Well established as Asia’s leading financial services and trading hub, Hong Kong is now looking to better position itself as a centre for biotechnology investment and start-ups. However, in a risk-averse investment environment with strong basic research but little tradition of translational science, such a transformation will take time, capital, expertise, supportive policies, infrastructure investments, and a great deal of international collaboration.
As laid out in last year’s Hong Kong Innovation and Technology Development Blueprint, the city is aiming to ramp up its footprint across upstream basic research, midstream technology transfer, and downstream industrial development in a variety of industries. The Blueprint’s author, Hong Kong Secretary for Innovation, Technology and Industry Dong SUN, feels that the enabling environment for biotechs has made great progress in recent years.
The potential is clear: the population of the Greater Bay Area alone is 86 million, while Hong Kong is an innovation hotspot for biotech development with good universities, good people, and many good innovation research outcomes
Dong SUN, Secretary for Innovation, Technology and Industry
“The Hong Kong government has done a good job so far in coordinating biotech development, including through the Science Park, which is a nurturing environment for start-ups and biotechs. Building on this – and our universities’ globally competitive research – Hong Kong is now the world’s second-largest fundraising hub for biotech companies, behind only Boston. We are therefore and Asia’s largest such hub and have raised more than HKD 116 billion.
“Many large pharmaceutical companies have already contacted us to learn more about Hong Kong. The potential is clear: the population of the Greater Bay Area [the megalopolis bringing together nine cities in mainland China’s Guangdong province with the special administrative regions of Hong Kong and Macau – Ed.] alone is 86 million, while Hong Kong is an innovation hotspot for biotech development with good universities, good people, and many good innovation research outcomes.
“Continuing to build a biotech ecosystem, as cities such as Boston have done before us, will be critical. While there may not yet be a big international Hong Kong pharma company, we have so many smaller companies with strong innovation outcomes which Big Pharma is very interested in collaborating with. This is coupled with the big mainland companies which see Hong Kong as an important node in their international expansion strategies.”
Drawing on his own experience as co-founder of Prenetics and Cellomics, biotech companies based on technologies developed in his laboratory at City University of Hong Kong (CityU), Michael Yang feels that a bolstered funding infrastructure is vital to securing Hong Kong’s future as a biotech hub. Yang, now CityU’s Senior Vice-President (Innovation and Enterprise) oversees the ‘HK Tech 300‘, the largest university-based entrepreneurship programme in Asia, which has so far allocated HKD 600 million (USD 77 million) to help students and young graduates take their research from the university and create start-ups.
We need to build an entire ecosystem, and this will take time
Michael Yang, CityU
“The biotech ecosystem in Hong Kong today is a lot better than it was a few years ago. In Hong Kong we have good basic research and have several hundred professors, along with thousands of PhD students, working in this area across the six Hong Kong universities. This, coupled with our financial strength, should put us in a good position. Having said that, life science investments have a long lifecycle and must be incubated correctly before reaching commercialisation, and this is where we come in.
“Furthermore, in recent years we have seen the introduction of Chapter 18A which has opened the window for biotech companies to go public and raise funds. About 60 companies have been listed since this Chapter 18A was implemented, but unfortunately only one is from Hong Kong; all the rest are from mainland China. Therefore, we need to create more biotech ventures and incubate these companies until they reach the commercial stage.
Yang continues, “When you look at this journey between a biotech start-up and a public company, the ability to attract funds is critical. Fundraising is a global competition. Investors are not looking at just their local markets. If there’s true innovation, a company will be able to attract funding in Hong Kong. In addition, the Hong Kong SAR government is also working very hard to attract MNCs to bring their R&D and manufacturing operations here, this would over time attract a larger talent pool that would have the knowledge to work in biotech and maybe establish and grow their own companies. We need to build an entire ecosystem, and this will take time. You must build everything from the bottom up with a strong foundation. The most important thing is to just do it.”
Serial tech entrepreneur and investor Duncan Chiu, now a Member of Hong Kong’s Legislative Council (LegCo) for the ‘Technology and Innovation Functional Constituency’, adds that an enabling digital infrastructure will be crucial to fostering more biotech success stories in the city.
If Hong Kong wants to be a biotech hub and we want to get all of these companies to come to Hong Kong, we need to improve our digital infrastructure
Duncan Chiu, LegCo
“There are a lot of life science experts in Hong Kong,” he begins. “We have some good teams and professors who work on research in universities, but I think a lot of them have always worked on their own. Universities do not have much capital to invest, especially if they are working on big data, life science, new materials, etc., which can be quite expensive. If they do not have sufficient computing resources in universities, they can only rely on trial runs on third-party supercomputers. If Hong Kong wants to be a biotech hub and we want to get all of these companies to come to Hong Kong, we need to improve our digital infrastructure.
Chiu adds, “The government should invest in digital infrastructure and computing power and provide the resources at a low cost so that overseas scientific teams can come to Hong Kong and prove their solutions, methods, and scientific findings. That is why I have been talking extensively about proposing the establishment of supercomputing capabilities in Hong Kong. In the Mainland, this is actually quite common. A lot of Mainland cities have supercomputing centres, and there are nine in China already.”
Serial Entrepreneurs Needed
Another personality who can bring his own experiences to bear on what is needed to bring medical innovation all the way to market is Dennis Lo. A groundbreaking research scientist noted for his work in non-invasive blood-based diagnoses, Professor Lo’s work was first commercialised via the company Cirina – later acquired by GRAIL. Lo, who currently holds several positions at the Chinese University of Hong Kong (CUHK), foregrounds the importance of “serial entrepreneurs.”
The Greater Bay Area needs more serial entrepreneurs that build experience and can learn from their past mistakes
Dennis Lo, CUHK
“I believe the Greater Bay Area needs more serial entrepreneurs that build experience and can learn from their past mistakes. These people can then pass their knowledge on to their staff and teach the younger generation how to build a company. Hong Kong has many good scientists, but it is not easy to find great scientists with great business minds. However, this is what is sometimes required, more than just an innovative idea.
“The government has invested a lot of money in the science park and launched many schemes. One such scheme is the InnoHK Initiative in which HKD 10 billion has been used to fund 28 laboratories, with half of them in the healthcare area. Overall, they are giving more money than ever before, but if you look at the percentage of GDP being dedicated towards research compared to other jurisdictions, there is still a lot of room to grow. I would say to any company, or researcher that Hong Kong is making a strong effort to build its technology ecosystem and it is an exciting place to do business and invest.”