CBMG says China and U.S. growing quickly closer in biotech space

Print 27 May 2015
EJ Lane / FeircePharmaAsia

Collaboration between biotech companies from the U.S. and China is in a good state of flux as plays from "friends and family" and signs of growing venture capital and Big Pharma licensing deals are in motion at the same time, according to Andrew Chan, senior vice president of corporate business development for China-only Nasdaq-listed biotech, Cellular Biomedicine Group ($CBMG).

CBMG, as the company is known, straddles the growing world of biotech collaboration in China and the U.S., and Chan spoke to FiercePharmaAsia in April on Innovent's success in raising $100 million in venture capital to help it build a pipeline of biosimilars and what that means for an industry many see as ready to explode in a country about to invest $6.45 billion in startups.

With offices in Palo Alto and Shanghai, CBMG keeps close tabs on academic work between the two countries and the increasingly mobile diaspora representing a sort of third culture in the biotech world.

"This is anecdotal, but we see a network of people looking for the best ideas and that starts a company no one knows when a few like-minded get together," said Chan in telephone interviews.

"But money for the China part is not in the network deeply yet, so this is really entrepreneurial because often the first money is their own, or friends and family," Chan said. "However, we're seeing new streams come in and also China looking abroad."

Indeed, last week a heavyweight consortium of Chinese biomedical- and healthcare-focused funds said it would acquire San Diego-based biotech Ambrx, which abandoned an initial public offering last year, in a deal that opens a path to cutting-edge candidates in oncology therapies.

China Everbright's healthcare fund, Shanghai Fosun Pharmaceutical Group, HOPU Investments and WuXi PharmaTech ($WX) announced the deal without providing financial details and said they expect it to close in the second quarter of 2015.

At the same time, smaller deals involving greater China firms such as Hutchison China MediTech now see milestone payments as it advances a candidate for treatment of patients with metastatic colorectal cancer in China also licensed from Eli Lilly ($LLY).

The common link of the deals is oncology, with China alone a cancer market that is seven times larger than the United States, with a reimbursement and insurance structure that is slowly moving to produce and pay for more innovative treatments--while keeping a sharp eye on costs.

"These are doctors and clinicians who worked at MD Anderson, or Sloan Kettering and other clinical settings as well as hospitals in China and they have hands-on experience in many cases about treatment pathways," Chan said. "Unmet need drives the research, but also experience."

But it is not just oncology for companies like CBMG, which recently released Phase IIb interim data on knee osteoarthritis stem cell therapy as well as Phase I clinical data on CD19 and CD20 as part of their CAR-T immuno-oncology clinical development programs.

Last week, the company announced a Phase I update of a program designed and conducted by the Beijing-based Chinese PLA General Hospital at the 10th Annual World Stem Cells & Regenerative Medicine Congress in London on May 21.

The company has been the target of short-selling with a website called the Pump Stopper questioning its valuation and research efforts on CAR-T. The company responded to Pump Stopper on April 7, saying the claims it is advancing are a "short agenda" for personal gain and are false.

Chan said the ability to work clinically in China has been a key factor in widening the scope for innovative therapy research, but that the venture capital and funding sources remain a missing piece of the puzzle.

"There is a lot of good work going on, but these are researchers and they don't know how to monetize it or even where to begin on that aspect," Chan said. "We think there has to be a better way to track this, to attract researchers that cross between China and the U.S. because there is so much going on beneath the surface."

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