Cancer is worsening in China, where it causes an annual 2.1 million deaths. That’s luring overseas researchers intent on meeting surging demand for treatments.
BeiGene Ltd. hired 20 U.S.-educated scientists from companies including Johnson & Johnson and Merck & Co. to help find new cancer medicines since it formed last July. It got financial backing from Merck and is in talks with seven other drugmakers and venture capital firms to raise $100 million to $150 million, said John Oyler, its chief executive officer.
BeiGene is part of a vanguard of health-care startups in the world’s most populous country. They are tapping government incentives that promote research and innovation, while taking advantage of the skills and knowledge of overseas-trained Chinese. China’s death toll from cancer increased 5.6 percent from 2008 to 2010, according to the World Health Organization.
“We are starting to see some of the local companies take up market position in relatively new and complex drug categories, including oncology,” said Wang Jin, a Shanghai-based partner at consulting company McKinsey & Co.
The cancer mortality rate in China is about 144 per 100,000 people, according to the WHO in Geneva. That compares with 123 per 100,000 in the U.S., 135 in the U.K. and 76 in India. Almost one on five people in China will get a malignancy -- most likely lung, stomach, liver, esophageal or colorectal cancer -- before age 75, the WHO says.
$1.5 Billion Market
China’s cancer-drug market is worth more than $1.5 billion, according to the IMS Institute for Healthcare Informatics. Oncology is among the top five therapy classes in China, where sales growth has exceeded 25 percent over the past five years, the Parsippany, New Jersey-based research group said in July.
Biotechnology is among five key industries that China’s government will promote during its 12th five-year plan spanning 2011 to 2015, according to a draft released March 5. The drive has helped spawn companies such as Cyagen Biosciences, located in Science City on the outskirts of Guangzhou, and Suzhou-based KeyBay Biotechnology.
Closely held BeiGene, based in Beijing, is studying drug candidates passed over by bigger companies to identify new products to fight China’s most common cancer-killers.
“We want to become the Genentech of China,” said Oyler, 43, referring to the South San Francisco-based developer of the cancer drug Avastin that Roche Holding AG (ROG) bought for $46.8 billion in 2009.
Of BeiGene’s 60-plus scientists, a third were born in China and received a U.S. education or worked at an American or European pharmaceutical company, Oyler said. The company plans to hire 140 scientists in 2011.
Merck, Glaxo
Its president, Peter Ho, a medical doctor, graduated from Yale University before working in cancer-drug development at Johnson & Johnson and GlaxoSmithKline Plc. (GSK) Chief Scientific Officer Pearl Huang has a PhD in molecular biology from Princeton University and led research groups at Merck and Glaxo. Chief Medical Officer George Chen has an MBA from the University of Pennsylvania’s Wharton School, and held senior posts at Glaxo, Eli Lilly & Co., Johnson & Johnson (JNJ) and Sanofi.
Wang Xiaodong, a naturalized U.S. citizen who founded BeiGene with Oyler, said he gave up posts at the U.S.-based Howard Hughes Medical Institute and a professorship at the University of Texas-Southwestern to return to China in 2003. He helped the Chinese government establish and expand the government-funded National Institute of Biological Sciences, which now has 800 researchers.
“I was in the U.S. for 26 years and built my entire academic career there,” said Wang, 48, who has remained the Beijing institute’s director, in an interview. “The most innate motivation coming back is to be part of what’s happening in China, which by any stretch of imagination is the most dramatic event in human history in the last 30 years.”
Sophisticated Science
More Chinese scientists are returning from abroad to work in China, attracted by more sophisticated research, including the development of biotechnology that make drugs from proteins produced by living cells, said McKinsey’s Wang. Previously, pharmaceutical jobs in China were mainly in sales and marketing, she said.
Wang Xiaodong and Oyler’s own money provided initial financing for BeiGene. Oyler declined to say how much Whitehouse Station, New Jersey-based Merck has invested, adding that the backing may lead to partnership deals.
“We are working together to evaluate areas of potential collaboration,” Dong Ruiping, Merck’s head of emerging markets research and development, said in an e-mailed statement about the BeiGene investment. He declined to disclose the amount.
BeiGene is testing five drug candidates. Two aim to improve on treatments already on the market, while the others use a novel mechanism of action to target a range of tumor types, Oyler said, declining to elaborate.
The plan is to test the most promising treatments in early- and mid-stage trials, usually involving hundreds of patients, Oyler said. Those that are successful may be sold back to larger drugmakers or co-developed with a partner that can finance late- stage studies typically involving thousands of patients.
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