Economic Observer reporter Qu Yixian intern reporter Bi Yuchen
Editor's note: China's local pharmaceutical companies basically start with generic drugs, while high-value innovative drugs with revolutionary efficacy are basically monopolized by foreign companies. In recent years, this phenomenon has gradually been broken, and a number of local innovative pharmaceutical companies are emerging.
With the implementation of the special implementation of the "major new drug creation" in 2008, the reform of the drug regulatory system in 2015, the volume procurement of drugs in 2018, the listing of unprofitable biotechnology companies on the Hong Kong Stock Exchange, and the implementation of policies such as the Science and Technology Innovation Board and the Growth Enterprise Market focusing on supporting biomedicine, local innovative pharmaceutical companies are ushering in more and more development opportunities.
In the past few years, with strong self-motivation and the support of the capital market, domestic innovative pharmaceutical companies have stepped onto the international stage, and have gradually entered a virtuous cycle of innovative drug listing and harvested bright data for commercialization.
As a witness and recorder, the Economic Observer will continue to pay attention to the development and transformation of China's biopharmaceutical industry, and talk to those who have witnessed this great change.
This article is the fifteenth in the series of reports on the Sinopharm Restoration, documenting the story of Suzhou Biomedical Industrial Park (Biobay).
In mid-December 2023, Yin Jianguo returned from Europe to attract investment, which is the second time he has gone abroad to attract investment this year.
As the chairman of the bio-industry development of Suzhou Industrial Park, he took colleagues from the investment promotion department and the cooperation department of the park to Basel, Switzerland, planning to build a talent transfer station in Switzerland; He also went to Imperial College London and the University of Cambridge in the United Kingdom to inspect the local life science industry and signed an intention to cooperate.
Suzhou Industrial Park Bio-Industry Development *** is a state-owned enterprise established by the Suzhou Industrial Park Management Committee, specializing in the operation of Suzhou Biomedical Industrial Park (Biobay), which is a name that is difficult to avoid in China for innovative drugs.
In the annual ranking of biomedical parks released by the Ministry of Science and Technology, BioBay has ranked among the top three together with Beijing Zhongguancun and Shanghai Zhangjiang for several consecutive years, and even ranked first in some sub-categories.
Biobay is different from the park in the north, from the very beginning we have integrated entrepreneurial genes, introduced small businesses, and started slowly. Behind Yin Jianguo's seemingly "official" words, BioBay, as a biomedical park located in Suzhou, can only do refined operations in terms of investment promotion and management when competing with Beijing and Shanghai, which have national resources, and the resources are not enough to make up for the service, which may be the reason why BioBay ranks among the top three.
Since its opening in 2007, BioBay has gathered 620 biomedical innovation companies, nearly 30 listed companies, and three key industrial clusters are innovative drugs, high-end medical devices and in vitro diagnostics, and biotechnology.
Since 2021, the domestic biopharmaceutical industry has begun to experience a "capital winter", and it has not yet ushered in spring. BioBay is no exception, and in the second half of 2022, Harbour BioMed, CStone, and Elpiscience all announced the suspension or resale of their Suzhou manufacturing sites.
Looking back, Yin Jianguo believes that biopharmaceutical companies have gone through a process of exploration, and no one can foresee the future, in the industry with a more detailed division of labor and becoming more and more mature, the focus on R&D for R&D, the focus on production for production, and the focus on CRO (contract R&D organization) for CRO, the entire industry will develop more healthily.
There are several measurement dimensions of the biomedical park - output value, tax revenue, innovation achievements, etc., Yin Jianguo wants them all, but his KPI is to have innovative results, that is, innovative drugs and innovative medical devices that come out of BioBay.
Yin Jianguo and his colleagues have received many parks to inspect, learn and communicate, he said that he will pay attention to the dynamics of each biomedical park, and is happy to see the development and growth of each park, because after the scale of the industry is expanded, Biobay must also be a member of the "thousands of purples".
What kind of business
Investment promotion is the core division of BioBay, but in the current reality environment of weakening earnings expectations, sluggish capital markets, and difficulties in corporate financing, it is not easy to attract investment.
After the epidemic was released, Yin Jianguo set his sights on Europe.
Basel, Switzerland is a pharmaceutical highland, Novartis and Roche are headquartered here, with a large number of biomedical practitioners, but also brought together the top biomedical talents in Europe, and Switzerland is also rich in university resources, including ETH Zurich, EPFL, etc., which are the world's top universities.
Yin Jianguo saw in Switzerland that in addition to giants, local small enterprises doing cell, antibody drugs, and small molecule drugs are also very active, as well as R&D centers set up by Chinese companies in Basel, local industrial parks and giant companies are doing incubators, and a large number of talents and capital are gathered in the local area.
Therefore, he wants to set up a talent transfer station in Europe, which is also a project introduction base, which can bring countless possibilities for all enterprises in BioBay to "bring in and go out", including the introduction of talents and projects, as well as the "going overseas" of projects.
For example, in addition to innovative drugs, there are also some functional food companies in Switzerland, which have a strong interest in a huge market like China, and have a demand for CDMO (contract research and development and manufacturing organization) services in China, and also want to visit China to investigate suitable pipeline targets.
In the Cambridge area of the United Kingdom, Yin Jianguo saw a large number of projects established around the life sciences field of Cambridge University, and also hoped to introduce their innovative projects to Suzhou and China. Therefore, BioBay has also reached an intention to cooperate with the Center for Metabolic Research of the University of Cambridge.
Of course, going abroad to attract investment only accounts for a small part of the investment work, more often, biobay is still attracting investment in China. Yin Jianguo bluntly said that the investment promotion work in 2023 will be more severe than that in 2022, mainly because "the money in the market is more conservative, and people's willingness to start a business is lower".
Biobay's approach to the current severe situation is, on the one hand, to provide more support to the existing enterprises that have already settled in, to help these enterprises link more overseas BD (business development) resources, especially to connect with multinational companies, and attract the latter to pay attention to the innovative products in the park.
The second is to increase the docking with the first, when the big waves are washing, there are still first-class companies willing to invest in really good products.
The focus of investment attraction in biomedical industrial parks changes with industrial changes. In the early years, Biobay's investment attracted mainly small molecule drugs and generic drugs, and later focused on antibody drugs, cell** and gene** drugs. In recent years, nucleic acid drug projects, mRNA projects and so on have been introduced.
On the basis of maintaining traditional advantageous projects, Biobay is now also very focused on artificial intelligence, specific antibodies, and even extends its sights to the entire anti-aging field, including functional foods.
Everything related to biomedicine is our focus, which is a complete industrial chain. Yin Jianguo said.
Financing is difficult
Yin Jianguo's WeChat address book covers most of the people in charge of enterprises in the park, and this kind of contact is frequent. The door to his office is always open, so businesses can come directly to him or meet at Biocafe, a café downstairs from Biobay.
Recently, the problem that enterprises have discussed most with Yin Jianguo is: it is difficult to obtain financing, and it is difficult to obtain financing.
The biomedical "capital winter" that began in mid-2021 quickly swept the entire industry, which was not only affected by global cyclical changes, but also due to fierce domestic competition and bubbles in the early stage of the industry. In the past, the founder of an innovative pharmaceutical company could meet with several investors during the time of a cup of coffee at BioCafe, but now BioCafe is still a distribution center for people and information, but the frequency and density of communication have decreased.
How to get out of the cold winter? In Yin Jianguo's view, the most effective way out at present is to increase foreign cooperation, followed by reducing costs and increasing efficiency, and finally reducing costs through cooperation.
The recent good news is that on January 2, Yilian Biotech, a company in the park, joined hands with Roche to pay Yilian Biotech a down payment and a recent milestone payment of US$50 million for a next-generation antibody-drug conjugate of Yilian Biotech, in addition to nearly US$1 billion in potential revenue, including milestone payments.
On January 5, Insilico Medicine entered into a licensing agreement with Menarini Group. Menarini will receive exclusive worldwide development and commercialization rights to Insilico ISM5043 in a transaction in excess of US$500 million, including an upfront payment of US$12 million.
In addition, Myrick Biotech has recently completed an angel round of financing of tens of millions of yuan, and Nurebridge Biotech has recently completed tens of millions of yuan of pre-A round of financing.
Like the recent acquisitions of domestic biotech by multinational pharmaceutical companies, these are good news under the "cold winter", but the larger and broader reality is that most biotechs have not yet found an exit path.
At the end of 2023, AstraZeneca acquired Gracell Biotech, which may become the first biotech to be acquired in China. The first biotech to be acquired has appeared, will the first biotech that go out of business be far away?
Yin Jianguo believes that according to the objective development law of the industry, there will definitely be biotech that goes out of business, and the enterprises in the biobay park are no exception.
As the industry moves forward, it is normal for innovative companies to die, and Biobay cannot and will not violate the laws of this industry, so there will be companies that will go bankrupt in 2024, and there will always be after that, in fact, every industry is like this, and what needs to change is the public's perception. ”
In his view, a pharmaceutical company does not necessarily have a pharmaceutical factory, and the so-called real good drugs are amino acid sequences, chemical structures, data, and intellectual property rights, which are the core of a pharmaceutical company. The more difficult it is to raise funds, the more you need strong R&D data to help you navigate through the cycle.
Before the Spring Festival, Yin Jianguo plans to organize an event in the park, and strive to invite the relevant person in charge of each enterprise, he feels that more communication between enterprises will open up more possibilities, and it is also one of the ways to relieve anxiety with each other.
History
Yin Jianguo's relationship with BioBay began in 2006, when he was invited to participate in the groundbreaking ceremony of BioBay as an ordinary staff member. Nearly twenty years ago, Biobay had no laboratories, production bases, universities, hospitals, just muddy land.
The organizers distributed a pair of high rubber shoes to each person who participated in the ceremony, and Yin Jianguo and others wore rubber shoes and stepped on the gravel road to reach the site of the groundbreaking ceremony.
Today Biobay, has been built 15150,000 square meters, about 196 under construction50,000 square meters, there are already the first, second, and third phases in official operation, and the latest five phases have also been opened.
In the past ten years, the domestic biomedical industry has achieved leapfrog development: thousands of scientists in the field of biomedicine have returned to China to start businesses, and then attracted a large number of professionals to work; Since 2011, there have been 510 varieties of innovative drugs approved for marketing in China, of which about one-third have been innovated by local enterprises. The quality of biomedical R&D has also been greatly improved, and in the past three years, domestic R&D enterprises have an average of 30 varieties of external licensing ...... every year
Biomedical industrial parks have also become a hot industry, and many second- and third-tier cities, and even counties, have begun to build biomedical industrial parks.
Yin Jianguo said that there are resource endowments and advantages in various places, and the biomedical industry is the "No. 1 industry" in Suzhou, not only the Health Commission and the Food and Drug Administration, but also other departments in Suzhou, including the Industrial and Commercial Bureau, the Environmental Protection Bureau, etc., many leaders and staff can explain the whole process of making drugs clearly, and they know enterprises and entrepreneurs very well, which is the advantage of Suzhou.
Suzhou's relatively weak place is hospital resources, making innovative drugs highly dependent on clinical research carried out in hospitals, Suzhou's hospital resources are weaker than Beijing, Shanghai and Guangzhou, which has troubled Yin Jianguo for a long time, and he seems to have found a solution recently.
Suzhou Municipal Hospital, the largest medical group in Suzhou, now works closely with Biobay. People from the hospital go to work in the park, people from the park go to the hospital to build a clinical trial office, and Suzhou Municipal Hospital fully undertakes the clinical trials of enterprises in the park. Yin Jianguo said that the clinical business of Suzhou Municipal Hospital has recently increased several times, and its scientific research strength has also been improved, which is a two-way mutually beneficial cooperation.
The development of Biobay follows the development of the enterprises in the park. Biobay's current office building is the incubator building when the park was just starting out, and the offices of Yin Jianguo and his colleagues were small R&D laboratories at that time. In the beginning, it was enough for most companies to have a laboratory.
When the enterprise enters the pilot stage, BioBay begins to build a pilot plant; Later, the company entered the stage of commercial production, and Biobay began to provide infrastructure, water, electricity, steam, environmental protection treatment facilities, and built professional waste and hazardous chemical warehouses.
In the past two years, the needs of most enterprises are no longer the needs of hardware facilities, but more of talent needs, first-chain needs, capital needs, external cooperation needs, etc.
There are now more than 200 employees in the development of bio-industry in Suzhou Industrial Park, which are divided into project introduction, project services, property management, production safety, clinical registration, commerce, human resources and other departments, more than 40% of whom have biomedical backgrounds, and many have overseas study backgrounds.
Yin Jianguo believes that the capital winter will always pass, and the park will also help enterprises find capital and go through the cycle together.