Did you know?

ChinaBio® Group is a consulting and advisory firm helping life science companies and investors achieve success in China. ChinaBio works with U.S., European and APAC companies and investors seeking partnerships, acquisitions, novel technologies and funding in China.  

Learn more >>

Free Newsletter

Have the latest stories on China's life science industry delivered to your inbox daily or weekly - free!

  Email address:
   

Exclusive Interview: BeiGene Lands “Large” Investment from Merck

publication date: May 2, 2011
 | 
author/source: Richard Daverman, PhD
BeiGene, Ltd., a Beijing startup that focuses on oncology drugs, announced an initial investment from Merck (NYSE: MRK) today. The exact size of the investment was not disclosed. But John Oyler, CEO of BeiGene and a Co-Founder, told ChinaBio® Today in an exclusive interview that the Merck commitment is “large.” Best of all, said Oyler, the agreement with Merck allows BeiGene to raise money from other pharmas and investors.

That’s important, because BeiGene will need to be a champion fund raiser. Its plans are big, and it must raise a correspondingly large amount of capital. The company wants to build an extensive portfolio of drug projects so that its fortunes are not dependent upon the success of a single molecule. “We plan to have the capacity for seven to ten projects in early stage and another five in clinical development,” declared Oyler.

Merck’s investment was made in a combination of debt and equity. Although the agreement does not include any Merck pharmaceutical assets for BeiGene to develop, Oyler thinks a relationship could happen sometime later. “We hope to work cooperatively with them in the future. Conceptually, they seem open to it,” he said.

From the start, BeiGene’s plans were impressive. Last November, the company was one of the eighteen presenting enterprises chosen to receive a “Most Promising Company” Award at the ChinaBio® Investor Forum, held in Suzhou’s BioBay Life Science Park (see story).

Business Model

BeiGene defines itself as a China oncology proof-of-concept company. It will seek drug candidates for cancers that afflict China’s population, including underserved types such as gastric and nasopharynx cancers. After all, Oyler points out, about one-fifth of the world’s population is Chinese, and he figures roughly 75% of the oncology drugs developed for China will have global relevance.

“BeiGene will seek assets that are very close to clinical stage in development,” said Oyler. “In this, BeiGene is opportunistic, though this part of the business model is not all that different from what other companies do,” he admitted. The company also plans to do its own research to develop novel drug candidates.

However, BeiGene is very clear about what it will not do. After taking a candidate to proof-of-concept, BeiGene expects to partner it. That means no expensive Phase III trials or manufacturing ability. Similarly, BeiGene will not set up toxicology facilities.

Instead, it expects to be a laboratory institution that emphasizes its biology capability as a competitive advantage. “We’re very committed to building the quality of oncology biology equal to that found anywhere in the world,” declared Oyler. “We are not striving for the lowest cost. We want to match the world’s highest standards of quality.”

In China, Oyler points out, biopharma has stressed chemistry, while China’s biology expertise has been a fast follower. “BeiGene has the opportunity to be strong in biology, an earlier stage of drug development, which is riskier. However, because we will have greater financial resources, we can build a portfolio of targets and spread the risk,” he said.

Also, Oyler thinks BeiGene will be especially good at working with doctors and hospitals, identifying genotypes of patients in which the drug candidates are particularly effective. As part of its program, BeiGene will emphasize the development of biomarkers, working on translational research.

“In the West, all companies are working on this,” said Oyler. “We will be doing it in China with Chinese patients, and we have altered the model somewhat. A lot of new tools are becoming cost-effective that will help the process. We see only 5% of the picture currently, but in the next 5 to 10 years, we will understand more.”

Experienced Returnees Formed the Company


The strength of BeiGene’s organization – the demonstrated success of its lead employees in bringing pharmaceutical assets to market – will be a reason companies will seek to partner their drug candidates with the company, according to Oyler. The company was formed by a stellar list of US-trained industry veterans.

Xiaodong Wang, PhD is Founder and Chairman of the Scientific Advisory Board. He is also Director of the National Institute of Biological Sciences in Beijing (across the street from BeiGene). Wang was a Howard Hughes Investigator in the US before returning to China to set up NIBS.

Peter Ho, MD and PhD, Founder and President of BeiGene, has been responsible for first-in-human trials of 17 treatments for cancer, and supervised the clinical development of over 50 oncology compounds. He was VP of Oncology Development at Johnson & Johnson (NYSE: JNJ) and Senior VP of Oncology CEDD at GlaxoSmithKline (NYSE: GSK).

Pearl Huang, PhD, is Founder and CSO at BeiGene. She led research groups that delivered such well-known cancer treatments as Tykerb, Votrient Promacta and a dozen others while working for both Merck and GlaxoSmithKline.

As for CEO Oyler, he was previously Founder and CEO of BioDuro, the 700-employee CRO in Beijing that was sold to PPD (NSDQ: PPDI) in 2009 (see story). Before that, he was CEO of Galenea, a Boston biotech spun out from MIT with funding from Otsuka. He was also co-CEO of Genta (NSDQ: GNTA), a publicly traded oncology company in the US.

Presently, BeiGene has about 60 employees, a number that will grow to about 250-300, its first plateau. At that size, Oyler believes the company can still feel like a cohesive team and retain its entrepreneurial culture. Perhaps later, it will expand beyond that level, but that’s far enough in the future that BeiGene isn’t thinking about it.

BeiGene is building lab space of 55,000-60,000 square feet in Beijing’s Zhongguancun Life Science Park. Construction began last December, and move-in is expected to take place in July.

Creating the Right Culture


After six years of running BioDuro, Oyler is impressed with the need to establish a culture in BeiGene that reflects its China roots. “There are many differences between the West and the East,” he said, “just as there are differences between Boston and San Diego. The differences require diverse ways of motivating people and getting them to work together.”

A big pharma that comes to China seeking to impose its own culture on a China-sited operation won’t work, he believes. After two to five years, management faces up to the fact that the operation hasn’t come together, and it either shuts down the operation or adapts.

In his own experience, interacting with China’s culture has broadened his ideas of how to solve problems. “We must create the right company culture for the time and place where we find ourselves. We want to build a research culture. We don’t want manufacturing.”

But most importantly, establishing the right culture for research is not a matter of broad principles. It’s a matter of constant attention to the details. “Building a successful organization is not one or two brilliant things you read about in a book. It’s a collection of small day-to day things you do consistently that add up to make the right culture,” he concluded.

See our other articles on BeiGene.

Disclosure: none.

 

Share this with colleagues:

 

ChinaBio® News

Greg Scott BIO-Europe Interview
Greg Scott Interviewed at BIO-Europe Spring

How to bring your China assets to China in 8 minutes


Greg Scott Mendelspod Interview
"Mr. Bio in China."
Mendelspod Interview

Multinational pharma held to a higher standard in China

Partner Event
November 2-3, 2023 | Shanghai
November 7-8, 2023 | Digital