Tuesday, February 4, 2020

China-U.S. biotech interconnection

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-People's Liberation Army General Hospital, aka 301 Hospital, a leading institution in Chinese gene-editing research
 It is striking how many of China’s CRISPR trials are taking place at the PLA General Hospital, including to fight cancer. Indeed, the PLA’s medical institutions have emerged as major centers for research in gene editing and other new frontiers of military medicine and biotechnology.  The PLA’s Academy of Military Medical Sciences, or AMMS, which China touts as its “cradle of training for military medical talent,” was recently placed directly under the purview of the Academy of Military Science, which itself has been transformed to concentrate on scientific and technological innovation.  This change could indicate a closer integration of medical science with military research. 
  In 2016 an AMMS doctoral researcher published a dissertation, “Research on the Evaluation of Human Performance Enhancement Technology,” which characterized CRISPR-Cas as one of three primary technologies that might boost troops’ combat effectiveness.  The supporting research looked at the effectiveness of the drug Modafinil, which has applications in cognitive enhancement; and at transcranial magnetic stimulation, a type of brain stimulation, while also contending that the “great potential” of CRISPR-Cas as a “military deterrence technology in which China should “grasp the initiative” in development. 
  The intersection of biotechnology and artificial intelligence promises unique synergies. The vastness of the human genome — among the biggest of big data — all but requires AI and machine learning to point the way for CRISPR-related advances in therapeutics or enhancement. 
  In 2016 the potential strategic value of genetic information led the Chinese government to launch the National Genebank (国家基因库), which intends to become the world’s largest repository of such data.  It aims to “develop and utilize China’s valuable genetic resources, safeguard national security in bioinformatics (生物信息学), and enhance China’s capability to seize the strategic commanding heights” in the domain of biotechnology.
The effort is administered by BGI, formerly known as Beijing Genomics Inc., which is Beijing’s de facto national champion in the field. BGI has established an edge in cheap gene sequencing, concentrating on amassing massive amounts of data from a diverse array of sources. The company has a global presence, including laboratories in California and Australia. 
  U.S. policymakers have been concerned, if not troubled, by the company’s access to the
genetic information of Americans.  BGI has been pursuing a range of partnerships,
including and with the Children’s Hospital of Philadelphia on human
genome sequencing.  BGI’s research and partnerships in Xinjiang also raise questions
about its linkage to human rights abuses, including the forced collection of genetic
information from Uighurs in Xinjiang.  There also appear to be links between BGI’s research
and military research activities, particularly with the PLA’s National University of Defense
Technology.
  BGI’s bioinformatics research has used Tianhe supercomputers to process genetic
information for biomedical applications, while BGI and NUDT researchers have collaborated
on several publications, including the design of tools for the use of CRISPR.   
-Elsa Kania is a Research Fellow with Georgetown’s Center for Security and Emerging
Technology and an Adjunct Senior Fellow with the Technology and National Security
Program at the Center for a New American Security.      https://www.defenseone.com/ideas/2019/08/chinas-military
pursuing-biotech/159167/
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2-14-19     Research Partnerships and other Collaborations
Chinese biotech firms have benefitted from relationships with US institutions that were not based on a formal joint venture or other equity investment. There are no legal requirements to disclose research collaborations or other partnerships, making comprehensive coverage through public filings difficult.  Similarly, unlike acquisitions, there is currently no mechanism for government review of these transactions.  We also do not have any existing databases or academic research that would allow a comprehensive review of the state of such relationships. For this reason, we have attempted to develop a typology of the most common types of partnerships in the biotech industry, explain what they entail, and provide examples.
  Historically many firms have sought Chinese partners to facilitate sales/distribution in the Chinese market or to access low-cost production capabilities. …Chinese entities are entering deeper, longer-term and more speculative partnerships.
(1) Industry-to-industry collaborations:  Chinese biotech companies have entered partnerships with foreign biotech firms for the purposes of joint R&D; co-development of drugs; supply of products and services; and joint sales and marketing of products. Most early collaborations were driven by foreign firms entering the Chinese market but in recent years such partnerships are increasingly driven by the growing global presence of Chinese companies. There has been a marked increase in activity in the past three years, but the exact scope of global activity is difficult to capture due to a lack of data.  Examples include:
 A partnership between Eli Lilly and Shanghai-based Innovent Biologics in early 2015 to co- develop cancer drugs, through which Eli Lilly gained access to two of Innovent’s cancer drugs and the Chinese market, while Innovent gained one of Eli Lilly’s drugs;272
 A partnership between UK genomics software company Congenica and BGI Genomics in 2017 to bring advanced drugs to China, through which Congenica received funding from BGI and access to genomic data from the Chinese population, and BGI gained access to Congenica’s DNA analysis software Sapientia;273
 The aforementioned technology transfer and commercial supply partnership between Celsion Corporation and Zhejiang Hisun Pharmaceutical in 2016;274 and
 A partnership between BGI and five Canadian biotech companies in late 2016 to apply sequencing technology to patient therapy, wherein BGI provides low-cost, high-throughput sequencing capabilities while gaining access to Canadian genomic data.275
(2) Corporate partnerships with universities, think tanks, and other research institutions:
Partnerships between industry and academia have become common.  As part of this trend, Chinese firms have partnered with foreign universities, for example, WuXi AppTec’s 2015 development and manufacturing partnership with the University of Pennsylvania’s gene therapy program to develop viral vectors to deliver gene therapies.276 This partnership provided Penn researchers with new cell and gene therapy manufacturing capabilities while WuXi could leverage the viral vector production expertise of the researchers. Chinese universities are also participating in partnerships with foreign firms, for example, Shanghai Tech University’s iHuman Institute and Shanghai Institute of Materia Medica’s participation in the GPCR Consortium, an open-source research collaboration with drug makers such as Amgen, Sanofi and ONO.277 In this instance, consortium members get access to protein structural coordinates, reagents and supporting data, while researchers gain access to compounds and data from industry partners.
270 "Celsion Corporation and Zhejiang Hisun Pharmaceutical Company Enter Into Technology Development Agreement for ThermoDox® for the Greater China Territory," Celsion Corporation, updated January 22, 2013, http://investor.celsion.com/news-releases/news-release-details/celsion-corporation-and-zhejiang-hisun-pharmaceutical- company
271 "Intuitive Surgical and Fosun Pharma Establish Joint Venture to Research, Develop, Manufacture and Sell Lung Cancer Diagnostic and Therapeutic Tools in China," Intuitive Surgical, updated September 29, 2016, http://investor.intuitivesurgical.com/mobile.view?c=122359&v=203&d=1&id=2206833
272 Peter Loftus, "Lilly Joins With Chinese Biotech to Develop, Market Cancer Drugs," The Wall Street Journal March 19, 2015, https://www.wsj.com/articles/lilly-joins-with-chinese-biotech-to-develop-market-cancer-drugs-1426820402
273 Angus Mcneice, "Top DNA sequencing provider partners UK genomics group," China Daily May 10, 2017, http://europe.chinadaily.com.cn/business/2017-05/10/content_29280036.htm
274 Celsion Corporation, "Celsion Corporation and Zhejiang Hisun Pharmaceutical Company Enter Into Technology Development Agreement for ThermoDox® for the Greater China Territory," http://investor.celsion.com/news-releases/news-release- details/celsion-corporation-and-zhejiang-hisun-pharmaceutical-company
275 Chuck Chiang, "Chinese genomics giant enters B.C. health research partnership," Vancouver Sun(2016), https://vancouversun.com/news/local-news/chinese-genomics-giant-enters-b-c-health-research-partnership
276 John George, "Penn in partnership to produce gene therapies at Navy Yard," Philadelphia Business Journal(2015), https://www.bizjournals.com/philadelphia/morning_roundup/2015/06/phila-penn-gene-therapy-wuxi-apptech-navy-yard.html
277 "GPCR Consortium," GPCR Consortium, http://gpcrconsortium.org/
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US Role in China’s Biotechnology Development
(3) Government-promoted networks and initiatives:  Chinese firms and research institutions are also increasingly involved in government-related biotechnology R&D programs. Examples are the China- Germany Bioscience Innovation Platform, which was launched by China’s Ministry of Science and Technology and Germany’s Federal Ministry of Education and Research (BMBF) in 2002 with the goal to facilitate academic research, cooperation, and innovation projects on biomedicine, biopharmaceutics, and new biological materials.278 In 2013, China and the UK set up the UK-China Research and Innovation Partnership Fund, and both sides promised to provide $273 million within five years to support research and cooperation in areas including stem cells, health, food security and other topics.279
(4) Research partnerships and collaborations between universities:  Partnerships between Chinese and foreign universities provide avenues for exchange of knowledge and capabilities.  For example, Peking University and Yale University launched Peking-Yale Joint Center for Plant Molecular Genetics and Agro-biotechnology in 2000 to facilitate research exchange on plant biology and genomics research, and has received funding from Monsanto, the Rockefeller Foundation, and the Chinese Ministry of Education (MOE).280 In early 2018, Shenzhen University and the State University of New York at Buffalo set up the first translational medicine research platform in China, together with Hong Kong Polytechnic University and Roswell Park Comprehensive Cancer Center.281 This partnership involves utilizing joint expertise to push forward R&D in cancer, genomics, translational medicine, and other topics in biotechnology. In another example, Washington State University has a broad research and exchange partnership with China’s Northwest Agriculture and Forestry University on agriculture, biofuels and bio-products production.282
  While our sample of transactions is by no means comprehensive, several trends stand out.  First, collaborations between Chinese and foreign firms have evolved from a mostly domestic focus on the Chinese market to a global scope.  Second, the most integral countries for these engagements seem to be the United States, Canada, Japan, Singapore, Australia, and Western European nations, which correlates with the abundance of advanced biotech companies and talents working in the industry.  Third, these collaborations offer an important complement to investments and other forms of interaction, and they contribute to the commercial success and profitability of the companies.  Lastly, looking forward, it seems that Chinese companies have strong interests to further increase these kinds of partnerships to address gaps and make up for missing capabilities.
  Foreign regulators have traditionally not scrutinized research partnerships between domestic firms and overseas entities. 278 Lin Xingxiu. Science and technology cooperation between major developed countries and China:  How do countries in Europe and the United States understand China's science and technology, How to cooperate with China:  Center for Research and Development Strategy:  Japan Science and Technology Agency, 2016. [Chinese Language Source]
279 "About Partnering Countries: China," Newton Fund, http://www.newtonfund.ac.uk/about/about-partnering-countries/China/ 280 YaleNews, "Peking-Yale Center Receives Gift from Monsanto for Plant Biology Research Fellowships," (2002),
https://news.yale.edu/2002/11/14/peking-yale-center-receives-gift-monsanto-plant-biology-research-fellowships
281 "The First Greater Bay Area Biotechnology and Translational Medicine International Collaboration in the United States · China ·
Guangdong - Hong Kong - Macau Greater Bay Area," The Hong Kong Polytechnic University, updated February 2, 2018,
https://www.polyu.edu.hk/web/en/media/media_releases/index_id_6507.html
282 "Collaboration with Northwest Agriculture & Forestry University in China," Washington State University, Biological Systems Engineering, updated November 13, 2017, https://bsyse.wsu.edu/2017/11/13/collaboration-with-northwest-agriculture-forestry-
university-in-china/
283 National Law Review Staff, "Export Control Reform Act Introduced in Congress," National Law Review March 8, 2018,
https://www.natlawreview.com/article/export-control-reform-act-introduced-congress; IEEE-USA Staff, "Congress Looks to Update Export Controls to Include "Emerging and Foundational Technologies"," IEEE-USA InSight June 16, 2018, https://insight.ieeeusa.org/articles/congress-looks-update-export-controls-include-emerging-foundational-technologies/

   4. China’s Involvement in U.S.-Based Research Organizations
This chapter reviews non-investment engagement of Chinese companies and institutions in the United States. It first discusses partnerships (including R&D centers, biotechnology incubators and other types of arrangements) and then describes academic collaborations.  It concludes with a discussion of benefits and risks from a US perspective.
4.1. Types of Partnerships
Apart from VC and FDI, biotech firms can use a number of other mechanisms of partnership to gain access to foreign technology and data, including licensing or R&D partnerships, incubators and other arrangements to enable sharing of expertise and technology, corporate partnerships with research institutions or universities, and founding of research institutions in foreign locations.  We found that Chinese biotechnology companies have utilized all of these channels in expanding their relationships with US entities.  Apart from wholesale acquisitions of companies, though, determining the meaning of a transaction in terms of IPR transfer and other risks is difficult, but we have identified some specific relevant cases.
US Role in China’s Biotechnology Development
Key Findings
 Chinese companies and researchers play an important role in in US biotechnology innovation through US-based R&D centers and incubators, corporate and academic partnerships, and a large cohort of Chinese researchers in US academic institutions and companies.
 China’s biotech companies attempt to benefit from the US biotechnology innovation pipeline by creating US-located R&D centers and incubators. They are attracted to the concentration of elite biotech companies and academic research institutes in major centers like Boston and the San Francisco Bay area. Some locales offer financial incentives for biotechnology that the companies are also looking to leverage.
 The Chinese government is trying to recruit students and researchers trained in the US to relocate to China.   Over 360,000 Chinese students are studying in the US today. Through programs offering incentives such as high salaries, laboratories, and startup financing, China has recruited thousands of researchers, both Chinese-born and foreign, to relocate to China since the programs began in 1994; the Thousand Talents Program alone has recruited over 2,600.
 Research partnerships between US and Chinese academic institutions or biotech firms spur scientific advancement and are generally beneficial to the US economy.  Partnerships are often designed to leverage expertise in specific fields, such as cancer therapeutics or precision medicine.
 Such partnerships also marginally increase the potential for theft of IP and trade secrets.  Close research collaboration can offer opportunities to individuals and companies to illegitimately or illicitly obtain and transfer US IP to China.
 The US has limited regulations on foreign involvement in US research.  Open collaboration is a cornerstone of scientific research and innovation, and foreign-born researchers are an integral part of US biotechnology.  The United States must maintain a balance between open collaboration and access to foreign talent with the potential losses due to leakage or theft of IP and technologies.

https://www.uscc.gov/sites/default/files/Research/US-China%20Biotech%20Report.pdf

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