China's Biotech Boom – One Person's Answer To Corporate Grief
By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL
By Rob Wright
A couple of Fridays ago, I got a call from an executive who left Big Pharma for less money to join BeiGene, a China-based biotech company. This person described being re-energized as a result of the move. She told me many of her former colleagues are going through the motions at their jobs, waiting for the next big layoff. According to her, many people at her previous employer have lost their enthusiasm for the work and are experiencing “corporate grief.” This was a new term for me, so I decided to do some research.
The Five Stages
Apparently, corporate grief is real, and it has the same five stages of death and dying – denial, anger, bargaining, depression, and acceptance. In the case of my friend, acceptance translated into resignation. This seems to be the case for many of the management team members listed on BeiGene’s website. John Oyler, CEO and founder of BeiGene, has been grabbing top talent from companies like J&J, GSK, Merck, Lilly, Biogen Idec, BMS, Bayer, and Novartis. Why the sudden interest in jumping ship from billion-dollar blue chips to a small startup in China not yet producing revenue? Because the future of biotech looks bright in China, and the government is willing to back it up with a significant financial investment .
China’s Burgeoning Biotech Plan
Reports indicate Chinese officials are willing to put their money where their biotech is, laying out an ambitious plan to generate over a million new biotech jobs before the end of 2015. How? By making biotechnology an economic pillar of Chinese society and funding it with $308 billion. U.S. citizens thought the “Cash for Clunkers” government program designed to stimulate the economy was a big spend at $4 billion — a little over 1% of what China intends to spend on biopharmacy, bioengineering, bio-agriculture, and biomanufacturing. In addition to job creation, the plan intends to extend their people’s life expectancies by one year, reduce infant mortality by 12%, and reduce the most common pollutant emissions by 10%. Since 2000, public and private investments in the United States pharma and biotech industries has been nearly a trillion dollars and produced an average of 21 new drugs a year. Will China do better than the United States? My prediction is yes, and here’s why.
Why It Will Work
China has the largest standing army in the world with more than 2.3 million members and is not pouring trillions of dollars in military campaigns like the United States is doing in both Afghanistan and Iraq. The 2010 U.S. military budget was $685 billion, compared to China’s of $77.9 billion. Acts of terrorism do occur in China. However, China is able to focus most of its military might at a much lower cost to quash these domestic threats. As a result, China can truly focus on economic growth. China has already become the world largest producer of both steel and concrete, so why not drugs? China has a cash surplus and does not have an ingrained way of how to do things in biotechnology. This bodes well for fresh approaches to R&D, with a greater focus on the development component. For a comparable analogy, look back to Japan surpassing the U.S. automobile industry. In my opinion, this bold initiative has the potential to galvanize and unite China, similar to how John F. Kennedy’s plan to land an American on the moon did for the United States. According to my friend who made the jump to China’ biotech, U.S. companies like Merck (MRK) and Pfizer (PFE) are eager to partner. This is a much different approach than that taken by U.S. automakers with Japan, and as such, provides for the potential of a different outcome for U.S. based biotech. If you can’t beat ‘em, join ‘em.
For more info on China's biotech industry, check out the article "Will China Lose Its Cost- Competitiveness In Pharma Manufacturing By 2015?"