Welcome to BioMarketing Insight's monthly newsletter.

I recently gave a presentation at the Medical Technology Innovation and Startup Conference in Shanghai, China on May 29th, 2013 and attended the Shanghai Bioforum. I will be discussing what China is planning for Pharma/Biotech and Medical Device Innovation.

Read on to learn more about this topic and other current news. On the right are quick links to the topics covered in this month's newsletter. The next newsletter will be published on July 15th.

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Please email me, Regina Au, if you have any questions, comments, or suggestions.

Sincerely,

Regina Au

Principal, Strategic Marketing Consultant

BioMarketing Insight 

In China's 12th Five Year Plan (FYP), one of the Strategic Emerging Industries (SEI) that is being focused on is the biotech/medical device industry. The plan supports the development of innovative biotech products, high-end medical devices, and patented medicines. The government reportedly put forth a spending package of more than RMB 12 billion for R&D of new drugs from 2011-2015. 

"A key priority of the 12th FYP is for China to transition from "Made in China" to "Designed in China." To achieve this goal, the government planned to invest heavily in science and technology R&D and education, further develop China's intellectual property rights system and support "Next -Generation IT" as an SEI. "China's indigenous innovation drive will also continue to play a central role in this sector throughout the 12th FYP period."

Next -Generation IT had been selected because China is particularly interested in accelerating the creation of next-generation information networks, mobile communication, and the Internet. The government plans to invest in R&D for the "Internet of things," including cloud computing, and develop digital and virtual technologies.

This was very evident at the International Partnering Conference for Medical Technology Innovation and Startup 2013 and the Bioforum. At the opening ceremony for Medical Technology, hosted by the Shanghai Center of Biomedicine Development, officials from the various academic institutions and agencies, including the SFDA, all spoke about the goal of innovation in China. One of the things I was glad to hear is that they all emphasized the importance of both the innovative technology and commercial assessment or success of new products.

Keynote speakers Yubo Fan, Professor of Biomechanics, and Director, Key Laboratory for Biomechanics and Mechanobiology of the Ministry of Education, spoke about how the lines between the industries (pharma/biotech, medical devices, and diagnostics) are blurring and Mr. Yunlong Wang, Deputy Secretary-General Shanghai Medical Instruments Trade Association, predicted that Wireless technology would play a greater role in medicine.

My presentation on "Improving Diagnosis and Management of Diseases Through the use of Wireless Technology with Medical Devices and Diagnostic Tests in the US fit right in with their goals of innovative medical technology and next-generation IT. Wireless is a way of life in Shanghai. It seems as though everyone has a cell phone or smartphone. In fact, the people in Shanghai often carry several electronic such as iPhone, iPad and Blackberry and some will carry two iPhones. One can easily buy a SIM card for your cell phone with a local Chinese number, minutes, and 3G capabilities. The only catch is that it has to be a Chinese phone or an iPhone since the SIM card is different for an American cell phone.

 

China is well positions in adopting and developing Wireless technology with devices and diagnostics test. Currently China meets 3 of the 4 criteria: 1) Wi-Fi technology, 2) mobile applications, and 3) healthcare professionals using electronic devices in practice. Currently, the only criterion China doesn't meet is the conversion to electronic medical records to make wireless technology and its application in the healthcare space successful.

  

Recently, Raiing, a Beijing company developed a wireless thermometer that received FDA clearance in the US. The thermometer, a peel-and-stick contact thermometer is worn under the armpit and has a sensor that continuously transmits body temperature readings to a companion iPhone app. The thermometer can also store up to 72 hours worth of readings.

  

In addition, fifty-four percent of the physicians use social media regularly and oncologist and physicians who treat chronic diseases have the largest following.  Hospitals are also jumping on the band wagon by creating social media accounts for their medical staff and even requiring them to communicate with patients via social media. Why is this? Seventeen percent of patients use the internet for information to select a hospital and for the demographic age group of under 25, it increases to 28%. I wouldn't be surprised if China jumps ahead of the US when it comes to Wireless technology and mobile apps.

The format of the conference was very similar to those in the US where invited speaker from large device companies such as Medtronic and Philips gave their insight on where they see the industry moving, Company Road Shows, with feedback from various experts in their disciplines and one-on-one partnering meetings. I participated in the Company Road Shows. The whole conference fostered collaboration and partnership between entrepreneurs, established companies, academics, and investors.

 

The format of the Shanghai Bioforum was more focused on technology, drug discovery development and personalized medicine. The topics of IP, generics, and biosimilars were also covered. Collaboration and partnership with other countries were also included in the topics.

 

Since this was an international conference, most of the presentations were in English and the organizers offered simultaneous translation of Chinese to English and English to Chinese. As expected, all the foreigners, which included me, had headsets for translation from Chinese to English. What impressed me was that very few Chinese needed translation from English to Chinese. I shouldn't be surprised, since this group of people is highly educated and a good number of Chinese are educated in the US. Many of the speakers at the conference are originally from China, educated in the US and either remained in the US or returned to China to start their own businesses. The Chinese government has been actively recruiting and offering very attractive incentives for overseas Chinese to return to China and start businesses.

 

Contract Research Organizations (CROs) are abundant in China and there are three large Pharma/Biotech Parks that foster CROs and companies. The Science Parks are set up as a community where employees can live and work. Elements of traditional Chinese business philosophy are present in the practices of many CROs. In many such communities, the company provides all employee meals as a way to promote loyalty to the company and provide an incentive for employees to follow good work ethics. This philosophy has also been adopted by some US companies, such as Microsoft and Google. For employees at Microsoft headquarters all meals are free and additional services such as dry cleaning and day care are provided for one's convenience.

 

First time visitors to Shanghai will encounter a very modern city, yet "Old Shanghai" is still present. High rise buildings are numerous and the building binge continues. From "The Bund" (similar to a boardwalk and one of the many attractions) looking over to PuDong, the skyline reminded me of Hong Kong or Manhattan.

Shanghai is also like Paris, as it is the shopping capital of mainland China and there are probably more malls in China than anywhere else in the world. All the high end designers are represented in Shanghai. Neither will you starve in Shanghai, as there is no shortage of restaurants as well.

I was impressed with Shanghai's subway system, which is more modern than Boston's. It is all underground, air conditioned and the trains are sleek and fast. The subway has 14 different lines which initially looked very complicated, particularly if you have to change lines several times. But once you understand the system you find that it is very organized. Signs and instructions for buying a ticket are in both Chinese and English and announcements of the next stop are in both Chinese and English. The stops and destination are also posted on the platform as well as on the subway with flashing lights indicating the various stops.

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We all have the same goals when it comes to healthcare and innovation. The borders between countries have practically disappeared. It makes sense to partner or collaborate internationally when the goal is to drive innovation, whether one is an established corporate entity, ambitious entrepreneur, or research-oriented academic institution. Looking at things from a different viewpoint can only help innovation just as the borders of pharma/biotech, medical device and diagnostic industries and high tech have blurred in enhancing the development of new technologies. As the old saying goes, two heads are better than one.

Source: tmbiology.blogspot.com

Dr. Shai Meretzki can re-grow bone but not in the conventional way. He can take excess body fat, extract mesenchymal stem cells from it, and grow custom-made bone, outside the patient's body. The bone comes with the patient's own blood vessels, and once grafted, it will grow the patient's own bone marrow.

"Many people grow cells two-dimensionally in a petri dish, in which you put the cells and they grow across the dish in a mono layer. But in our body, nothing is 2-D. What we've found is that the moment you take 2-D cells and grow them in 3-D, they behave completely differently," said Meretzki.

Dr. Meretzki and his group was the first in the world to grow cells in 3D culture. Eleven years ago he found the biotech company Pluristem Therapeutics in Haifa Israel that develops off-the-shelf cell therapies for a variety of human diseases.

Pluristem uses a small amount of discarded placentas (from childbirth) cells and cultivates larger amount specifically for people who suffer from peripheral arterial disease or blockage of blood flow to the legs. The cells are injected into the leg to promote the growth of new blood vessels.

"After a few days the cells disappear, but you have a bypass of the block of the blood vessels that you have in your leg," Meretzki said.

Positive results from their first clinical trial in Israel and Germany showed that of the 20 patients who would have required leg amputations, only one lost the limb.

To read more on this article in the International Business Times, click here.

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Fifteen Medical Device and Fourteen Pharma/Biotech Funding Deals

To determine whether funding is picking up, I will be focusing on all types of funding that are $1 million or greater in seed investments and series A or B (or the valley of death) that are pre-IPO. Even though VCs are investing, they continue to invest in their existing portfolio companies and less in start-ups. Incubators, state funding, and business competitions are great for initial seed money but not enough to keep the company going long-term.  These are worldwide funding deals. 

Partnerships and licensing deals with upfront payments and milestones will not be included.

Funding deals are in chronological order by date.

$0 = No financial terms disclosed. For more information, read more ....

Funding deals are in chronological order by date.

$0 = No financial terms disclosed. For more information, read more...     

Mergers & Acquisitions continue to be made for both medical device (11) and pharma/biotech (11).  

A number of big device (S&N, Zimmer, Quest, GE) and pharma (Takeda,Amgen, Elan, AbbieVie, Actavis Inc, Novo A/S, AstraZeneca, Valeant and GSK) companies had acquisitions this month.  Elan Corp had two acquisitions this month. 

There were three billion dollar acquisitions made: 1) Elan Corp acquired Theravance Inc. for $1 billion, 2) Actavis Inc. (formerly Watson Pharmaceuticals acquired Warner Chilcott for $8.5 billion in stocks and 3) Valeant Pharma acquired Bausch + Lomb for $8.7 billion.   

Acquisitions are in chronological order by date with Medical Device/Diagnostics followed by Pharma/Biotech.

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