SinoMab, first local biotech firm to list in city, says Hong Kong can be ‘nerve centre’ of regional industry

Eric Ng

Hong Kong biotechnology company SinoMab Bioscience, which is set to debut on the local stock exchange on Tuesday, said the city had the potential to become the nerve centre of a regional industry, provided the government did more to bridge the gap between academia and industry.

“Hong Kong’s scientists are well-trained and of a high calibre, but as the city lacks an established industry ecosystem, their training is more geared towards academic research,” Shawn Leung Shui-on, SinoMab’s founder and chief executive, said. “While we are good at basic scientific research, the lack of local industry demand for biochemistry scientists means a lack of support for work that translates academic achievement into commercial application.”

The company develops drugs for immunological diseases such as rheumatoid arthritis, and is the first home-grown company to list under Hong Kong’s revamped initial public offering regime, which allows biotechnology companies without any profit or revenue to list. All 11 such companies that have listed in Hong Kong so far have been mainland China-based firms.

Leung said that while Hong Kong was blessed with high-calibre talent, good research facilities, unrestricted access to overseas scientific literature and an internationally recognised legal framework for intellectual property protection and collaboration, a historical lack of industry presence had held back commercial development.

Such advantages, however, mean it was well placed for core research and development, as well as for coordinating clinical trials and product manufacturing in mainland China, for which an ample number of patients as well as land resources were key, Leung added.

The Hong Kong government has awarded about HK$1.5 billion (US$191.5 million) in funding to 960 biotechnology projects in the past seven years, according to the Research Grants Council, which advises the government on the research funding needs of local higher education institutions.

The new listings regime at the Hong Kong stock exchange will also boost local biotechnology firms. “Now local biochemical PhD graduates are increasingly hired by venture capital firms and biotech start-ups to work as analysts to evaluate biotech assets and projects,” Leung said. “Their expert opinions help their employers invest more professionally.”

Previously, many biochemistry graduates, including Leung, a molecular biology graduate from Oxford University, went abroad to pursue further education and job opportunities. Those who stayed behind tended to land academic research or teaching positions.

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“Besides research and development, they now also have broader opportunities to take up roles in downstream activities, such as manufacturing and quality assurance.”

Leung returned to the city and in 2000 became managing director of the Hong Kong Institute of Biotechnology, a clinical trial facilities provider and start-up incubator under the Chinese University of Hong Kong.

He currently sits on the first panel set up by the Hong Kong stock exchange to assist with the review of biotechnology listing applications.

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SinoMab has R&D operations at Hong Kong Science Park, as well as manufacturing facilities in Haikou in China’s southern Hainan province, and is building a bigger facility for commercial production in Suzhou, in China’s eastern Jiangsu province.

“Hong Kong is our coordination brain, while our body is spread over mainland China and potentially elsewhere,” Leung said.

Hong Kong last year announced it would set aside HK$50 billion to spur innovation and technology development, including biotechnology. Of this amount, HK$40 billion was allocated to Hong Kong’s Science Park in Tai Po, where SinoMab is based.

Hong Kong’s aim to be Asia’s biotech hub is still a work in progress

This includes HK$20 billion for building the first phase of the Hong Kong-Shenzhen Innovation and Technology Park in Lok Ma Chau Loop next to the border.

While the park will foster cross-border collaboration, Leung said the government could carry out more consultation with industry players so that its policy support is better geared towards commercial development. “Government policy should balance between academia and industry, so that [its] policies will be more practical and more in line with what the industry needs,” he said.

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