Results 1 to 3 of 3

Thread: China will be a force in biotechnology

  1. #1

    China will be a force in biotechnology

    China will be a force in biotechnology

    http://www.fortune.com/indexw.jhtml?...&doc_id=209073

    CHINESE BIOTECH
    The Shape of Biotech to Come
    Gene sequencing, plant engineering, stem cells, and drugs from nature.
    FORTUNE
    Monday, September 2, 2002
    By David Stipp

    China's Biotech Is Starting to Bloom

    The Shape of Biotech to Come

    • Biotech's New Colossus
    • Finding the Bulls in Biotech
    • A New Prescription for Your Portfolio
    • China on Their Minds
    • Will R&D Make Merck Hot Again?

    China's bid for preeminence in commercial biotechnology is still largely at the concept stage. Shenzhen Kexing Bioproducts, considered China's biggest biotech company, last year earned roughly 1% of what Amgen did--the U.S. firm had profits of $1.1 billion. As of 2000, China accounted for only about 1% of the global acreage planted with bioengineered crops, according to the International Service for the Acquisition of Agri-biotech Applications, a Philippines-based nonprofit. The U.S. share was 68%.

    Yet by one measure--rapid advances in the labs--Chinese biotech already stands out globally. That's laying the groundwork for world-class commercialization in another decade. Consider:

    Gene Sequencing Not even Celera Genomics, the U.S. company that decoded the human genome at top speed, ramped up faster than the Beijing Genomics Institute. Formed in 1999 by Yang Huanming, a hard-driving researcher trained in Europe and the U.S., the institute boasts one of the world's largest gene-decoding operations: 500 staffers, 100 sequencers (machines that decipher DNA's chemical letters), and four Chinese-made supercomputers that analyze data from the sequencers. Working around the clock last year, the institute's team deciphered the genome of a strain of rice in about four months--a stunning feat, given that in 1998 an international group convened to decode the rice genome estimated that it would take a decade. Now the institute is parsing pig DNA. Its to-do list includes genomes of interest to developing nations that are low priorities in the U.S., such as dates and cassava.

    Plant Engineering China's bioengineers have tinkered with an extraordinary variety of plants--more than 50 species--adding genes for traits such as resistance to viruses and insects to everything from peanuts to papayas, according to a report in the Jan. 25 issue of Science. Chinese farmers are already reaping major fiscal and public-health gains. Those planting "Bt cotton," which carries a gene for an insect-killing toxin, have cut their use of pesticides by about 80%, reducing overall production costs by a whopping 28%--the farmers' savings in 1999 alone topped $330 million, the report noted. Even better, their incidence of pesticide-related poisonings plummeted 79%.

    Stem Cells China appears to be leaping ahead in research on embryonic stem cells, which promise to renew fading organs. In March the Wall Street Journal reported that at least four Chinese teams are said to be cloning human embryos as sources of the potent cells. In the U.S., right-to-life advocates seek a federal law banning such studies.

    Drugs From Nature Many medicines, from aspirin to the anticancer drug Taxol, came from molecules found in nature. Chinese healers' long experience with traditional nostrums promises to give its high-tech drug researchers an edge in the quest for drugs developed from old remedies' active ingredients. Chinese doctors, for example, have long used crushed-insect potions to treat infections and other ills. Hoping to capitalize on that, Entomed, a biotech in Strasbourg, France, recently teamed with the Shanghai Institute of Entomology to search for novel insect-based drugs.

  2. #2
    http://www.fortune.com/indexw.jhtml?...&doc_id=209074

    China's Biotech Is Starting to Bloom
    Made-in-China clones, plants, and drugs? The People's Republic has made big steps on the long road to global power in commercial life sciences.
    FORTUNE
    Monday, September 2, 2002
    By David Stipp

    China's Biotech Is Starting to Bloom

    Call it a great leapfrog forward: Chinese medicine is jumping into the genomics era while still at one with remedies like bear bile and dried sea horse. Barely three years old, the Beijing Genomics Institute has already emerged as a world leader--it recently stunned Western scientists by decoding the rice genome in a matter of months. Last year a Beijing team grew dog-bladder tissue on a mouse's back, a prelude to generating human tissue. In Changsha, a city in central China, researchers claim to have cloned dozens of human embryos as sources of stem cells, which promise to rejuvenate failing organs--an apparent world first, the Wall Street Journal reported in March.

    The blue-shirted throngs working the good earth are also embracing biotech. In 1988, China became the first country to commercialize a bioengineered crop: tobacco resistant to a plant virus. Last year its officials announced plans to quintuple government funding of ag-biotech research by 2005, to $500 million annually. If that goal is met, China might top U.S. government spending in the area, says Scott Rozelle, an expert on Chinese agriculture at the University of California at Davis.

    In short, two 21st-century megatrends--China's emergence as an economic colossus and the global rise of commercial life science--are coming together. For this nexus to yield a world-class biotech industry will probably take a decade or more: Turning science into commerce requires a commercial infrastructure with lots of venture capitalists, strong patent protections, and vibrant stock exchanges--the product of a daunting process of legal and cultural change that China has only just begun.

    Much sooner, though, the impact of Chinese science could make itself felt. U.S. companies and universities may well find themselves seeking access to cutting-edge Chinese biotech in drugs, agriculture, and other fields, rather than the other way around (see The Shape of Biotech to Come). Indeed, hints of that world-turned-upside-down trend are already visible in the work of a Chinese locomotive-factory engineer turned California biotech whiz turned Beijing entrepreneur named Cheng Jing.

    Three years ago the ferociously versatile Cheng spearheaded the founding of a San Diego biotech company based on technology from Tsinghua University in Beijing, where he was named a professor in 1999. The startup, Aviva Biosciences, is developing miniaturized "lab on a chip" systems for use in drug research and disease diagnosis. In an extraordinary collaboration, Tsinghua (pronounced ching wa) joined forces with venture capitalists from Taiwan to start the U.S. company. (Roll over, Mao--Tsinghua was known in the 1960s for the zeal of its Red Guards.)

    Cheng is internationally recognized as a scientist, but what really sets him apart--and puts him in the vanguard of China's push on biotech--is his commercial drive. Soon after founding Aviva, he led in the formation of a conglomerate in Beijing, Capital Biochip, that now encompasses everything from biochips to dental equipment. Recently named CEO of the company, he describes it as a "biotech empire" in the making.

    China's biotech program dates to 1986, when Deng Xiaoping, the country's late leader, anointed genetic engineering as one of seven technologies critical to economic growth. That inspired a few impressive feats, such as the implanting of virus-resistant genes in tomatoes and sweet peppers. Deng's push also engendered the first glimmer of commercial biotech in China. By 2000 there were 39 publicly traded biopharmaceutical firms in China--about a tenth as many as in the U.S., according to IMS Health, a market research firm in Fairfield, Conn. (The Chinese firms mainly sell knockoffs of U.S. bioengineered drugs---no U.S. pharmaceutical patents awarded before 1986, and only some awarded between 1986 and 1993, are protected in China.) But until recently Chinese biotech has largely been an academic affair.

    One reason is that cheap labor--which has abetted China's modernization push in other technology sectors, such as consumer electronics--confers little advantage in biotech. Bioengineered drugs are made in vats teeming with genetically engineered microbes, not on assembly lines. China's lack of strong patent protection hasn't helped either. To support its accession to the World Trade Organization last year, the People's Republic upgraded its laws to protect intellectual property. But enforcement remains a work in progress.

    The main brake on commercial biotech in China, though, has been its dearth of venture capital. In the U.S., VCs have not only pumped billions of dollars into early-stage biotech companies but also provided them with sorely needed management savvy. Over the past few years China has removed some of its regulatory barriers to foreign investing, but a major hurdle remains for both overseas and home-grown VCs: They lack good "exit strategies" for cashing out their investments in Chinese startups, such as selling shares in IPOs on exchanges catering to high-tech investors.

    "The stock markets in China are designed for state-owned enterprises" that have been privatized, explains Victor Li, a native of the People's Republic who manages a biotech hedge fund at Friedman Billings Ramsey Group in Arlington, Va. As such, they provide limited opportunities for sales of new shares. Indeed, foreign investors in China have long resorted to complex maneuvers, such as forming offshore holding companies (whose shares can be traded outside China) that have stakes in joint ventures with Chinese concerns. Few Western VCs have been willing to take on the added complexity and risk entailed by such gambits.

    China recently sought to address the VC exit problem by moving to set up a Nasdaq-like exchange in Shenzhen, a high-tech haven near Hong Kong. But the Nasdaq meltdown and accounting scandals in the U.S. put the idea on hold--Chinese officials reportedly still plan to launch the new exchange, but only after beefing up securities laws to protect investors against scams.

  3. #3
    Author
    Topic: Â* China's Biotech Is Starting to Bloom

    mkowalski99

    Member posted Aug 21, 2002 09:41 PM Â*
    ------------------------------------------------------------------------
    China's Biotech Is Starting to Bloom
    Made-in-China clones, plants, and drugs? The People's Republic has made big
    steps on the long road to global power in commercial life sciences.
    FORTUNE
    Monday, September 2, 2002
    By David Stipp

    Call it a great leapfrog forward: Chinese medicine is jumping into the
    genomics era while still at one with remedies like bear bile and dried sea
    horse. Barely three years old, the Beijing Genomics Institute has already
    emerged as a world leader--it recently stunned Western scientists by
    decoding the rice genome in a matter of months. Last year a Beijing team
    grew dog-bladder tissue on a mouse's back, a prelude to generating human
    tissue. In Changsha, a city in central China, researchers claim to have
    cloned dozens of human embryos as sources of stem cells, which promise to
    rejuvenate failing organs--an apparent world first, the Wall Street Journal
    reported in March.

    The blue-shirted throngs working the good earth are also embracing biotech.
    In 1988, China became the first country to commercialize a bioengineered
    crop: tobacco resistant to a plant virus. Last year its officials announced
    plans to quintuple government funding of ag-biotech research by 2005, to
    $500 million annually. If that goal is met, China might top U.S. government
    spending in the area, says Scott Rozelle, an expert on Chinese agriculture
    at the University of California at Davis.

    In short, two 21st-century megatrends--China's emergence as an economic
    colossus and the global rise of commercial life science--are coming
    together. For this nexus to yield a world-class biotech industry will
    probably take a decade or more: Turning science into commerce requires a
    commercial infrastructure with lots of venture capitalists, strong patent
    protections, and vibrant stock exchanges--the product of a daunting process
    of legal and cultural change that China has only just begun.

    Much sooner, though, the impact of Chinese science could make itself felt.
    U.S. companies and universities may well find themselves seeking access to
    cutting-edge Chinese biotech in drugs, agriculture, and other fields, rather
    than the other way around (see The Shape of Biotech to Come). Indeed, hints
    of that world-turned-upside-down trend are already visible in the work of a
    Chinese locomotive-factory engineer turned California biotech whiz turned
    Beijing entrepreneur named Cheng Jing.

    Three years ago the ferociously versatile Cheng spearheaded the founding of
    a San Diego biotech company based on technology from Tsinghua University in
    Beijing, where he was named a professor in 1999. The startup, Aviva
    Biosciences, is developing miniaturized "lab on a chip" systems for use in
    drug research and disease diagnosis. In an extraordinary collaboration,
    Tsinghua (pronounced ching wa) joined forces with venture capitalists from
    Taiwan to start the U.S. company. (Roll over, Mao--Tsinghua was known in the
    1960s for the zeal of its Red Guards.)

    Cheng is internationally recognized as a scientist, but what really sets him
    apart--and puts him in the vanguard of China's push on biotech--is his
    commercial drive. Soon after founding Aviva, he led in the formation of a
    conglomerate in Beijing, Capital Biochip, that now encompasses everything
    from biochips to dental equipment. Recently named CEO of the company, he
    describes it as a "biotech empire" in the making.

    China's biotech program dates to 1986, when Deng Xiaoping, the country's
    late leader, anointed genetic engineering as one of seven technologies
    critical to economic growth. That inspired a few impressive feats, such as
    the implanting of virus-resistant genes in tomatoes and sweet peppers.
    Deng's push also engendered the first glimmer of commercial biotech in
    China. By 2000 there were 39 publicly traded biopharmaceutical firms in
    China--about a tenth as many as in the U.S., according to IMS Health, a
    market research firm in Fairfield, Conn. (The Chinese firms mainly sell
    knockoffs of U.S. bioengineered drugs---no U.S. pharmaceutical patents
    awarded before 1986, and only some awarded between 1986 and 1993, are
    protected in China.) But until recently Chinese biotech has largely been an
    academic affair.

    One reason is that cheap labor--which has abetted China's modernization push
    in other technology sectors, such as consumer electronics--confers little
    advantage in biotech. Bioengineered drugs are made in vats teeming with
    genetically engineered microbes, not on assembly lines. China's lack of
    strong patent protection hasn't helped either. To support its accession to
    the World Trade Organization last year, the People's Republic upgraded its
    laws to protect intellectual property. But enforcement remains a work in
    progress.

    The main brake on commercial biotech in China, though, has been its dearth
    of venture capital. In the U.S., VCs have not only pumped billions of
    dollars into early-stage biotech companies but also provided them with
    sorely needed management savvy. Over the past few years China has removed
    some of its regulatory barriers to foreign investing, but a major hurdle
    remains for both overseas and home-grown VCs: They lack good "exit
    strategies" for cashing out their investments in Chinese startups, such as
    selling shares in IPOs on exchanges catering to high-tech investors.

    "The stock markets in China are designed for state-owned enterprises" that
    have been privatized, explains Victor Li, a native of the People's Republic
    who manages a biotech hedge fund at Friedman Billings Ramsey Group in
    Arlington, Va. As such, they provide limited opportunities for sales of new
    shares. Indeed, foreign investors in China have long resorted to complex
    maneuvers, such as forming offshore holding companies (whose shares can be
    traded outside China) that have stakes in joint ventures with Chinese
    concerns. Few Western VCs have been willing to take on the added complexity
    and risk entailed by such gambits.

    China recently sought to address the VC exit problem by moving to set up a
    Nasdaq-like exchange in Shenzhen, a high-tech haven near Hong Kong. But the
    Nasdaq meltdown and accounting scandals in the U.S. put the idea on
    hold--Chinese officials reportedly still plan to launch the new exchange,
    but only after beefing up securities laws to protect investors against
    scams.


    Still, China possesses a huge asset to help realize its high-tech dreams:
    the more than 300,000 students from mainland China who have been trained in
    foreign universities, mostly in the U.S. and Europe, since the late 1970s.
    They have included many of China's best and brightest, and thousands have
    stayed overseas for years, acquiring commercial experience as well as
    familiarity with cutting-edge academic research. Many probably never will go
    back to live in China. Indeed, Chinese officials have fretted about a brain
    drain since the mid-1980s, when they began offering incentives to lure back
    young scholars gone walkabout. Reversing the drain got much harder after
    China's leaders violently suppressed its student-led pro-democracy movement
    in 1989--thousands of visiting Chinese students settled in the West.

    But now many of the emigres are giving back, if not going back, to their
    homeland by advising and investing in its technology ventures. In a survey
    last year of Asian-born professionals in Silicon Valley, a third of the
    respondents from mainland China said they had helped businesses back home
    arrange contracts, according to the Public Policy Institute of California in
    San Francisco, which sponsored the study. Some 43% said it was at least
    somewhat likely that they would consider returning to live in China.

    Such statistics have prompted talk of a "reverse brain drain" from the U.S.
    to the People's Republic. Indeed, furious networking between China's
    expatriates and its home-based entrepreneurs has helped boost its
    modernization drive to warp speed--China has already become the world's
    largest market for cellular handsets, and it is expected to represent the
    second-largest PC market by the end of 2003. But AnnaLee Saxenian, lead
    author of the California institute's study, asserts that the U.S. has little
    to fear from the trend--it is more a "brain circulation" than a drain, she
    says. Of the 43% of Chinese respondents who said they would consider going
    home, only a third, or 14% of the total, said going back was "quite likely."

    Cheng Jing, the biotech entrepreneur, is one of the returnees, but he is
    also the epitome of the circulating brains. When I caught up with him
    recently in San Diego, he had just flown in from Beijing for a board meeting
    at Aviva, his biochip startup, where he's a director. Poised and precise,
    yet given to disarming flashes of drollery, Cheng, 39, has mastered the art
    of crossing cultural divides--including the especially tricky one between
    the lab and the boardroom. Tracing his career illuminates both the rise of
    the circulating Sino-scientist-entrepreneur and the soul of China's revving
    biotech machine.

    The youngest of three sons born to a law professor (dad) and doctor (mom),
    Cheng made his first career move, characteristically, by striking out in a
    direction utterly different from the paths taken by his parents: He trained
    in Shanghai as an electrical engineer specializing in locomotive engines.
    Assigned by the government to work in a train factory, he grew bored and
    after three years engineered an escape that was inspired by his passion for
    adventure stories. "One day I was wondering if a scientific text could be
    written in a way that would attract people the way a kung fu novel does," he
    says. "Something that came to mind was crime investigation."

    Deciding that this project would require expertise, Cheng went to his father
    and asked about studying forensic science at his dad's law school in
    Chongqing, a city in southwestern China. His father was nonplused, says
    Cheng: "He said, 'Son, you're a locomotive driver!' At that point, I
    realized my father had misunderstood my career for a long time."

    When the confusion was cleared up, the elder Cheng helped his son land a job
    as a technical assistant in the university's forensics department. That role
    brought him to the attention of a visiting U.S. professor, who decided that
    Cheng was miscast as a low-level techie and offered to help him go abroad
    for graduate studies. A few months later he was on his way to the University
    of Strathclyde in Glasgow, where he sprinted through a Ph.D. program in
    forensic biology, a specialty that exposed him to DNA fingerprinting and
    other fast-evolving biotechnologies. By the time he left Scotland in 1994,
    Cheng had begun developing novel devices to automate DNA analysis and won
    research funding from the predecessor company of Beckman Coulter, a big
    maker of scientific instruments in Fullerton, Calif.

    He spent the mid-1990s as a post-doctoral researcher at the University of
    Pennsylvania, where he began tinkering with biochips. With his flair for
    both engineering and biology, he was superbly equipped to play a role in
    biotech's miniaturization drive. Its goal is to shrink biochemistry's
    glasswork jungles into automated, postage-stamp-sized devices to analyze DNA
    and other cellular molecules. "Jing was unequivocally the most innovative
    and productive post-doc I've had in my career," says Peter Wilding, a
    prominent biochip expert who oversaw Cheng's work at Penn and who is now CEO
    of Aviva.

    After three years Cheng branched out again. "I had noticed that the Chinese
    government was strongly encouraging universities to start businesses" based
    on professors' research, he says. Planning to go home someday and capitalize
    on the trend, he decided first to seek commercial enlightenment in the U.S.
    "I wanted to see how a U.S. biotech company is started and goes through an
    IPO," he says. He got his chance when Howard Birndorf, co-founder of a San
    Diego biochip startup called Nanogen, phoned Cheng out of the blue to offer
    a job.


    Nanogen was rising to prominence as a biochip pioneer while gearing up for
    an IPO, completed in April 1998. It offered Cheng an opportunity to help
    lead a showcase project: developing a novel "bioelectronic" chip, which used
    electric fields to isolate bacterial cells from blood, cracked them open wit
    h high-voltage shocks, and then rapidly extracted their DNA for genetic
    analysis. Such devices might be deployed, for example, to quickly diagnose
    infections or identify terrorist-dispersed bacteria in water or food. In
    June 1998 a landmark report on Nanogen's new chip was featured on the cover
    of Nature Biotechnology, the field's most prestigious journal. Listing Cheng
    as lead author, the report gave him something like rock star status in
    biotech circles. When he visited China soon after, a number of its top
    universities plied him with dream job offers. Tsinghua won: Known as a life
    science mecca, it offered him a chance to set up a major biochip lab.

    One of his roles was to help commercialize Tsinghua's biochip-related
    research. He soon found overseas VCs willing to back a startup company based
    on the technology--but only if an exit were available. That inspired a bold
    stroke: They would form a Tsinghua spinoff in the U.S. "It was an unknown
    procedure--the first time for Chinese technology to be transferred out of
    the country," says Cheng. Three Chinese ministries had to sign off on the
    idea--a process that took months--as well as skeptical university officials,
    who at first suspected the foreign VCs were conspiring to give the school
    too little for its patents. "Gradually, through hard struggling, Aviva
    materialized," says Cheng, who enlisted as co-founder one of his former
    Nanogen colleagues, Wu Lei, another gifted Chinese native trained in the
    U.S. "Afterward I thought, 'Doing one company for the university is
    enough,'" Cheng says.

    But his wheeler-dealer days were just starting. In 1999, China's vice
    premier toured Tsinghua and stopped by Cheng's lab. Before he left, recalls
    Cheng, "He said, 'Jing, the time today is too short. I will make
    arrangements for you to come to the central government and give all of us an
    in-depth lecture.'" A few weeks later the former locomotive-factory engineer
    found himself giving a two-hour lecture on the future of biotech to most of
    China's top ministers. It went well--he'd anxiously rehearsed his PowerPoint
    presentation for days, using school secretaries as a test audience. Soon
    after, Cheng was tapped to lead a $40 million, two-part national biochip
    initiative. One part is a nonprofit research center based on work at
    Tsinghua and three other top medical schools and universities. The other is
    a for-profit company, Capital Biochip.

    Capital, which Cheng describes as resembling a "train without brakes going
    down a slope," quickly evolved into a biomedical holding company. Its most
    ambitious move has been to acquire Beijing-based Wandong Medical Equipment,
    a maker of X-ray systems, dental equipment, and other medical devices, which
    has 3,000 employees. Among other things, Wandong's prototyping and
    manufacturing expertise will jump-start Capital's effort to turn its biochip
    designs into products, says Cheng. Last year Capital spun off an affiliate
    in Shenzhen--ChipScreen BioSciences--that will employ biochips to help
    isolate disease-fighting substances from traditional Chinese remedies and
    other natural products. Once isolated, such active ingredients can be
    developed as proprietary pharmaceuticals. In another ambitious move, Capital
    has formed a unit to market outsiders' biomedical products under its brand
    name.

    One of Cheng's boldest innovations at Capital has been to recruit top talent
    by offering Western-sized pay--astronomical by Chinese standards. "China
    desperately needs people with management experience" at high-tech startups,
    he says. "When we tried to recruit people from the U.S., many were worried
    that their salaries would be ten or 20 times lower here. So we worked out an
    unusual plan to match U.S. salaries and stock options." But Capital's hiring
    criteria are "very tough." And those who make the cut must meet ambitious
    performance goals--or leave. Cheng says he has already booted several who
    didn't measure up.

    As part of its increasingly farflung ventures, Capital is even funding
    research at Aviva, the San Diego startup, in return for rights to market the
    resulting products in China. The U.S. company is developing systems to test
    prenatally for Down syndrome and other genetic diseases--the devices will
    obviate the need for amniocentesis by analyzing blood samples from pregnant
    women, winnowing out cells of fetuses that find their way into the maternal
    bloodstream and checking those cells for gene glitches that cause the
    disorders. Regardless of whether the new systems are successful, they
    already represent a breakthrough of sorts in Chinese-American relations--in
    effect, a Communist Party-supported enterprise is helping bankroll the
    advance of U.S. technology. Roll over again, Mao. (To be sure, Cheng and
    company are merely acting in concert with the pragmatism of the party's
    current chief, Jiang Zemin, whose "Three Represents" philosophy has put the
    party on record as supporting entrepreneurial creativity.)

    Despite Capital's runaway-locomotive quality, Cheng harbors no illusions
    about the long haul ahead. "We have to be realistic about what China has,"
    he says. "Down the road, maybe in ten to 15 years, Chinese biotech companies
    may be able to reach leading positions at the international level. This is
    not a one-day job. We're really exploring something totally new."
    ------------------------------------------------------------------------
    Posts: 667Â*|Â*From: toronto, ontario, canadaÂ*|Â*Registered: Jul 27, 2001

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •