Source:
https://scmp.com/business/companies/article/3084449/hong-kong-has-research-talent-and-great-stock-market-government
Business/ Companies

Hong Kong has research talent and great stock market, but government help is needed to ease local biotech industry’s growth constraints, panel hears

  • There is a gap between the academic and commercial community in Hong Kong, says HKU chief innovation officer
  • Young Hong Kong biotechnology start-ups face funding difficulties: Phase Scientific International
From left, Stanley Sy Ming-yiu, the CEO of Sanomics, Dr Yiwu He, chief innovation officer at University of Hong Kong, Ricky Chiu Yin-to, the CEO of Phase Scientific and the SCMP’s senior business reporter, Eric Ng, at the paper’s offices in Causeway Bay on Thursday. SCMP is hosting its China Conference. Photo: May Tse

Hong Kong’s small biotechnology industry is limited by an undeveloped manufacturing base and the lack of indigenous new drugs regulatory systems, even as the city hosts the world’s second-largest stock listing market for such companies.

The sector needs more government support to develop, because despite having world-class university research facilities and talent, there is a gap between the academic and commercial community. This is down to the absence of large pharmaceutical companies, which can act as anchors in Hong Kong’s biotechnology ecosystem, He Yiwu, chief innovation officer of the University of Hong Kong (HKU), told a panel discussion held on Thursday as part of the China Conference, which is being hosted by the South China Morning Post.

“[This] creates a problem, because when researchers have an interesting discovery, they cannot immediately find a well-known, well-established and well-resourced company to share and test their ideas in a commercial setting,” He said.

Citing the university’s experience of developing a vaccine candidate for the novel coronavirus, he said it was in a leading position early on in the global race, and was one of three universities in the world to have won funding support from the Coalition for Epidemic Preparedness Innovations, a foundation for infectious disease vaccine development.

Not only does HKU host one of China’s “national key laboratories for emerging infectious diseases”, its researchers also have experience developing vaccines for the severe acute respiratory syndrome (Sars) and the Middle East respiratory syndrome (Mers), he said.

But over a month later, it is still waiting for permission from mainland Chinese authorities to send vaccine samples to a manufacturer across the border, so that the project can proceed to the next step of development.

“When the industry is talking about shortening the vaccine development time from two to four years to nine to 12 months, one month is a lot of time to lose,” he said, adding that researchers also faced red tape when it came to importing mice or rabbits for animal trials. “There are real problems with Hong Kong being an isolated island in biotech – that creates not only supply issues but also partnership issues.”

Young Hong Kong biotechnology start-ups also face funding difficulties, said panellist Ricky Chiu Yin-to, chairman of Hong Kong-based Phase Scientific International, which has a technology that improves the accuracy of biological diagnostic tests by concentrating and purifying target molecules.

“Hong Kong’s traditional industries are real estate and services. A lot of investors and high-net-worth individuals do not have much of an idea about what biotech means, and what are the industry’s returns,” he said.

The city’s bourse has attracted 16 biotechnology start-ups – predominantly mainland Chinese drug developers – to raise funds after a rule change two years ago allowed drug and medical device developers without profits or even revenues to list. It now trails only the Nasdaq for biotechnology fundraising.

Hong Kong’s small domestic market, undeveloped pharmaceutical manufacturing infrastructure and the lack of an indigenous new drugs approval body are also holding back the industry’s growth, said Stanley Sy Ming-yiu, chief executive of Hong Kong Science Park-based Sanomics, an oncology and parental genetic tests provider.

“Hong Kong is a good place for proof-of-concept and technology acceleration due to easy market access, while people are willing to spend on health care and doctors are willing to try new products … but ultimately … the investor knows that the [clinical] trials will not happen in Hong Kong, so on the infrastructure and manufacturing side, there is no incentive to build here,” he said.

HKU’s He said if governments on both sides of the border could work together to allow freer movement of people and biological materials, they would solve much of the growth constraints facing Hong Kong’s biotechnology companies.

A “Covid-19 [vaccine] development alliance” meeting scheduled for Friday will be attended by representatives from HKU, Tsinghua University, Fudan University and China National Biotec Group, the country’s dominant vaccines developer, and will facilitate such discussions, he said.

More cooperation locally is also needed for the industry’s development to be sustainable, He said. “What we need in Hong Kong is for the government, the universities and the industry to work together to build up a few big success stories,” he said. “Then we will get the reputation … more funding, and then [the industry’s growth] will become sustainable,” he added.