Asia may turn out to be a big market for T67/T607 for HCC due to the high incidence of hepatitis. This from Forbes:
Biotechnology
Burrill's China Prescription
Russell Flannery, 06.21.02, 11:30 AM ET
BEIJING - Great prospects, but tough to tap.
That sums up San Francisco-based biotech investor Steven Burrill's views of China's burgeoning biotech industry. The country's upside is straightforward. World-leading economic growth and an aging population augur a market that will grow for years. "This isn't just a big country, it's a rich country, and it has a very robust health care system," he says. "It's not just going to be served by the indigenous Chinese pharmaceutical industry."
But tapping this market will be tricky. Piracy, capital controls and identifying products that locals will actually pay for will be difficult for those looking to take advantage.
Burrill knows the global industry well. He has been investing for three decades, and manages about $400 million of investments at Burrill and Co. Burrill's annual report is followed closely by industry investors, and his ardor hasn't been sapped by debacles at ImClone Systems (nasdaq: IMCL - news - people ) and Elan (nyse: ELN - news - people ). He hopes to raise another $250 million of funds in the next few months. Burrill is in Beijing this week for one of China's largest-ever biotech conferences, sponsored by the Australia-based Pacific Rim Forum.
China's trillion-dollar economy, Burrill says, has been somewhat overlooked by biotech-related industries. By and large, the U.S., Europe and Japan are considered one-third each of the world market. People have relatively little interest in or awareness of how to create value in the rest of the world. But China has major potential and could become every bit as lucrative as the other major markets. If U.S. or European companies treat China as little or as a throwaway from a value standpoint, Chinese companies can exploit that and create tremendous value.
The locals aren't likely to miss that opportunity, Burrill says, because of their decent science resources. "Certainly from the science side, the Chinese are the equal of other peoples in the world. And in productivity, you're able to get a significant amount of science here at a low cost. That could be a tremendous engine." Eventually, China also has a good chance to find overseas customers interested in "wellness" that would be willing to try traditional Chinese medicines, he says.
Some of the best sales and investment opportunities in China today involve drugs that solve local health problems and aren't so dominant in the U.S. and Europe. "A lot of companies are likely to misunderstand China's government and private sector initiatives and what they want to pay for and not pay for," Burrill says. Antibiotics, for instance, are likely to sell well in China for years to come, as are antiviral drugs for one of the country's top scourges, hepatitis.
As local makers upgrade and seek out effective drug formulas from outside of China, a future theme will be consolidation. "There are a lot of small companies in segments without big dominant leaders," Burrill says. "There are opportunities in economies of scale, and in bringing in technology from the outside." One notable part of the biotech industry in China, he says, is aggressive government support. Besides looking for local firms, foreign investors aiming to profit from growth in the country may also be able to put money into biotech companies from Taiwan, Hong Kong or Singapore that see themselves as a channel into the China market.
To be sure, there remain major hurdles for biotech investors interested in China. One of the largest problems, which impacts locals and foreigners alike, is theft of intellectual property. "Historically, that's why people have been unwilling to invest." The country's membership in the World Trade Organization won't be meaningful if authorities don't step up enforcement of tougher, improved rules.
Capital controls also catch many unknowing foreign investors off-guard. "There are some unique problems in China that have to do with currency convertibility, and it's unlikely that you're going to see a lot of inbound capital if there can't be some convertibility to that," says Burrill. So it's no surprise that he says the first investment he's planning in Asia may not be in China at all--it may be in South Korea.
Yet China's rapid change demands the attention of biotech investors around the world. "You can't look at China through the rearview window, or even just in terms of the present," he says. "The changes happening are just that fast."
forbes.com |
