The Doctors Will See You Now
The PEAK Hong Kong|November 2017

Biotech is where the future of humanity is (almost literally) being made, and Hong Kong’s handful of researchers and entrepreneurs are starting to get global attention for their work. As the government prepares to double R&D expenditure, could a homegrown biotech business be on Hong Kong’s horizon?

Ryan Swift

Bankers, lawyers and doctors – these are the holy trinity of professions approved by Hong Kong’s Tiger Moms for their children. But they have something else in common. All are undergoing dramatic changes because of the expanding role of technology.

The city’s bankers might be wondering where their careers stand as fintech takes a firmer hold in their profession, and lawyers must be asking themselves what legal-tech will do to their chosen path.

For Hong Kong’s pool of students and researchers in the life sciences and medicine, however, the growth of a local biotechnology industry is very good news. Our cover personalities in this issue are all doctors with an interest in biotechnology, and all agree that the past five years has seen an uptick in interest among investors and businesspeople in the prospects for Hong Kong’s biotech sector.

The biotechnology business covers a wide spectrum of activity – from pharmaceuticals, radical stem cell therapies and diagnostic tools, to use of genomic data and medical devices. In Europe and the US, the key markets for biotechnology, overall revenues for listed companies rose from US$130 billion (HK $1.14 trillion) to $140 billion between 2015 and 2016, a growth of 7 percent, according to a 2017 report by consultancy EY. The report characterised this as disappointing, considering the double-digit growth of previous years. Employment among biotech companies climbed from 178,690 to 203,210, while expenditure on research and development rose 12 percent.

In the US, key cluster areas for biotechnology and innovation such as the San Francisco Bay Area, New England and San Diego, all far exceed China in terms of money raised, according to EY. That said, China is leading the charge for Asia in terms of developing home-grown biotechnologies that are the source of investment opportunities.

China’s businesses are keen to develop their biotechnology portfolio, either through acquisitions or investing in start-ups. Ping An’s US$1 billion Global Voyager Fund, which will invest in fintech and healthcare start-ups, will be managed from Hong Kong.

With its strong intellectual property laws and robust universities, Hong Kong has the right ingredients for biotech sector development, according to Dr Albert Yu, a man regarded by his peers as a biotech pioneer. Born in Hong Kong,

Yu went to study medicine in Canada, eventually becoming a neuroscientist. He also exhibits a slightly mischievous side in conversation.

In 1994, Yu returned to his home city from San Francisco to take up a teaching position at Hong Kong University of Science and Technology. “I was in the [San Francisco] Bay Area for five years, and I witnessed the greatness of biotech over there. I figured that when I came back to Hong Kong, I wished to do biotech there,” Yu says.

But Hong Kong in 1994 wasn’t ready for the kind of biotechnology business cluster that Yu had seen in San Francisco. There weren’t any biotech firms to speak of, and though Yu encouraged his HKUST students that biotech “was coming to Hong Kong”, the lack of career prospects was daunting. It was for this reason that he decided to start his own biotech firm,

Hai Kang Life, and start employing his own students. In part, it was to provide a career opportunity for life sciences students, and in part, it was a great way to tap a skilled labour pool.

“Basically, all my staff were graduates of HKUST,” Yu says with a smile.

Hai Kang Life was founded in 1999 to commercialise research on molecular diagnostic tools for infectious diseases, launching an H5 avian-flu detection kit to the market.

The early successes of Hai Kang Life would normally prompt a university to help find ways to promote and commercialise the research. Instead, HKUST asked Yu to either leave the company or focus on teaching. So, he left HKUST in 2002, and later accepted a teaching position at Peking University, specialising in neuroscience while being allowed to continue running Hai Kang Life. “I am [still] a full-time professor at Peking U; it’s hard for a scientist to give up what they want to study,” Yu says.

He would go on to found the Hong Kong Biotechnology Organisation (HKBIO) as an umbrella association to help promote the field in the city. In addition to a professorship and chairing a company, Yu is also setting himself up as the spokesman-in-chief in Hong Kong for biotechnology.

He sees big things in the industry, globally and at home, and compares its impact to that of the biggest tech trends such as IT and materials science. And Yu thinks big. He sees Hong Kong as a potential epicentre of biotechnology that spans the whole of Asia. He says he has registered a new company, the Hong Kong-Guangdong-Macau Biotech Alliance, to promote the industry to investors and politicians. Yu and his HKBIO are planning a major biotech conference in Hong Kong this November.

Apart from the intellectual property protection fundamental to a new biotech company, Yu sees the proximity to China as the other main advantage for Hong Kong’s nascent biotech sector. “I don’t think that any European biotech would say that they can go into China easily; a US company wouldn’t dare to go to China. But in Hong Kong, we can say that [to investors]; we can go to any part of the world, including China.”

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