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.
Have the latest stories on China's life science industry delivered to your inbox daily or weekly - free!
China Puts Priority on Biotech
Editor's note: "China biotech is hot" was the opinion of prominent pharma executives at the recent BIO-Europe Spring 2016 conference, who were speaking in a session entitled "Opportunities for Cross-Border Partnering and Fundraising in China." The panel discussion, moderated by Dr. Robert Narquizian, VP of International Business Development at ChinaBio®, included several China-involved executives with cross-border deals under their belts. EBD, which organized the event and is ChinaBio's partner for the upcoming ChinaBio® Partnering Forum in Suzhou (May 18-19), published a recap of the discussion at partnership360, which we reprint with their permission.
Just after the Chinese New Year in March something extraordinary happened in Beijing. Chinese Premier Li Keqiang spoke about biotech development during a formal press conference at the Great Hall of the People.
“This was the first-ever mention of biotech by a top Chinese government official,” he explained during a special panel session at BIO-Europe Spring® 2016 in Stockholm.
“Because of his talk, everyone is looking to invest in biotech. It is a new phenomenon. Local and provincial governments suddenly want to talk about biotech investment. The Chinese banks want to become limited partners. I’ll tell you a funny story. This year at the JP Morgan conference in San Francisco I saw delegations from several Chinese banks each with 30 or 50 people! Even insurance companies are interested. They are looking for experts to help, so they have been calling on my company.”
Xueming Qian is the Chairman and CEO of MabSpace BioSciences, a three-year old startup located at BioBay in Suzhou near Shanghai, and he says he sees the same thing, a marked trend where there is an abundance of money and a high interest on the part of investors.
“The government’s emphasis on developing China’s biotechnology industry has set the tone and there is this feeling that the next 10 years will become a golden time. Everyone is looking for good companies to invest in,” he said, adding that he been getting calls as well from people looking for help in making decisions.
Michael Keyoung is from South Korea, President and CEO of Genexine that in the past six months has closed USD 150 million worth of licensing and joint venture deals with Chinese pharma companies. He participated on the BIO-Europe Spring panel as proof of how a non-Chinese company can succeed in cross-border partnering
“There is a lot of money flowing and the amounts are going up exponentially,” he said.
“To enter the Chinese market, you may come in by licensing an asset, which we have done, or you can create a joint venture, which we have also done. But you cannot go in by yourself.”
Keyoung described different options including what he called a WOFE, a wholly foreign-owned enterprises that is an investment vehicle for mainland China. With either a joint venture or a WOFE, he said, a foreign company can tap into the flow of government funding at the city, county or provincial level in variations on private-public investment models or more commonly through the technology parks.
Sammy Jiang is the VP for Strategy, Planning and Business Development at Hong Kong-based Luye Pharma, a major domestic market player with a market capitalization of USD 13 billion. She cut her first international deal in Germany in 1998, and today leads Luye’s shift toward globalization of products, including the first new drug made by a Chinese pharmaceutical company to be heading for approval in the US market.
“This is a very good moment to be doing cross-border collaborations with China,” she said. “The big pharma players in China need the boost because the Chinese pharma market has slowed down. Last year was terrible. Where companies were used to 11% annual growth, it has slowed to 5%. Generics have become a real menace.”
She suggested that after China’s internet investment bubble burst, there continues to be a great deal of money among investors, and they are now turning to life sciences. They are not confident about how to invest, but they understand licensing and see opportunities here because China has unmet needs in specific therapeutic areas and the domestic pharma companies must license in to meet those needs.
The ChinaBio® Partnering Forum will be held May 18–19 in Suzhou, China.