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U.S. Taps Sleeping Giant in Asia’s Life Sciences Realm

Executives Are Waking Up to Savings, Research Potential By Joining Forces Across the Pacific

Staff

Biotechnology executives speaking at UC San Diego include Jason Jin, CEO of MaxyBio, center.
Biotechnology executives speaking at UC San Diego include Jason Jin, CEO of MaxyBio, center.
While Ascenta Therapeutics Inc. executives in San Diego are fast asleep, their counterparts in the firm’s Shanghai, China, office are working through the night.

“They are just starting when we go home,” Ming Guo, vice president of pharmaceutical sciences and manufacturing at San Diego-based Ascenta, said of the 16-hour time difference. “If I send an e-mail before I go home, the answer is there waiting for me as soon as I wake up.”

But the company’s ability to speed development of cancer drugs by working around the clock, around the globe isn’t its main reason for starting the wholly owned subsidiary in China in April.

Life science firms are saving up to 75 percent on projects by completing them in Asia, industry reports say. For life science companies, outsourcing and other partnerships with companies in Asian countries, including China, India, Japan, Korea, Taiwan and Singapore, are becoming more the rule than the exception, industry members say.

Joe Panetta, chief executive officer of Biocom, which represents 500 life science firms in San Diego County, said there is a growing interest in doing business in Asia among local life science companies. But like other industry members, he said it’s difficult to quantify just how many local life science firms have one foot in the East.

Panetta said these companies include Althea Technologies, Cambridge, Mass.-based Biogen-Idec, Invitrogen Corp., BioDuro and Arena Pharmaceuticals Inc. — just for starters.

Shaving Payroll Costs

Laura Shawver, chief executive officer of Phenomix Corp., said her firm saves more than 50 percent by employing a contract research firm in China. Phenomix uses 10-15 scientists there to synthesize compounds.

“They make starting materials or building blocks,” Shawver said, adding that her firm is considering holding some clinical trials in India. “We finish it.”

Peng Chen, a partner at San Diego’s Morrison & Foerster office who has focused his law practice on the biotechnology industry, said more than half of major pharmaceutical companies have facilities or agreements with Chinese companies.

Partnerships with companies in China and India, where labor costs are low, tend to be for outsourcing of research and development, and some manufacturing, industry experts said. Chen said outsourced research is now more likely to include pharmacology and toxicology, not just chemical research.

Industry members point to the highly educated work force in China and low cost of doing business there as the country’s strengths in the area of life sciences. “They don’t have as much strong intellectual property yet,” Guo said. “But that’s changing.”

Partnerships with Japanese companies are more likely to be centered on licensing rights to a drug.

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  February 8-14, 2010
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