Come One Come All: China As BioMedical Nirvana

Come one come all, guaranteed millions to be made/saved in China. You already knew about the 1.3 billion middle class consumers salivating at the opportunity to buy our cell phones and iPods, but did you know your intellectual property (IP) fears are completely groundless, you can achieve full on guanxi by spending ten minutes a day on it for less than a month, and great scientists are cheap and plentiful. Yes folks, China is on sale right now at 80% off and anyone who does not bring their biomedical company there will be missing out. This sale runs through Friday, and does not include previously discounted merchandise.

Okay, so I am exaggerating a little bit, but after reading this short article entitled, "China Generates New Opportunities for Biomedical Companies," written by, Greg B. Scott, I do feel ready to have my biomedical company up and running smoothly and cheaply in China within the month.

Did you know:

China is a huge market with low costs.
Despite its challenges (never really mentioned), life science companies see "the immediate benefits and potential promise and are launching R&D, clinical, manufacturing and distribution operations in China."
China is developing, new, "cutting-edge compounds and medical devices," "unfettered by the U.S.�s conservative political climate";
Drug development costs in China are 80% less than in the U.S., and outsourced manufacturing of drugs and devices can be less than 1/10 the cost;
China�s "potential market for healthcare products of 1.3 billion people is aging more rapidly than any other country, and its middle class of over 250 million is projected to double to 500 million by 2020."
"There are over 2,000 Chinese-foreign joint ventures in the biomedical sector, including major players like Roche, Novartis, GSK, Pfizer, Medtronics, Becton Dickinson and Inverness Medical, just to name a few. Most are significantly expanding their operations and are investing heavily in research and development to move beyond just manufacturing and distribution.
"China is encouraging foreign investment in the life sciences by subsidizing foreign investment organizations and deregulating venture capital."
"Drug development costs are not only 80% lower than those in the U.S., they are at least 50% less than most other OUS [outside United States?] markets. The low cost of medical supplies services and animal and primate studies contribute to this."
"There is a large population of highly-educated scientists trained at the more 170 medical schools and 120 biomedical research institutes in China available at 1/10 the equivalent U.S. salaries."
"IP protection is definitely improving, with patent laws now compliant with WTO/TRIPS requirements, increased legal enforcement supported directly by the SFDA, and an IP rights team from the USPTO now located in China.

The article goes on to highlight a few examples of American biomedical firms doing business in China, including HUYA Bioscience International, Inc., described as "the first company to in-license a compound from a Chinese biopharma for clinical development in the U.S." Bridge Pharmaceuticals, which "just opened its 100,000 square foot facility in Beijing, which is said to meet U.S. standards for preclinical drug development." AVIVA Biosciences Corp. a diagnostics products development company with a clinical research facility in Beijing. TargeGen, a private company using small molecule medicinal chemistry to focus on vascular biology, which "has continued to expand its relationship with Wu Xi PharmaTech Co. Ltd. of Shanghai, a leading drug R&D service company with 1,400 scientists and over one million square feet of research and GMP manufacturing space." On top of this, "several VCs have established programs to review investment opportunities in China, including WI Harper, Burrill & Co., IDG-Accel, Kleiner Perkins, Granite Global, Enterprise Partners, Paramount BioSciences and Panorama Research.

But, according to the article before you just fly over to China and start your business, you should know the following:

"The Chinese are strategic thinkers. They have grown up with The Art of War and The 36 Strategies, both from the Warring States era (476-221 BC), as the basis for their approach to negotiation. This often involves manipulation and deception and drawing out as much information from your opponent as possible, while being �as unfathomable as the clouds� yourself. This is somewhat counter-intuitive to Americans, who (generally) believe that openness and clearly defined objectives are key to long term relationships. "
The state is involved in almost everything in China. If you are looking to in-license a compound, it will likely be from a State University or a State-Owned Enterprise (SOE). If you want to register your VC firm or establish a business entity or joint venture there, you must deal with a variety of local, provincial and state officials."

But now that you know that, the next thing you must do is "select someone who understands China�s rapidly changing biomedical industry and business environment and who can build trusted relationships (guanxi) with your potential partners. This will save you time and expense by quickly identifying viable business partners and establishing the initial contact on your behalf. It will also save you many 20 to 30 hour round-trip flights, as you establish your company�s guanxi in China."

So now you have all you need to go forth and prosper. Better yet, just get going now and read the article on the plane.