Civica
Financial intelligence for Asia's healthcare markets
 
 
Remember me:

Analysis: Biotech start-ups elevate Hong Kong’s regional role

Albert Wong argues that biomedical technology should not be ignored and explains how the Hong Kong Science and Technology Parks Corporation can support it.

Amid all the attention given to robotics, artificial intelligence, big data and IoT, one of the most attractive areas of technological advance is often overlooked: biomedical technology.

For some, the costs and risks associated with the industry make it less attractive as an investment proposition. But in Hong Kong Science Park, we view it differently. A mix of groundbreaking technologies and a strategic focus to convert Hong Kong into a regional biomedical hub make this sector highly attractive.

Add to that the growing health awareness in the region, where lifestyles, changing diets and growing wealth, together with ageing populations, are creating health issues once associated more with the western world. Rising demand and pressure on healthcare services are pushing up medical costs, but at the same time, creating huge potential for the growth of biomedical sector.

Hong Kong is well-placed to support biomedical technology development. It has the world’s biggest market – China – on its doorstep, a large talent pool, access to funding, with a legal structure and a finance system that gives confidence to both inventors and investors. At Hong Kong Science Park, besides its facilities and a lot of like-minded people, close working relationships with the city’s eight world-class universities mean there is a lot of talent available. Hong Kong Science and Technology Parks Corporation (HKSTP) facilitates knowledge transfer and nurtures talents through connections with stakeholders to provide technical and financial support for the technological innovation and commercialisation.

For the field of biomedical technology, HKSTP fosters innovation and development of products such as futuristic diagnostic devices or life-saving treatments to address the society’s health needs. On the technical aspect, HKSTP provides laboratories and service support at Science Park, such as the Biomedical Technology Support Centre. These can be used on a time-share basis, while staffed by professional scientists, all of which would be beneficial to start-ups often operating on a shoestring budget. The Park is also an ideal platform for sharing expertise and business collaborations, as well as investment-matching, for the entrepreneurs to follow their r&d dreams.

As a result, the Park now hosts over 100 biomedical companies and start-ups with business scope spreading across medical devices, stem cells, genomics and regenerative medicine, molecular diagnosis, as well as research and development on Chinese and Western medicines. All these different subspecialties contribute to an ecosystem that’s highly conducive to biomedical research.

For drug r&d, there are strong synergies for Hong Kong and mainland China, particularly in areas where researchers have common objectives, such as the development of early disease diagnosis and precision medicine for treating cancers. Because of its bilingual system and largely Chinese population, Hong Kong is an ideal place to draw on international research and expertise, and adapt it to best suit local needs.

More importantly, clinical data from Hong Kong is recognised by the China Food and Drug Administration for registration and approval purposes, making it an ideal testing ground for emerging therapies and devices which are tailor-made to the population’s genetic make-up to achieve optimal efficacy.

In Asia, healthcare is heavily burdened by rapidly ageing populations and increasing chronic diseases prevalence, especially cancer. At present, lung cancer is the leading cause of cancer deaths worldwide. Every year, it causes more than 1.6 million deaths – more than breast, colon and prostate cancer combined. And among all the cases, 51% of the world’s lung cancer cases occur in Asia, while 21% of cancer deaths in Asia are due to lung cancer. In China, the world’s largest consumer of tobacco, about two-thirds of young Chinese men smoke, and it is estimated that about half of them will die as a result of it if they don’t stop.

The good news is that local innovation is driving advances in cancer treatment. One company at the forefront is Hong Kong-based Sanomics, which specialises in genomics technology and has dramatically altered the delivery of treatments to individual lung cancer patients based on the ground-breaking new concept of precision medicine.

With precision medicine, Sanomics is shifting from body testing to DNA analysis to identify more targeted therapies for cancer. Precision medicine is a sequencing approach that looks for and examines abnormal changes in genes. It supports the decision-making of oncologists based on information about genetic alterations in tumour DNA. Specific treatments can then be aimed at abnormalities or mutations which cause the growth of cancer cells.

What is unique about Sanomics’ approach is that it uses bodily fluids, such as blood, to screen for genetic alterations when tumour tissues are not available or when it’s not possible to do a biopsy on a patient for conventional diagnostic purposes. It adopts a new process known as liquid biopsy. It is faster, more convenient and more practical in the clinical setting associated with less invasive procedures for the subjects.

Sanomics is an excellent example of the successful commercialisation of academic research in Hong Kong – developing from a proof of scientific concept in university to providing commercial products and services. The company started from HKSTP’s incubation programme, in which the Park would provide support on financial aid, laboratory and technical needs, as well as collaboration matching with corporations who are looking for partners. Sanomics soon established a collaboration with a leading global pharmaceutical company to test and find the optimal treatment for lung cancer patients based on their genetic make-up.

On the back of its success to date, Sanomics is now building Asia’s first hub for liquid biopsy in Hong Kong, and will lead the region in the use of genomics for personalised management of cancer.

Research and development, such as that which supported the growth in liquid biopsy diagnostics is driven by the private sector, especially in late-stage research. In Hong Kong, there is no shortage of funding, but investors tend to need more education on longer term, early-stage investment. So we play to the different investor strengths and needs, tapping universities particularly for early-stage research.

Hong Kong is fortunate in having some of the world’s finest universities, all with different specialisations from lab-based research and product development to in-the-field community healthcare. These are particularly good at early-stage research, but less so when r&d reaches the commercialisation stage. In these situations, a research licensing model has proved effective. The late-stage research and commercialisation then go to private sector companies, such as Sanomics at Hong Kong Science Park, which have the expertise to progress its development.

The Science Park has different means to support start-ups, including its Corporate Venture Fund and other funding schemes. It also holds investment-matching events such as the Elevator pitch, to be held in November, in conjunction with Jumpstarter. Through arranging such regular matching events, HKSTP helps to pair angel investors and venture capitalists with Park companies to accelerate their biomedical innovations and developments.

An investment ecosystem is a critical component to technology development. The biomedical sector, like other technology sectors, needs smart investors to bring up the good ones, and prune the not-so-good ones. Biomedical technologies take a long time to develop and to mature. Development and regulatory processes cost money and time. Investors have to be ready to partner, bringing expertise and patience. The investment cycles often include long drawn-out periods of non-profit or even non-revenue. The entry barrier is high and the risk is high. Smart and strategic investors are critical to the growth of biomedical. We are lucky that we have some of these in Hong Kong.

Albert Wong is CEO of the Hong Kong Science and Technology Parks Corp.

Posted on: 12/09/2017 UTC+08:00


News

Medical diagnostic imaging services provider Capitol Health has said that it expects to return to profitability in the next financial year and has upgraded its outlook for the year.
Paragon Care, a leading distributor and manufacturer supplying medical equipment to hospitals, has said that it is “targeting strong growth in 2018 across all key metrics”.
Malaysian medical glove manufacturer Supermax Group has reported a 42.8% jump in Q1 profits to M$27.9 million (US$6.8 million) on revenues that 16% to M$312 million.
At its annual general meeting, international pathology, imaging and medical centres operator Sonic Healthcare reaffirmed guidance for the year. Chief executive Colin Goldschmidt said that the first quarter of the 2019 financial year confirmed expectations that underlying earnings would grow between 6% and 8% on a constant currency basis.
It has been another great quarter for China Cord Blood Corporation (CCBC), the country’s largest provider of cord blood storage and ancillary services. For the second quarter in a row, profits more than doubled. They came in at US$10.2 million.
New Zealand-based medical device manufacturer Fisher & Paykel Healthcare has reported a steady set of first half figures. Profits were up 4% to NZ$81.3 million (US$55.3 million) on revenues that rose 8% to NZ$458.4 million.
Retirement village operator Arvida has reported a 14.5% slump in profits for the first half of the year to NZ$14.5 million (US$9.9 million). At the same time, revenues were up 27.9% to NZ$60 million.
Medical device manufacturer Microport Scientific Corporation plans to acquire the cardiac rhythm management (CRM) business of London-based medical device manufacturer LivaNova for US$190 million.



Analysis

The promise of a bottom in Singapore’s office market has caused its ranking as an investment market to soar from next-to-bottom last year to third in this year’s “Emerging Trends in Real Estate Asia Pacific 2018” report, a real estate forecast jointly published by the Urban Land Institute (ULI) and PwC.
Kamal Brar, vice president and general manager of Asia Pacific for data software company Hortonworks, looks at how data analytics can provide effective and affordable healthcare in Singapore.
The latest Sun Life Financial Asia Diabetes Awareness Study reveals an alarming knowledge gap in diabetes. A third of Asian women who are or were pregnant in the past three years are unaware of the risk of developing gestational diabetes in pregnancy, while one in seven births in Asia is currently affected by gestational diabetes.
Gan Kim Yong, Singapore’s minister for health, explains why the private sector needs to get behind the National Electronic Health Record System.
Business leaders in Asia Pacific’s healthcare industry are showing urgency in embracing the fourth industrial revolution, according to the Microsoft Asia Digital Transformation Survey. More than three-quarters of them believe that they need to transform to a digital business to enable future growth and yet only a quarter said that they have a full digital strategy in place today.
An agreement for an additional US$15 million funding from the World Bank will be used to expand health and nutrition coverage in the Lao People's Democratic Republic. It is expected to benefit more than 1 million people across 14 provinces.
Bart Van den Mooter, CEO of the TforG Group, looks at the drivers behind the rapid growth in Asia’s medical tourism market.
The ambitious healthcare agenda under Moon Jae-in's liberal presidency will seek to expand national health insurance reimbursement and limit the burden of excessive medical costs, while overhauling the healthcare system. BMI Research looks at the winners and the losers in the presidential agenda.


Civica

Podcasts

AON

Hedge Fund Focus

HealthInvestor Asia twitter feed
HIA Indices