Transcript Our Biotech/Pharma BOOM Dr H M Pang Senior consultant, HK UST Technology transfer

Our Biotech/Pharma BOOM
Dr H M Pang
Senior consultant, HK UST
Technology transfer
June 2005, Shanghai,PRC
Booming statistics-West
• 500 biotech companies employing >50K
people, mostly established over the last 5
years
• genetically engineered products launched
• >150 in clinical stages, more in preclinical
• Many INDs filed since 1999 of bio origin
• Sales increased by ~30%, profit 20%
Biotech boom- China
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Over 4 billion sales in 2004
Companies listing
Biopharma generics
A few new drugs ??
Drug spending increased 6 fold in 15 years
5th ranking in 2010
2nd ranking in 2020
…….. Lots of headache for now 
Biotech boom: Asia
• Singapore’s massive investment getting
results: MNC head quarters, R&D, export
• Taiwan’s gradual strengthening of its bio
tech on its strong pharma infra structure
• Korea excellence in stem cell research
• Hong Kong : direction unclear, good Unis.
Drivers of growth
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Growing economy & healthcare expense
Huge and aging population
Internal market>>critical mass for drug
Maturing consumers
Hunger for new drugs
Cost advantages, + skilled work force
Returnees with excellent expertise,& drive
Excellent universities
• Post genomic applications
• Regulatory, ethical and legal considerations: stem cell
Government commitment
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Science parks and clusters
Clear priority and focus areas
Technology innovation, and incentives
Respect for IP ? ….improving 
Modernizing SFDA
Quality of science, talent pool
Industrial players, and mega players
Funding : govt, VC, and other industries
Industry sub sectors
• Bio pharma: DDS, gene therapy, biochips,
diagnostics
• TCM, and functional food
• Agro biotech and transgenic animals
• Stem cells, tissue engineering, and cloning
• Plant bio
• Medical device and bio reagents
Focus areas
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DDS / chemical drugs
Stem cell and clinical applications
Bio protein drugs: recombinant technology
Medical devices, and genetic screening
GMP upgrade
GLP/GCP upgrade
APIs
Achievements
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Centre for r&D, pre/clinical studies (dog)
Contract r&D centre for MNC’s & small cos.
Creation of clusters and science parks
Stem cell banks and application
Approval of engineered human tissue
mAB facility
Export of biotech to India and Cuba
API and finish dosages for export
Cruel reality: the truth
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Few really success stories
No world class players, small sales in global terms
Below standard products
Me-too products only
Lack significant VCs
No window in equity market
General depression of the pharma industry
FDA under pressure from consumers and industry
Virtual companies need short term success to justify
survival, coming to China
• Major failures of big companies:FE and 999
Success stories: ???
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Many biotech companies making losses
Few break even or small profit
No real players, no exciting news
No real export to sophisticated market
Why????????????????????????????
Gross underestimation of the Drug
Development cycle, not ready for World
Development hurdles
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No real significant stars
Fierce competition, price wars, tenders
Formulary control ( Good time over , soon )
IP issues still not clear
Poor healthcare infrastructure to justify investment and
return, very few VCs
Short, cheap, and fast philosophy prevails
Lack ROBUSTNESS: quality and performance
Lack INNOVATION
Not SUSTAINABLE
Insignificance in world market sales
Social out cry for change in healthcare provision
Part 2: INNOVATION:
new fishes
The HK Science Park Biotech
initiatives ( attempt )
HKSTP bio road map
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Biomedical research output audit
SWOT analysis of criteria for
Cluster formation
Total technology management
Seasoned executives & entrepreneurs
Others: industry, regulatory, funding
Technology transfer:
Biomedical research in HKSAR
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Basic questions:
1. Innovation/knowledge: tradable?
2. Tech transfer: definition and skills?
3. Commercialization capability?
4. Future?
Dr H M Pang, HKUST, March16,05
Value from Cluster Formation
Knowledge Creation
Technology Transfer
Patents &
Licences
Universities &
Research Institutions
Public & Private
Funding
Proof of Concept Business Planning
Testing
Incubation/
Research Parks
Venture Capital
Conception Formation
Job Creation
Industry R & D
Regulatory
Environment
Industry
Partnerships
Maturity
M&A Activity
Economics
of Scale
Product Pipeline
Clusters & Networks
Growth
Collaboration/
Partnerships
Clinical Trials
Regulatory
Approval
IPOs /gazelles
Labour Market
Commercialisation
Biomedical Science Strength
2000
B asic papers per y ear (retained)
MV
1500
CB
OX
1000
EH
HK
500
0
1997
1998
% P IC 1
1999
2000
% P IC 2
2001
2002
% P IC 3
% P IC 4
CB
OX
EH
MV
HK
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Hong Kong and Mainland China
15 0 0
12 5 0
10 0 0
750
500
250
0
UHK
CHU
BEI
BEI Beijing University
UST
FUD
THB
QMH
PEK
HPU
PWH SY S
SHA
FUD Fudan University, Shanghai
SJT
GUZ Guangzhou University
SYS
MMG First Military Medical College, Guangzhou THB
PEK Peking Union Medical College
ZSG
Z SG
MMG
HBU
CUH
SJT
GUZ
SHA
Shantou University
Shanghai Jiao Tong University
Sun Yat Sen University, Guangzhou
Tsing Hua University, Beijing
Zhongshan University, Guangzhou
Hong Kong and Mainland China
350
300
P apers per y ear
UHK
250
CHU
200
BE I
150
FUD
100
THB
50
0
1997
1998
1999
% P IC 1
2000
% PIC 2
2001
2002
% P IC 3
% PIC 4
UST
UHK
CHU
B EI
SY S
FUD
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Basic Conditions for a Biotech Cluster
Government
Support
Research to Business Food Chain
Upstream
Research Funding
Excellence
in Research
Human Resources
Build-in Incentives
Entrepreneurship
and Creativity
Academic Institutions
Efficient
Tech Transfer
Midstream
Industry and Capital Market
Downstream
General Business
Conditions
Experienced
Management
Sufficient
Risk Capital
Biotech Cluster
Formation
Excellence in
Business Plans
Summary of Analysis
General conditions for high-tech
Biomedical research
University trained resources
Attitudes to commercialisation
Human resources abroad
Technology transfer
Biotech industry and business exec.
Private venture capital for biotech
Recommendations
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Organize a cluster
Introduce TTM
Proper funding : pre seed fund
Cooperation between Industry & Research
Regional cooperation
Further exploit CEPA, and clinical trial
Stimulate research
Draw up road map for implementation
Recommendation 2
Improve Total Technology Management
G&A
Finance
IT
Administration
Embedded
Technology Officer
Commercial Potential
Entrepreneurial Courses
Board of Directors
Board of Directors
CEO
CEO
Marketing
Technology Database
Web-site portal
Promotion
Embedded
Technology Officer
Commercial Potential
Entrepreneurial Courses
Commercial Projects
Project Managers
Embedded
Technology Officer
Commercial Potential
Entrepreneurial Courses
Special Support
Market Analysis
Legal
Intellectual Property Protection
Embedded
Technology Officer
Commercial Potential
Entrepreneurial Courses
Embedded
Technology Officer
Commercial Potential
Entrepreneurial Courses
Pre-seed/Seed Fund
Embedded
Technology Officer
Commercial Potential
Entrepreneurial Courses
Technology transfer
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Answers to questions:
1. Innovation/knowledge: yes. Tradable?
2. Tech transfer: to be re-modeled.
3. Commercialization: can be done!
4. Future: lets TALK………
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Dr H M Pang , HKUST, March16,05
Part 3: commercialization
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Find the fish
Catch the fish, irrespective of size
Grow that fish: live, multiply, and more
Return in the shortest time, cost; quick $$
Lack long term vision, diligence, and often
ethics and professionalism
• Result= poor robustness, quality and
performance
Elements of the Product
Development Process
Review
Product
Launch
Phase III
Commit to Prod.
Dev.to Commit to
Phase III
Commit to
File &
Launch
FTIH to Commit
to Product Dev.
Commit to
Phase III
Commit to
Product
Dev
Commit to
Candidate to
FTIH
FTIH
Lead to
Candidate
R&D Milestones
Commit to
Candidate
Product Development Process
File and Launch
Lifecycle
Management
Therapeutic Strategy
Assess
Developability
Key Product
Development
Milestones
and Activities
Drug Substance
Campaign
Drug Product
Campaign
DS Stability
Prelim. Form
for Tox
Develop FTIH Formulation
Confirm Physical Form
PPD Team
Established
Select Version
and
Physical Form
NPS leader
assigned
Support
IND/CTX
activities
Lock Final
Isolation
of DS
Lock final
Formulation
and process
NPS Team
Formed
Sourcing
Decision
End of PII
meeting
Initiate
Tech
Transfer
Commercial
image &
pack defined
Initiate
NDA/MAA
Stability
Provide
Input to
MAA/NDA
Scale Up
at Manf.
Site
Review
Gate 8
Gate 7
Gate 6
Respond to
Regulatory
Questions
PPD 6
Gate 5
Select Final
Route of
Manufacture
Development
PPD 5b
Gate 4
Review
PPD 5a
PPD 1
Physical Product
Development Team
Gate 3
New
PPD 4
Gate 2
Review
PPD 3
Gate 1
Review
PPD 2
Product Supply
Process
Review
Drug Discovery
Asset Management
Safety
Board
Respond to
Regulatory
Questions
Validation
batches
Complete
Prepare
for PAI
Analysis of Key Batches of Drug Substance and Drug Product and Process Stretching
50g prepared
by Med Chem
300g for
SA and
PD
28 day Tox
Supplies
Phase 1
Supplies
Phase 1
Supplies
DS for tox and
formulation
development
Phase 2
Supplies
Phase 2a
Supplies
Onco and 12
month tox
supplies
Phase 2B
Supplies
Phase 3
Supplies
DS for Q
batches and
stability
Phase 3 and
Stability
Batches
Validation
Batches
Commercial
Batches
Ongoing
Phase 3
Supplies
Validation
Batches
Commercial
Scale Batches
Business
Acceptance
Sign off
Total Tech Management:TTM
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Complex, lengthy process
Resource/talent intensive, integrated skills
Need pharma industry expertise
IP and legal management
Regulatory and clinical component
Market intelligence / post marketing skills
Supply and logistics management
Financial skills
Critical mass
The 2nd pharma revolution
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New products, technology and services
New market, customers, payment terms
New sales and marketing approaches
New team and culture
Entry into new horizon, with good players
Go international
Sustainable model
New challenges
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Survival, M&A, consolidation
Formulary, Rx, and price control
IP and regulatory: who stole my cream
Product and technology
Core competency
Focus
sustainability
Dancing with capital, to finance upgrade
New business models
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Integrated company or core strength
Work with universities and institutions
Work with virtual co, contract out research
Collaboration with the west, virtual cos.
Collaboration with the West, medium size
MNCs
Develop new drugs, at huge cost / risks
Cases : a Zhangjiang co.
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Set up 1996
HK Gem board 2002
One diagnostic launched, contract selling
Quality issue, broke contract
Robustness???
Money being spent, no real revenue
Huge pipe line hype
Lack real execution plan
Case 2: a TCM company, HK
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Run by famous professor from Canada
Gem listing in HK 2001
Lack operational and business acumen
Unreal forecast, lack execution experience
Picked gingko for formulation improvement
Burnt out and sold in 2004
Case 3: a local medium pharma
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800M Yuan sales
Vision to become top 5 in 10 years
International involvement, courted with
Many international companies from India and Europe
Product introduction slow,
Alliance never realized
Failed to capture chances from capital market
Lack clear mid term strategy, team and culture
Fire fight in current hostile market
Uncertainty with future, lack sense of urgency / fear
Just received substantial investment for growth
Towards a potential ‘world class’ company
Case 4: stem cell in South
• A few cases as basis for business plan
• No clear strategy, direction, IP, team and
financial models. Doing everything.
• Obtained some finance , but insufficient for
the expected burnt rate
• Sustainability?
Case 5: biochip diagnostics
• Multi genetic assay for cancer
• Well received by investors, and supported
by insurance companies
• Company run by non business
professionals, and scientist engage in
more than one company
• Short term apparent success
• Issues: robustness, validation and
marketing
Key success factors
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Product: quality, robustness, IP
Market: user friendly, entry barrier
Team: integrated skills, international
Finance: good start up, and profit/loss
Strategic investors
Execution: timely, and correctly
Sustainable business model
Sustainable company
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Not too dependent on Allah ( GOD )
Ready to face competition
Continuous favorable performance ( no blip)
Not affected by cycles
Good pipeline portfolio
Not dependent on one Hero, holistic & governance
Evergreen, stable, long term team , execution capability
Anticipation and Management of change
International link
Tomorrow driven
Thank you
[email protected]