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Home of a gathering of new drugs: what’s difference?

time:07/18/2017 page views: resource:BioBAY
With promulgation of favorable policies by China Food and Drug Administration (CFDA),the spring for development of biomedine, especially new drugs, seems to have arrived. The renowned international media such as Wall Street Journal, American Chemical Society News Service Weekly and STAT have paid close attention to the field of China. Nature Reviews Drug Discovery said last month that recently there have been a small number of “Made in China” new drugs, some of them are first in class and have entered the international clinical test. 

From 2007 to 2017, China’s biomedicine industry has experienced a rapid development. It has been a heights for China to seize the frontiers of science and technology in the new round of competition with other countries.

This year is the 10th anniversary of the establishment of BioBay. Today it has attracted more than 500 enterprises, on a par with Zhangjiang, Shanghai, and is one of the most dynamic areas of new drug discovery of China. In the 10 years, BioBay has started from scratch and grown stronger. In 2016 it has developed 12 new chemical drugs, obtained eight clinical trial permits of biomedicine, accounting for Jiangsu’s 31% and China’s 8.5%.

The innovation and startup of high-tech industry is one of the focuses of The Intellectual. We hope to seriously investigate some enterprises, schools, governmental institutions and business platforms to explore the development experience, path and rules of innovative industries of China. Suzhou BioBay, an enterprise incubator with governmental background, represents a new model of high-tech industry and its growth and development may provide useful reference for others. 

For this purpose, The Intellectual has visited Suzhou BioBay for several times. Through the in-depth dialogue between Lu Bai, editor-in-chief of The Intellectual, and Pang Junyong, general manager of BioBay, we may pry into why BioBay has excelled in biological parks of China. Is there any other element boosting its growth, in addition to the governmental support?

01 How to be different at the beginning of establishment

Lu Bai (Lu): In the biomedicine industry, many areas have established the government-led high-tech industrial parks. They normally attract a batch of projects with favorable policies, a large sum of startup funds and services and incubate the projects concentratedly to help them grow. The purpose is nothing more than creating taxes and jobs, driving the local economic development, increasing regional GDP and its reputation in China. The strategic positioning, development concept, short- and long-term goals, property and quality of attracted projects decide the future development of industrial parks. What’s the unique design of BioBay when it was established?  

Pang Junyong (Pang): industrial carriers conceived by BioBay include not only biomedicine, but also software, multimedia, and then big data, nano materials, environmental protection and other emerging industries. At the very beginning the mission bestowed by the government was to enable biomedicine enterprises to have a relative high proportion in the park and build a platform: constructing a complete biological chain from the early stage to medium-term development, and later stage pilot scale production and marketized production while supporting SMEs and returned overseas students to start businesses here. Therefore, we took measures centering on these two goals at the very beginning. In the early stage, we did not explore a path of developing biomedicine industry in a large scale or a complete plan from R&D to industrialization, but we learned in doing. Ms. Liu Yuwen, first CEO of Suzhou BioBay, made outstanding contribution to the establishing, positioning, design and early stage development of BioBay. 

In practice, we have several distinctive characteristics.

First, precise positioning: Suzhou BioBay has a unique DNA. Normally incubators consider two points: tax and employment. We have done more. We have targeted at the biomedicine startups or new high-tech enterprises. Shanghai has many transnational pharmaceuticals and Suzhou is close to Shanghai. We did not want to compete with Shanghai directly and in fact we could not compete with it. We did not take the same development path of some other areas to attract large enterprises to open branches here. Instead we targeted at the startups at the very beginning. In this way, we gathered high-tech talents and original research and development forces and technology. It was hard to realize this purpose at the very beginning and needed a long-term plan. 

Second, company management: Suzhou BioBay has adopted the government-led company management mode and this is different from other government-funded incubators. Relying on Suzhou Venture Capital (today’s Oriza Holding), we have established a team, consisting of managers, investment professionals and professional service personnel, a marketized team with industrial thinking and professional capability. The company management is conducive to building a brand and fostering professionalism and service capability of the operation team. 

Third, giving the first priority to serving entrepreneurs: we hold a firm standpoint on this aspect and often listen to entrepreneurs for their needs. For example, they have a need of bodybuilding and we establish BioGym; they have a need of cafe, we built BioCAFE incubator, and introduced Starbucks; as the returned overseas Chinese care about schooling of their children, Suzhou Industrial Park (SIP) established Overseas Chinese Academy Suzhou; in order to facilitate communication between enterprises and the service departments, BioBay will establish a one-stop service center to provide enterprise registration, environmental protection consulting and other services for customers. 

Fourth, introducing the best talents: we have spent much on introducing the best talents and designed a variety of talent plans and innovation team plans. Suzhou BioBay is the most concentrated place of experts under the 1000-talents Plan of China with as many as 60 experts in an area of 1km2. Enterprises need good talents to develop. Today the park has become an innovative community with talents from the high level to the grassroots level.

Fifth, serving as a bridge between the government and enterprises: the government plans to promote rapid development of the biological high-tech industry, but it can not replace market to determine the enterprise development. BioBay serves as a bridge between the government and enterprises to cooperate with the administrative committee of the park to promote development of emerging industries. Characterized by openness, strong sense of reform and flexible policy, SIP can coordinate with local high-tech enterprises according to the local conditions to facilitate their development. It is noteworthy that the central government is vigorously advocating market-oriented innovation. In contrast, we have done so 10 years ago. 

02 How to realize sustainable growth in 10 years

Lu: Are the development strategies of Suzhou BioBay consistent with those designed at its commencement? Is there any difference in practice of intervening in the industry?

Pang: Suzhou BioBay has been established for 10 years. The first seven years witnessed rapid development. Innovation has become a main theme of BioBay as a governmental carrier. In terms of the development direction, it has been determined as medicine discovery, medical device and genetic technology after some exploration at the very beginning. Suzhou is good at attracting investment. A “talent introduction” program was held at that time and universities and research institutes from home and abroad have been attracted to BioBay, including Suzhou Branch of Shanghai Institute of Materia Medica of the Chinese Academy of Sciences, Suzhou Institute of Systems Medicine of Chinese Academy of Medical Sciences, Suzhou Institute of Institute of Biochemistry and Cell Biology, SIBS, CAS, Suzhou Brainspace Information Technology Institute of Huazhong University of Science and Technology and other important original innovation platforms. How to attract high-level talents? The practice at that time was that we held interactions with many overseas Chinese organizations which held gatherings of returned overseas Chinese students and entrepreneurs in the United States or China and assisted us to introduce talents. How to retain them? We not only designed supporting systems for scientific research and talents, but also formulated preferential policies on tax, funding and talent subsidies. Therefore we have attracted more than 400 companies in only several years. 

The past three years were the transformation period because BioBay has reached a certain scale and enterprises have grown stronger, and consequently the strategy should be adjusted accordingly. From the overall situation, China’s medicine industry is growing rapidly and many enterprises in BioBay have played a leading role. We are proud of that. Now we need to grasp the opportunity and try to develop new medicines and enterprises with great influence in China and the world as well. Meanwhile, we must stick to the differentiated development. In the next stage, we will focus on the original new drug discovery, moderate and cutting edge projects, and even new target-based new drug discovery, not merely me-too and me-better drugs. We will attach importance to the balance of different fields to avoid homogeneous competition and internal competition. For example we are expecting development in the psychiatric drug, metabolic drug and immunotherapy, not merely anti-tumor drugs. 

Great changes have happened in recent years and two aspects are worth mentioning. First, many leading teams are looking forward to start businesses in Suzhou. Such teams include not only excellent scientists, but also experienced entrepreneurs. They complement to each other, with protected IP, good projects, and good business modes and market awareness; second, many enterprises have grown rapidly in a short time through resource integration and capital operation and thus their value can be embodied soon. For example, Innovent Biologics has reached four innovative biomedicine product development strategic cooperation agreements with Eli Lilly since 2015 and granted the overseas market of innovative products to Eli Lilly. With such agreements, the company obtained US$3.3 billion for the down payment and milestone payments. It has become a model of Chinese innovative drug company utilizing international capital to push the product innovation. For such excellent teams and fast growing enterprises, we need to change our input and service mode. It has been our first concerns of how to help startup enterprises shorten the development time, improve R&D quality and gain more space and time. 

Lu: with rapid growth of SIP, it has been home to enterprises of different ownership and sizes. These enterprises face different problems. How does BioBay play a different role?

Pang: The role we have played has never changed at all. We are very clear that BioBay is a service provider in the industrial system, but our services are being expanded and our capability are strengthening. We provide different services, different policies, venue, land and factory to companies at different stages. Our work can be said changing from easy to difficult, venue and service scope changing from small to large. On the other hand, our focus is to build an ecosystem to bring added value for industries and create value through providing services. 

Suzhou was not an important biomedicine city and had not many “1000-Talent Plan” experts. Five years ago, Suzhou had not a single Grade I new drug. In the past five years, BioBay has attracted 60 experts under the “1000-Talent Plan” and outstanding startup projects. We need to do a lot of service work in many junctures of the project application. For example, how to coordinate with the department of environmental protection. It is a big problem for a startup enterprise and it can hardly get a service provider to address such issues. But it is one of our services. In addition, we also provide some training, including policy implementation and avoiding risks. We regard it our foothold to provide value through services.

At present enterprises in SPI are growing in quantity and size as well. Such changes will put forth new requirements. We are bolder to make investment in good projects and active to push forward key projects. We will make a reasonable development plan from the perspective of talent, technology and others. With a decade of development, BioBay has witnessed establishment of the brand and rising industrial recognition. We are improving our influence through holding a variety of conferences. 

We are also influencing the government through projects, combing and formulating new policies. For example, for CStone Pharmaceuticals we have granted the policy subsidy to the new drug company that uses outsourcing services for the first time. This move enabled the company to successfully settle down in BioBay and the largest A round financing in China. SIP has flexible policies to help local enterprises develop according to the local situation. Moreover, we provide many additional values, mainly embodied in the enterprise appraisal. Many insiders told me that for the projects of the same quality, BioBay’s project appraisal is normally 30% higher than the other places. 

03 Transformation in the new situation: challenges and opportunities

Lu: What thinking and strategy does BioBay will have for the next step?

Pang: as the biomedicine industry is developing very rapidly, BioBay needs to evolve to maintain its competitive advantages. For the next step, our plan can be summarized into 4I Strategy, namely Innovate, Integrate, Invest and Internationalize. We will push forward the strategy from four aspects:

1.Continuous development and update of the brand connotation. The change from the 3P philosophy (professional, practical and passionate) at the commencement of BioBay to today’s 3C philosophy (concentration, collaboration and creation) reflects the transfer of our brand connotation from service-oriented team to the service-oriented community.

2.Structuring platforms through conferences to promote exchanges and interactions of different junctures of the ecological chain. At present BioBay has established a complete conference ecosystem covering early R&D, technological cooperation, investment and financing matching etc. and concentrate and share resources and information needed for the industrial development. 

3.Making the industrial layout with an international perspective and the cutting edge technology. We will introduce different types of enterprises in a planned way, for example medical device, cell therapy, biomedicine and genetic technology etc.; and different therapeutic fields such as anti-tumor, cardiovascular disease and metabolic diseases to improve the industrial ecosystem. 

4.BioBay and SUNGENT Holding Group jointly established the SUNGENT Biological Fund, and raised nearly RMB2 billion in two rounds. It has held shares of Frontline BioVentures, Medtronic Foundation and GoldStone Funds as a limited partner to meet demand of innovation-oriented enterprises on funding in different stages, involve in the industry with investment and accompany the industry to develop. 

Lu: Shanghai, Beijing, Shenzhen and Wuhan are vigorously developing the biological industry. How does Suzhou realize the differentiated development? How to push Suzhou enterprises to the whole country and the world market?

Pang: I believe these five cities have different resources, natural endowment and advantages, and can realize differentiated development. BioBay’s largest advantage concentrates on the facts that it has established the most complete ecosystem from research and development to pilot scale testing, information exchange platform and investment exchange platform. For the following stages from the pilot scale testing platform to production and even sales, we have not have such capability, but we have started to build such capability. From the angle of the government or ourselves, we hope these enterprises realize industrialization, sales and IPO in Suzhou and contribute to the local fiscal revenue. 

As for the extended development of enterprises you mentioned, it is one of the issues we are pondering. Industry is not subject to a region. Though BioBay is a local project, projects, technology, talents and funds are not subject to the regional boundary. So we hope to be more active at the industrial end and embody our value. While we complete tasks of the local government, a more important goal is to contact and establish ties with the best enterprises and realize common development through information exchange or investment or any other possible cooperative ways.

Lu: The industrial development of an area is closely related to the fundamental research capability. What measures SIP has taken on this aspect?

Pang: The fundamental research needs a huge input. As a prefectural level city, Suzhou will face the corresponding regional bottleneck. I believe SIP has tried its best and introduced several research institutes (see above). The fundamental research and concentration of scientific research talents will create a favorable situation for innovation. Though the input and output are disproportionate for a local government, it is a good measure in a long term. For example, the initiation of the Cold Spring Harbour is a move that the local government took to play a role in the fundamental research and discipline development. I think the first tier cities such as Shenzhen, Beijing and Shanghai must mainly develop these fields. The driving force of development for a city is derived from the fundamental sciences. Now all cities are competing for the leading teams. With limited capital, SIP has done its best. Especially in the biomedicine industry, it has been vigorous and introduced large universities and fundamental research institutes.
Lu: What elements do you think will constrain BioBay in the future? Does BioBay plan to “clone” in the neighborhood to address land supply and production space of enterprises and relieve the spatial pressure?

Pang: Now the largest bottleneck we are facing is the land resource. But we hope to solve this issue through integrating resources, and cooperating with private incubators. It will need some time. Suzhou municipal government’s working efficiency and support are not inferior to the other places, enabling BioBay to be competitive compared with industrial parks of other places.

Suzhou is not a capital city and policies on some aspects are limited. For example, can the newly developed drugs be covered by the local medical insurance? The new drug discovered by Betta Pharmaceuticals Co., Ltd. (Zhejiang Province has put Betta’s new drug Icotinib under the coverage of the medical insurance) and antenatal testing of BGI are covered by the medical insurance system through the local policies. In addition, there is also a gap for Suzhou to cover on the local industrial funds size though encouraging involvement of market capital. Then on the fundamental research, Suzhou needs to concentrate forces on research of important economic fields and balance relationship between academic research and industrial application. Finally, for the new drug development platforms, Suzhou is lack of clinical general hospitals and large-scale infrastructure to support industrial development. Suzhou municipal government and SIP are working hard to make improvements. 

Afterword

At present SIP is accelerating its steps towards a China’s leading biomedicine industrial innovation and startup base and technological innovation center, and the biomedicine industry will be one of the three emerging pillar industries of SIP. It is predicted that in the next five years, SIP will be home to 1,500 biomedicine companies. The rapid growth of biomedicine industrial park is closely related to Suzhou municipal government’s foresight, courage, talent strategy, service awareness and market-based operation. It is a miniature of rapid development of biological industry of China.

It is noteworthy that China has not made much trailblazing or revolutionary innovation in the field of biomedicine, and the fundamental research platform is relatively weak. Establishing and forming an effective input mechanism is the key to ensure the industrial development.

The biomedicine industry of China enjoys a promising future. As early as 1998, Jeremy Rifkin, former advisor to president of EU Commission, renowned social critic and best-selling author, predicted the coming of the biotech century (21st century) in his book The Biotech Century and placed a high expectation on China, “The biotech century is probably the century of Chinese. More and more policy makers, business leaders, scholars and NGOs are pinning their hopes on China.”  

Maybe the prediction will come true in the near future.

Source: The Intellectual