in the local environment. The company’s CEO, Li Chen, has extensive experience in the biopharma sector and started his career at Roche’s New Jersey R&D center. The company is working to bring clinical stage molecules to approval in China, and will utilize Western partnerships to bring the novel drugs to market in the U.S., E.U. and beyond.
As Li Chen explains in a recent interview with GBI, “Hua Medicine is testing the first-in-man molecules discovered outside of China through partnership and licensing to create a new way of doing novel drug discovery.” In addition to the company’s in-licensing strategy, Hua is also looking to step into the early drug discovery space themselves, through close contact with Chinese universities. “We know many scientists at Tsinghua University laboratory and we have collaborations with Shanghai Institute of Materia Medica….I think the quality of the molecules is getting better and better now in China, because those licensing leaders at multi-national pharmaceuticals interact with China academic and biotechs to suggest them what kind of data package is necessary to strike a deal. So, I’m quite happy about this [university licensing] kind of approach.”
China based CrownBio, gives us a hint at the kind of transformation to innovation occurring in China. After a PhD and MBA from UC Berkeley and working in the drug industry in the U.S., CEO Alex Wu returned to China to help run Crown Bio. The company started out as a CRO business and evolved into a “discovery engine” for the pharmaceutical industry. His new model encompasses a so-called 3D model, as described in a recent interview with GBI: “We Design, Define and De-risk for partners. First, we design novel molecules with IP patent applications and also we have a translational platform in oncology and diabetes that can define a clinical patient population. And because of our powerful translational platform, we can de-risk the products of our partners at a very early stage.” CrownBio’s recent partnerships cover technologies ranging from small molecule fragment-based discovery to phage display antibody development.
Innovent Biologics, headed by Michael Yu, who was recognized by the Chinese government as the most influential overseas returnee in biotech, sheds some light on innovative domestic companies and their collaborations with the West. After raising $25 million in a Series B financing, the company announced its collaboration this year with San Francisco-based Aragen Bioscience for biotherapeutic cell line production.
Beijing based Beigene is utilizing both out and in-licensing as drivers for its oncology focused business model. In June of this year, the company out-licensed ex-China rights for a pre-clinical cancer drug to Merck Serono. Beigene’s previous deals have primarily been in-licensing agreements with Western R&D companies. Founder and Chairman Xiaodong Wang, a former Howard Hughes Investigator and Distinguished Chair of Biomedical Sciences and Professor of Biochemistry at University of Texas-Southwestern, has helped structure the R&D approach to work closely with Chinese clinicians and academicians to bring innovative medicines to oncology patients in China, that will hopefully be relevant more broadly to Asia and the rest of the world.
Learn more about China’s push for innovation by attending the panel on Looking Forward: the 13th Five-Year Plan & Its Investment in Innovation at the 2013 BIO® Convention in China, November 11-13 in Beijing. Download the preliminary conference brochure here.