The meteoric growth of the pharmaceutical industry in China in recent years has seen a host of top Chinese talent return home from studying and working overseas to establish their own firms. Dubbed ‘Sea Turtles’ (‘海龟’ haigui), as ‘海’ (hai) means ‘ocean’ in Chinese and ‘龟’ (gui) is a homonym of ‘归’ (gui), meaning ‘to return’, these experienced and savvy entrepreneurs are returning to take advantage of the copious opportunities the China market has to offer and make a difference in their home country.
Jiang Lei & Shou Jianyong, Ennovabio
Dr Jiang Lei and Dr Shou Jianyong first met while working at Novartis in 2009, before co-founding biotech EnnovaBio in 2016.
We are a Chinese company, so we really want to benefit Chinese patients and meet unmet medical needs in China
Shou Jianyong outlines the rationale behind establishing the company in China. “On the big-picture level, we are a Chinese company, so we really want to benefit Chinese patients and meet unmet medical needs in China. Otherwise, why would we start a company in China?”
He continues, “Secondly, working on China-prevalent diseases will also support our company’s business development. The attrition rate for biotech projects is so high and the human proof-of-concept (POC) stage is really fundamental. Strategically, we want our projects to achieve human POC rapidly in China. Since we focus on the most significant unmet medical needs domestically, that would motivate local stakeholders – government, physicians and patients – to move quickly and work with us.”
Jiang Lei adds, “The hype [around Chinese biopharma] has created a great opportunity for companies like ours. We should find a way to seize this opportunity. How can we build our strengths and capabilities to capitalize on this boom? We do not want to jump on the bandwagon and follow what others are doing. We need to analyze what we are good at, what we can do, and how we can contribute to this entire process.”
Jiang does, however, caution that, “Amidst all these opportunities, we have to remain calm. Regardless of the hype, the fundamental business has not changed. Drug discovery remains very challenging and risky. We have to be realistic that the success rate is low and there are many roadblocks ahead of us. The hype will go down eventually. Ultimately, you win through your product(s).”
Shun Luo, Thousand Oaks Biopharmaceuticals
Dr Shun Luo returned to China in 2010 after more than 30 years working in the US to establish Jianshun Biosciences (JSB). Subsequently, Luo set up a second firm, CDMO Thousand Oaks Biopharmaceuticals, in 2017
At the end of 2010 … I could see the transformation of the Chinese economy from a labour- and natural resources-intensive economy to a more high-tech economy
“The decision to return to China was the result of the combination of the development of the Chinese pharmaceutical industry as well as my personal industry experience,” says Luo.
“I returned to China from the US at the end of 2010 because I could see the transformation of the Chinese economy from a labour- and natural resources-intensive economy to a more high-tech economy focusing on areas like IT, AI and of course, biotech.”
Against this booming backdrop and leveraging his US experience, Luo spotted a gap in the China market. “I spent 25 years working in biologics – starting from 1993 – with Serono, Genentech, and Amgen, to name just a few,” he states. “My specialty was in cell culture technology, particularly media development and media commercialization, and I became very familiar with both the technical and business processes at a reasonably high level. When I returned to China in 2010, this was an area that the Chinese biopharma lacked. Up until then, serum-free media in China was completely supplied by American life sciences companies, but the quality and efficacy of those media were not as strong as those developed within biopharma companies themselves. Having come from biopharma companies like Genentech and Amgen, I was confident that I could bring better solutions in serum-free media to the Chinese industry.”
With a slew of regulatory upgrades post-2015 and a subsequent boom in the number of Chinese biotechs, Luo saw an opportunity to create a contract manufacturing organization to service these small firms. “The whole industry needed to be more efficient,” he reminisces. “Realistically, not every company will survive all the way from start-up to commercialization. They need a lot of help and support along the way.”
“Today, very few small molecules are actually manufactured by the pharma companies themselves; they are all outsourced to contract manufacturers. This will happen to biologics as well – and is already happening. Commercial manufacturing will become more highly specialized, leaving biotech companies to focus on drug discovery and development…. Therefore, I decided to establish Thousand Oaks Biopharmaceutical in March 2017 focusing solely on CMC bio-manufacturing.”
Weidong Zhong, Terns Pharmaceuticals
Dr Weidong Zhong spent over 20 years working in drug discovery at household pharma names including Novartis, Gilead and Schering-Plough. In 2017, he established his own biotech, Terns Pharmaceuticals, which develops innovative drugs for NASH and liver disease.
I felt I could do more and have more impact by building and running a small, nimble and highly efficient organization to discover and develop innovative medicines, especially to help patients in the underserved markets such as China
Zhong explains that, “After over two decades of working at big biopharmaceutical companies, mainly overseeing discovery and early-stage development of drugs for virology and liver disease, I started thinking about setting up my own biotech start-up. I felt I could do more and have more impact by building and running a small, nimble and highly efficient organization to discover and develop innovative medicines, especially to help patients in the underserved markets such as China.”
He adds, “In large corporations, it can be such an uphill battle sometimes to get things done because of the bureaucratic processes and risk-averse mindset. Moreover, inside such big machines, individuals’ talents may not necessarily be utilized to the maximum.”
Although the initial funding for Terns was found in the US, Zhong is keen to highlight that the company is firmly China-focused. “Fortunately, I met investors that put their trust in me, supported my vision and helped me and my co-founders kick off the company in early 2017, with operations first in the Bay Area, and shortly after in Shanghai. Our goal was, and still is, to bridge global drug discovery innovation with accelerated clinical development in China, to bring high-quality, innovative drugs to patents with NASH and liver disease in China as quickly as possible.”
Jinzi Jason Wu, Ascletis Pharma
Since founding Ascletis Pharma in 2013, Dr Jinzi Jason Wu – previously a VP at GSK in the US – has led the firm to now having two products on the market in China, having IPOed in Hong Kong and with a presence across the entire value chain, with R&D, manufacturing and commercial capabilities.
I believe you can find the most opportunities when the environment is complicated or difficult. This is why I decided to start a biotech company in China, not the US
Ascletis’ foundation predates the positive regulatory and market changes that have taken place in China more recently, but Wu felt that the opportunities outweighed the challenges. “When I returned to China, the environment was completely different,” he asserts. “There had been no real regulatory reforms or a biotech investment ecosystem. However, paradoxically, I believe you can find the most opportunities when the environment is complicated or difficult. This is why I decided to start a biotech company in China, not the US. The more challenges there are, the more risks you can take but also the more returns you can see – if you survive. This was what I thought when we founded Ascletis. We had to take the risk and work on truly innovative drugs in order to compete successfully.”
Wu sensed an opportunity in China to serve unmet patient needs. “When I resigned from my VP position at GSK in the US to return to China, I had two motivations. Firstly, I had been working in the US for 20 years during which I accumulated a lot of knowledge and experience, so I thought I could launch a start-up successfully. Secondly, at that time, after a drug was approved in the US, it would be another five to eight years before that same drug would be approved in China. I felt that Chinese patients and doctors deserve state-of-the-art drugs now instead of in five to eight years. During my time at GSK, I had been involved with M&A and BD for HCV assets. Looking at the China market, I noticed no Chinese companies were doing clinical trials in HCV. I saw a great opportunity here.”