Establishment of the Hong Kong Science Park, which covers 22 hectares and houses over 270 technology companies (19 of them medical or biotechnology firms), has been critical to the region’s biotech development objectives. HKJCICM is a tenant of the park, which is also home to seven foreign companies. These companies are mainly involved in development, technical support, and sales while the Hong Kong companies are involved in a variety of activities such as diagnostics, cryogenic storage, and enzyme technology. Two of the park’s occupants, Lee’s Pharmaceuticals and SinoMab, carry out manufacturing operations in China.
Opportunities for joint ventures (JV) abound in Hong Kong. One notable JV involves an alliance between institutions in Hong Kong and China. Beike Biotechnology was formed by Beijing University, HKUST, and the city of Shenzhen. The firm has a major research laboratory in Shenzhen, which is in the special economic zone adjacent to Hong Kong, as well as 18 laboratories associated with hospitals throughout China. Beike is focused on the therapeutic use of stem cells to repair spinal cord injuries and treat diabetes.
Another JV involves Geron and the Biotechnology Research Corporation (BRC), which was created by HKUST. TA Therapeutics was founded in 2005 and focuses on research directed toward developing telomerase-activation drugs to regenerate the capacity of cells that have been affected by senescence, injury, or chronic conditions.
Hong Kong’s economic success has always been shaped by the actions of its large conglomerates. Chinachem is one of the largest conglomerates in Hong Kong with extensive business interests in real estate, shipping, food, and entertainment. As a private entity, much of its history has been intertwined with that of the Wang family, most recently that of Nina Wang who held most of the shares in the group. She reportedly invested in 30 biotech companies in China, Taiwan, and the U.S. At the time of her death in 2007, she was considered to be the wealthiest woman in Asia with a worth of $4.2 billion.
Li Ka-Shing, chairman of Hutchison Whampoa Limited (HWL) and Cheung Kong Group, is Asia’s richest man with an estimated worth of $32 billion. His conglomerate’s biotech activities take advantage of unique opportunities in the interface between the West and China.
CK Life Sciences is part of the Cheung Kong Group whose Hong Kong listed companies have a market capitalization of HK$800 billion ($103 billion), CK has a major research complex in Hong Kong focusing in therapeutics for the treatment of cancer and AIDS. CK also markets the VitaGain product line, which reportedly boosts immunity. The firm has expanded its nutraceutical distribution network through the acquisition of Sante Naturelle, a nutraceutical brand, and the purchase of Vitaquest International Holdings, a U.S. nutraceutical contract manufacturer.
In the agricultural area, CK markets NutriSmart, an eco-fertilizer based on yeast. According to the company, this product stimulates growth and yield without any of the environmental effects of chemicals as its yeast granules create a symbiotic environment that supplies nutrients to the crops. NutriWiz, a fertilizer composed of a mixture of microbes, can be used as a basic or supplementary fertilizer. Production of the eco-fertilizers takes place in China in a facility built at a cost of more than RMB150 million ($22 million).
In addition to operating container terminals, HWL is also a retailer of health and beauty products. Hutchison Whampoa (China) Limited is the investment arm of HWL in China. Among its investments are firms that manufacture and distribute healthcare, personal care, and TCM products.
Hutchison China MediTech, which is based primarily in China, is listed in the Alternative Investment Market of the London Stock Exchange. Chi-Med’s business is based on TCM R&D for pharmaceuticals, nutritional supplements, and personal-care products.
Chinese government policy has been focused on consolidation of the pharmaceutical industry. HWL’s acquisition of selected drug companies is in line with that policy. HWL started by investing $20.9 million in Baiyunshan Hutchison TCM in partnership with Guangzhou Baiyunshan, a Chinese pharmaceutical company that produces both Western and TCM drugs.
Hutchison MediPharma, which was founded in 2002, is built around a new $30 million TCM R&D Center in Shanghai. The firm’s mission is to use TCM to develop Western drugs through alliances with major foreign drug firms.
Despite the successes of Chinachem and Hutchison Whampoa, so far, Hong Kong has had limited success attracting major initiatives from large pharmaceutical and biotechnology companies. In addition, its start-up companies are at an early stage, particularly as it relates to their Chinese operations.
Unlike many U.S. entrepreneurs who use a novel technology to create a profitable company or business, Hong Kong businessmen see biotechnology as an enabling technology to exploit highly profitable opportunities in both China and the West. It will be of particular interest to see whether Hong Kong’s nascent biotech industry and its foreign partners can successfully use TCM in the development of major modern drugs.