‘In China For Global’ Approach Fuels Chinese Biotech Forays

China's emerging role as a launch pad for global biotech ventures is slowly taking shape, fueled by ready venture capital funding and strong government support. Although capital outflow controls are tightening, the number of biotech deals will ratchet up, executives say.

A new crop of biotech startups in China is looking to partner with global players to develop antibodies to treat life-threatening conditions like cancer. The so-called "in China for Global" model is a drastic departure from "in China for China" strategy that has been trotted out as an ideal path for years.

Despite still lacking a comprehensive ecosystem for innovation, China is already on the cusp of a breakthrough, some say. Liang Schweizer, co-founder and CSO of Shanghai biotech Harbour Biomed,says the country is now catching up in emerging technologies including antibodies.

"China domestic companies have developed antibodies for years, and they are not lagging far behind," Liang told Scrip in an interview. Harbour Biomed develops antibodies to treat cancers using its transgenic mouse platform, which was acquired from Harbour Antibodies BV.

The next task is to "thread them up", Liang adding that the company's platform is a tool for developing a robust product pipeline as the end goal.

Rising Innovation

Given the increasing number of papers published in top international journals, China's basic sciences are also stepping up, although challenges in the transition from basic research to getting new medicines to patients remain.

"There are very few innovations in China, despite it offering an excellent base," Stephan Lensky, EpimAb Biotherapeutics's Chief Business Officer, told Scrip.

Even so, China for the time being offers good opportunities for biotechs to blossom, from funding to government support, from talent to venture capital investment, and the country is building up the systems conductive to a biotech boom.

A “golden age” for biotech is now taking shape in China, at a time where financial and government support are hard to find anywhere in the world, Lensky said.

A string of positive recent Chinese regulatory moves, including a decision to join the ICH regulatory process, is also expected to fuel the rush for executives to strike out and start up innovation-driven new ventures. (Also see "Innovation The Big Winner As China Joins ICH" - Pink Sheet, 13 Jun, 2017.)

Financing also seems to present few challenges, as Harbour raised $50m in a Round A financing from Advantech and Legend Capital, while EpimAb has competed a $25m financing led by Oriza Seed Capital, Decheng Capital, and 3E Bioventures.

Global Outlook Needed

Despite the good prospects, newly formed bioventures shouldn't limit themselves to China, as the global market offers more opportunities, Liang advised.

A virtual development model relying on outsourcing has made the "in China for Global" strategy possible, and executives with an international network, outlook and perspective are not willing to be constrained by Chinese boundaries, she added.

Also, developing first-in-class assets requires venturing overseas to accelerate the process, said the executive.

EpimAb recently announced a partnership with newly-listed WuXi Biologics to develop bispecific antibodies with the aim of an investigative new drug filling. The company's leading asset, EMB-01, is under preclinical study for multiple cancer targets. Under the new deal, WuXi will be responsible for establishing chemistry and manufacturing control processes, and a planned clinical study is set to begin in mid-2018.

Shanghai-based EpimAb, founded by Wu Chengbin – a former CSO of China's leading biosimilar maker CP Guojian - has set up its base in Shanghai, and satellite offices in Boston and Europe. The purpose is to define its antibody platform in the world using its proprietary FIT-ig platform.

"Given the cost to innovate, companies have to go global, leverage the global market, no matter if they intend to develop [assets] alone or collaborate," Lensky added. The Shanghai firm has also partnered with Kymab Ltd. in the UK and Innovent Biologics Inc. in Suzhou.

"We see the real competition sitting outside China," he noted, adding that while China is indeed building up its support, it will take a while to establish itself along the lines of global biotech innovation centers in the San Francisco Bay Area and Boston.

But given the recent regulatory changes that offer accelerated pathways for innovative new drugs, and the financial resources available for healthcare startups in China, it is certain that more innovation will come out of China in the future, he stressed.

Deals To Roll In?

Both Harbour Biomed and EpimAb have lured Chinese returnees and global business development executives away from multinationals to help ramp up their deal-making activities.

Liang formerly worked for Sanofi‘s Asia R&D center for years, leading its oncology research, while Lensky was formerly a corporate VP at Boehringer Ingelheim GMBH.

Both companies’ main initial goal is to start Phase I trials outside China, and to potentially license promising compounds into the country. Through an international presence in Europe and the US, such licensing deals and partnerships will increase largely, they expect.

For international companies looking to enter China, no timing is better than now, but they must be proactive in presenting at various international partnering events to increase exposure, the executives suggested. Meanwhile, Chinese companies are also increasing their participation in global biotech meetings.

Kunming Pharmaceutical Factory, listed on the Shanghai Stock Exchange, is among them. The company's director of business development, Li Wei, told Scrip that the company is looking for opportunities in chronic diseases and aging-related conditions. (Also see "China Investment Roundup: Strategic Overseas Moves Target Product Acquisitions" - Scrip, 14 Jun, 2017.)

From the editors of PharmAsia News.

Editor's note: watch video interviews with the CEO of Chinese venture EpimAb here and Roche’s Global Head of Alliance and Asset Management here.