Building A Biotech In China

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

Pharmaceutical and biotech companies are looking to emerging markets as the next frontier for drug development, discovery, and perhaps, the next breakthrough. The emerging markets are hot, and the BRIC countries — Brazil, Russia, India, and China — even hotter when it comes to drug development. Though all are important, when you consider the size of China, ranking fourth in geographical size, first in population, and second with regard to gross domestic product (GDP), it is easy to see why pharmaceutical and biotech companies are tripping over themselves to establish a presence there.

Of the top 50 pharmaceutical/biotech companies in the world, not one can claim to having been started in China — yet. Previous models of entering China’s pharmaceutical industry have focused on bringing Western ideas to the East. One company, BeiGene, is taking a slightly different approach — a combination of the best of both worlds and starting from scratch by being founded in China, Beijing to be specific. All of its four founders have worked, lived, or had extensive training in the United States. Two members of the BeiGene management team, Peter Ho, M.D., Ph.D., founder and president, and Coreen Oei, Ph.D., SVP of clinical operations and project management, took time out to explain why they see China as the place to be for launching a new biotech company.

From East To West And Back Again
Ho was born in Taiwan and moved to the United States at the age of 4. He completed his college, graduate, and medical education at Johns Hopkins, Yale, and Harvard. Oei, on the other hand, was born in Singapore and moved to the United States upon completing her Ph.D. at the Institute of Molecular & Cell Biology. Their combined resumes are impressive and include stints with the FDA, the National Cancer Institute (NCI), Howard Hughes Medical Institute, Duke University Medical Center, Dana-Farber Cancer Institute, Novartis, GSK, and J&J. Oei has lived in the States for nearly 20 years. Both are U.S. citizens, which makes you wonder — why would two highly successful former Big Pharma executives jump at the opportunity to start a biotech company halfway around the world, and in a communist country no less? For Ho, the decision to build BeiGene in China was not about the money, but the need.

Why China — Why Now?
It is evident that China has been growing economically. However, many people might not be as aware of other areas in which China has seen dramatic growth. For example, in the past 30 years, China’s cancer death rate has risen by more than 80% and is expected to continue to rise as a result of the high rates of tobacco usage, dietary changes, environmental conditions, and an aging population whose life expectancy has nearly doubled to 71.1 since 1949. According to Ho, many prevalent cancers in China are not as common in the United States or Western Europe, and as such, don’t get the same attention. Ho has held an interest in oncology drug discovery his entire career, having completed a fellowship at the Dana-Farber Cancer Institute, as well as having served as a senior investigator at the National Cancer Institute. But his interest in treating cancer is personal. “One of the reasons I went into the whole area of drug discovery/drug development was when I was in medical school, my mom was diagnosed with breast cancer. So, I witnessed what a loved one goes through when they are getting chemotherapy treatments,” he states. Later, Ho’s mother developed a second cancer, nasopharyngeal carcinoma, which is fairly common in southeast China and very uncommon in the United States. It was difficult to find experienced physicians to treat her. “It spurred me to try to do something about it,” says Ho.

In addition to the unmet medical need in China, both Ho and Oei are driven by the excitement of the multiple challenges inherent in building a start-up organization. There is the challenge of creating a small, nimble organization that, by virtue of not having all of the resources of a Big Pharma, must quickly and efficiently conduct the critical experiments, both in the lab and in the clinic, to determine which drug candidates have the greatest potential. There is the challenge of raising the external funding, hence external validation, to support their vision. And finally, there is the challenge of discovering and developing new drugs for China’s rising cancer patient population. Ho sees China as being much more fertile for putting these elements together for building a biotech versus going someplace else where the landscape is not as mature, or in the case of the United States, overly mature.

For Oei, there was yet another reason for her to leave her senior position at GSK — the need to be reenergized. Prior to joining BeiGene, she experienced feelings of “corporate grief” — where she saw many of her colleagues who were previously excited about their jobs in Big Pharma just going through the motions at work due to the upheaval and changes in the pharmaceutical industry. Even though her team had recently delivered a successful proof-of-concept study for a compound that has since transitioned to late-stage development, something still seemed to be missing. “When Peter asked me to be part of starting an oncology biotech company in China, I was excited at the opportunity to work with him again,” explains Oei. (Having previously worked with Ho at GSK, she had a great deal of trust and respect for him as both a friend and colleague.)

If You Want To Be In The Game, Go Where The Action Is
There is another reason why it makes sense to build a biotech in China. Watching a sporting event on television is very different from seeing it live, and neither can compare to the athlete’s experience of being down on the field competing. If you want to truly be in the game, you need to be where the action is. Technology cannot replace the importance of being on-site when conducting a clinical trial. Ho explains, “If I’m sitting in the United States and managing global development, what goes on in China or Asia represents a small fraction of my daily demands.” Ho feels it is difficult for anyone to give a clinical trial the same level of attention when directing it from a distance as compared with being in the country where the trial is taking place. By being in country, Ho believes BeiGene can do a better job conducting clinical trials in China. “Being there, physically, on the ground with our staff, brings us closer to the investigators who are actually running the trial,” he clarifies. This benefits the team by bringing them closer to the data, which improves communication between members of the project team and clinical persons, allowing for better and faster interpretation of the data and enhancing the team’s ability to operationalize the results. Another benefit of having the company truly operational in the country where the trial is being conducted is greater clinical trial participation. “One measure of success is sample collection,” explains Ho. “In the short time we have been in existence in China, we have already collected more than 100 samples from patients through hospital collaborations. That’s a lot more than I was able to do in prior settings while sitting in the United States,” he states matter-of-factly.

Language Skills Matter But Not A Deal-Breaker
Many of the employees who are working at BeiGene, such as Oei, were handpicked by Ho or other members of the leadership team, based on having previously worked with them. Ho advises that if you are going to ask people to join your team and make great sacrifices, such as moving halfway around the world, be sure to put procedures in place to help them through the transition process. At BeiGene most of the employees are “returnees,” while around 15% could be considered expatriates from other countries. By keeping the percentage of employees who lack native language and cultural experiences fairly low (20% to 25%), there are plenty of folks who can help on both a personal and professional level (e.g. how to set up a bank account, how to get a credit card in China). “The business of the company internally, high-level meetings, and so forth, is conducted in English,” explains Ho. “But, a lot of the day-to-day conversations, especially at the bench scientist level, and certainly when we go out to work with government agencies or with academic investigators, is conducted in Chinese. It is essential for someone to have strong language abilities.” Ho also has found the language skills key to collaborating with the government, local medical institutions, and funding and regulatory agencies, such as the SFDA — China’s equivalent of the FDA. “However, if we can get someone who has really unique capabilities and is very strong in an area, but doesn’t have the language skills, then we’ll try to work around that,” he confides.

A Growing, Talented Staff
By taking the bold initiative to create a biotech based in China, combining Eastern culture with Western training, BeiGene looks to break new ground in Chinese drug discovery. The company already has been successful in the talent acquisition department, growing to more than 140 employees who have worked for many of the top Big Pharma companies, including Bayer, Pfizer, BMS, GSK, J&J, Lilly, Merck, and Novartis. Being based in China has demonstrated BeiGene’s commitment to quality drug discovery. “As a sponsor in China, we have a big stake in the game to make sure the product that is prepared for our use and the clinical trial material is up to standard,” Ho concludes.
SIDEBAR What was the biggest surprise about working in China?
Oei: Beijing is a city with 20 million people and 5 million cars. This means that traffic congestion is very challenging at most times of the day and not just during the rush hour as we know it in the United States. I have also been very surprised by the prevalence of stores that carry luxury branded goods in many of the malls in Beijing.

Ho: No question that traffic in Beijing has to be experienced to be believed. It is far worse than any in the world that I have ever experienced. New York and Los Angeles cannot hold a candle to traffic in Beijing. Also, though not a surprise, it remains a sobering reminder that the pace of modernization in China is unlike any elsewhere. This affects all aspects of everyday life including architecture, urban infrastructure, diet, fashion, technology, jobs, and recreation.

What hobbies do you have that have been altered by living in China?
Ho: My primary recreation is running. While I enjoy running outdoors in the United States, the traffic, urban environment, and air quality in Beijing are not the most hospitable for long-distance running. So, I have learned to run 10 and even 12 miles on the treadmill while watching repeated episodes on CNN or Discovery Channel.

Oei: I love to bike and walk outdoors in North Carolina where there are plenty of outdoor spaces and parks close to where I live. In Beijing, it has been difficult to be outdoors a lot, but we are very fortunate to live in an apartment complex with a well-equipped gym. So I am able to adjust my workout by using the treadmill and exercise bike.