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US Biotech Readies for China's Arrival as World's Biggest Drug Market

The 2014 BIO International Convention, one of the world's largest biotechnology events, saw the potential of China and the challenges of Africa dominate proceedings, while the US penchant for wearable med-tech opened up new possibilities.

Photo: Virgin territory: Branson makes his mark at the BIO International Convention.
Virgin territory: Branson makes his mark at the BIO International Convention.
Photo: Virgin territory: Branson makes his mark at the BIO International Convention.
Virgin territory: Branson makes his mark at the BIO International Convention.

Sir Richard Branson, the billionaire adventurer and founder of the Virgin Group, kicked off his keynote address at the 2014 BIO International Convention in San Diego by pouring water over Jim Greenwood, President of the Biotechnology Industry Organisation (BIO) and a former US politician. He then cut off his tie.

In his signature dark-wash jeans and a white shirt, Branson talked about space exploration and the need to remove greenhouse gases from the atmosphere. He also walked the audience through his record-breaking exploits across the world's oceans, surviving crashes and storms. Asked by Greenwood if he had ever started a biotech company, Branson had to admit: "I don't think so…" "Never had the guts?" said Greenwood, much to audience approval.

The exchange very much caught the spirit of risk-taking and innovation that characterised this latest gathering of the biotech industry. The event saw thousands convene for a wide range of businesses and industry-specific forums, with more than 28,000 meetings scheduled across its four-day run.

One of the world's largest biotech events, it took place in the heart of the Southern California biotech corridor, an area home to many of the industry's giants as well as the launch pad for innumerable life science start-ups. In the convention hallways, the common talk was of securing seed money at previous shows, only to be acquired for big bucks by big pharma several years later. As Branson said: "You have to go into a business because you feel you could make a real difference and enjoy doing it. There's no reason to set up a company unless you're going to innovate."

Invented in China

As its population becomes older and wealthier, China has become an increasingly lucrative target market for many companies attending BIO. With the country projected to be the world's biggest drug market by 2020 – at least according to IMS Health, a Connecticut-based specialist research company – much attention was naturally gravitating East. At the Emerging Opportunities in the Global Markets Forum, the talk was of innovation within China, successful partnerships and a more level playing field for Western companies in what is, currently, the world's third largest market.

Addressing the Forum, Greg Scott, Chairman of ChinaBIO, said: "One trend that we're seeing is repatriation – Chinese scientists, educated in the West, are returning home and taking back their knowledge. It's really changed the industry. The good news is that you've got talent that has been trained by the big pharma, but the bad news is that it's driving up salaries."

Scott also noted a significant increase in cross-border collaboration, citing a US$86 million collaboration on targetted oncology therapy between Indiana's Eli Lilly and Company and Shanghai-based Hutchison Medi Pharma. He also namechecked a US$531 million deal between Fosun Pharma [Shanghai] and Sellas Clinicals Holdings [Zurich], that fell through last month.

Despite the generally upbeat approach the emerging market in China, a number of concerns were also aired at the Global Markets Forum, with the issue of compliance proving particularly compelling. Referring to the recent corruption scandal surrounding GlaxoSmithKline's operation in China, Friedhelm Blobel, President of California-based SciClone Pharmaceuticals, said: "The last 12 months have sent a shock wave through pharma space. It won't change how attractive China is, but its will change the way business is done.

"Western companies have been accustomed to stringent sales compliance rules, and the move towards similar rules in China can level the playing field. It's very clear that local companies run significant risks if they don't move towards more compliant practices.

"The move is also likely to affect sales structures for big pharma companies in the region. They will review how much exposure they really want. Maybe it will make more sense for them to focus on core products. If you're a smaller company, creating partnerships is certainly a choice."

Photo: India’s biotech delegation.
India's biotech delegation.
Photo: India’s biotech delegation.
India's biotech delegation.
Photo: New for 2014: the Digital Health zone.
New for 2014: the Digital Health zone.
Photo: New for 2014: the Digital Health zone.
New for 2014: the Digital Health zone.

Partnerships were also on the mind of Doctor Ivor Royston, one of the founders of Forward Ventures, a San Diego-based venture capital company focusing on the pharmaceutical and medical sectors. Royston believes major opportunities exist in developing US innovation in China, maintaining the country has a huge patient population on the clinical side, while also offering a tremendous drug market for properly licensed treatments.

He said: "China is very attractive in term of cost-effective asset development and manufacturing. It's also only a matter of time before China is capable of matching the innovation coming from the US and Europe. China is no longer happy just to say: 'Made in China'. The emphasis is now on 'Invented in China.'"

Africa, the New Bio Frontier?

Aside from Asia, Africa is also continuing to attract considerable attention from bio and pharma companies, despite the unique challenges it presents. While many parts of Africa still struggle to provide basic medical care, there is also considerable innovation in evidence. According to some experts, the continent is now likely to "leapfrog" into digital health, while also taking on board many of the latest medical developments.

Much of Africa's biotech funding comes from charity organisations, with the Bill and Melinda Gates Foundation still among the most significant contributors. Most recently, the Foundation funded the University of Cape Town's Drug Discovery and Development Centre US$5 million research into TB and malaria treatment.

Collaboration among institutions has also been fueled by greater access to patient samples and populations with different genetic profiles, according to Jennifer Dent, President of Bio Ventures for Global Health (BVGH), a Seattle-based non-profit research organisation. She said: "There's now a real opportunity for universities to gain access to bio banks and to build relationships between Western and African scientists."

The idea of building biotech expertise through partnerships is the concept behind the African Network for Drug and Diagnostic Innovation (ANDI), an initiative that has seen a number of 'centers of excellence' launched across the continent. The project is designed to support research and development through funding and intellectual property management, while also providing support to grow capacity and promote advocacy. Explaining the need for such an arrangement, Solomon Nwaka, a Director of ANDI, said: "No single country in Africa can afford an entire study, so partnerships are fundamental."

Several experts emphasised the need for creating viable commercial opportunities within Africa, seeing these as vital for driving the kind of repatriation already witnessed in China. Emphasising the importance of this, Dennis Liotta, Professor of Chemistry at Atlanta's Emory University, said: "We're seeing new leaders emerge, but I can't overstate the importance of new commercial entities that can employ them, otherwise it will be brain drain. The model in Africa is not about having a blockbuster drug, as in Europe and the US. Instead, it's about small margins and high volumes. There's a lot of money to be made and a lot of good to be done." In order to promote such opportunities, Emory currently operates a research hub in South Africa.

Richard Hayhurst, Head of Media Relations for the European Academic Science Advisory Council, believes Africa is faced with a unique opportunity. He says: "With all the technology and millions of smartphones in circulation, they can really aim high and skip all the steps in between. They already have pay-as-you-go solar and there are Masai villages where they convert local plants into biofuel.

"Now there's a way to sequence for malaria on your smartphone, and they're testing it in Africa. More and more diagnostic companies are looking to it as a testbed. After spending time there, I couldn't believe the innovation on offer."

Digital Health Revolution

In terms of focusing on developments closer to home, this year's BIO saw the introduction of a Digital Health area on the showfloor. This is in line with the growing popularity of wireless body sensors, mobile applications and the health-related Internet of Things among US consumers. With more Americans now inclined to sport Fitbits, Jawbone and other health monitoring devices, the industry is looking towards how best to capitalise on this in terms of commercial use, clinical trials and patient care.

Commenting on the trend, Christina Vanderheuvel, a Senior Executive with Vital Connect, a California-based biosensor company, said: "We've seen a very strong interest in our products during the show. Our system, the Biopatch, tracks your vital signs and sends them to the Cloud. We are now partnering with an app creator to produce a consumer version. We are also working with pharma companies on monitoring patients at home during clinical trials."

Assessing the possibilities opened up by this latest generation of wearable sensors, Steve Erro, a product designer with San Diego-based DDStudios, said: "My hope is that we can develop a platform that compiles all of the data in one place. Right now, we're holding on to the apps, but soon someone will come up with a way to share the information from your Fitbits, your glucose meter, your medical records, and the devices in your home that are getting a pretty good picture of how you're doing. Your doctor will get one report and then have enough data about you to make an informed decision."

Photo: The HKTDC pavilion at the world’s biggest biotech event.
The HKTDC pavilion at the world's biggest biotech event.
Photo: The HKTDC pavilion at the world’s biggest biotech event.
The HKTDC pavilion at the world's biggest biotech event.

2014 BIO International Convention took place between 23-26 June, 2014 in San Diego, USA and drew 15,667 attendees from 70 countries.

Anna Huddleston, Special Correspondent, San Diego

Content provided by Picture: HKTDC Research
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