Endpoints News presents ‘The China biotech debate: Boston’
Venture capitalists, academics, and biotech company directors gathered to discuss the potential impacts of Chinese innovation on Cambridge’s biotech scene
In America’s current era of uncertain research funding, the biotechnology industry is no exception to the ambiguity. However, this domestic policy erosion is only one of two threats outlined by the American Biosecurity Initiative (ABI), an organization dedicated to protecting biotech’s critical role as national security infrastructure.
The other threat, according to them, is China.
On Thursday, Aug. 6, about 200 venture capitalists, academics, and biotech company directors gathered in the Koch Institute’s Luria Auditorium to hear a series of panels titled “The China biotech debate: Boston.” The event was hosted by Endpoints News, an independent news organization reporting on biotech and the pharmaceutical industry; it was sponsored by ABI and the Koch. Attendees wore name tags representing institutions like J.P. Morgan, Moderna, the National Security Commission on Emerging Biotechnology, as well as countless other biotech companies of all stages.
In his welcome remarks, Endpoints Editor-in-Chief Drew Armstrong called China’s rise in biotech “the most important story of the next half-decade.” As evidenced by the state of the room, where every seat was taken and additional listeners stood in the back, the professionals of Cambridge, Mass. share a similar sentiment.
Attendees comment on Chinese collaboration
“It’s not even enough to say you can’t ignore China anymore. They are the biggest leaders of the ecosystem,” remarked John Jung, a business development manager at Korean biotech company Proteina. Chinese biotech presence is particularly influential in the eastern hemisphere, Jung said, reflecting on how his company and country must figure out a way to “find its own niche” in comparison to such a dominant competitor.
Lisa Raffensperger, a senior vice president at biotech-focused public relations company Ten Bridge Communications, has seen the way American companies have changed their strategies in response to China’s growing dominance. She says there are now options to partner with China, outsource research to China, and otherwise take advantage of China’s expanding biotech resources.
Of course, the ever-hanging question is the foreign country’s role as competition. Raffensperger names one consequential benefit for American companies: the rivalry forces them to accelerate their own clinical processes and achieve the best result faster. “It’s pushing us all to something better,” she reflected.
Cissy Young, a life sciences and venture capital managing director at True Search, a talent management company, shared the positive outlook. “Competition globally is healthy for the entire ecosystem for advancing innovation [and] for the sake of better medicines for patients,” Young explained.
Every interviewee was excited to hear in-depth discussions on strategy on China from leaders on the biotech forefront. There was also anticipation regarding the gathering of so many industry professionals. “These kinds of events are the exact reason why we have [a] presence in Boston… we could network and potentially meet future partners,” Jung said.
In his opening remarks, Armstrong named Cambridge as one of the “four real centers of power in the biopharma world,” alongside San Francisco and, humorously, the entirety of the U.S. and Europe.
The change that drove the talks is how China is quickly becoming the fifth. Jennifer Crook, the executive director of ABI, shared in her speech that one third of new American drug candidates had origins in China, and that China leads the U.S. in clinical trials by 20%. Yet Crook believes that “America is still ahead, and the moment to secure an advantage is while you still hold it.”
With that, the debates began.
Increasing costs, decreasing innovation
The first pair of panelists was Jacob Becraft PhD ’19, cofounder and CEO of clinical stage biotech company Strand Therapeutics and Matt Gline, CEO of drug development parent company Roivant Sciences, for a debate titled “Has China changed how we build companies?”
Armstrong, acting as the moderator, opened by asking Gline about changes he has observed in biotech innovation, not only relating to China. According to Gline, one problem that the U.S. must face is the modern commoditization of the drug discovery chain: the highly profitable manufacturing step is now “cheap and easy,” with novel methods being copied nationally and globally in fewer and fewer years.
Becraft diagnosed a second problem, declaring that the biotech industry has been “sick.” Because of the exploding costs for a drug to reach an in-human trial, companies are hedging the capital risk by exploring only medicines already known to have a high likelihood of success.
“We are spending more and more money [while] developing less and less innovative medicines,” Becraft said.
The two disagreed on the correct response to these issues. Gline called out Americans’ fear of foreign medicine specifically, saying that we wouldn’t have an issue if we had access to cheaper but imported hamburgers, for example. He claimed that although we should certainly have faster domestic clinical trials, we should also “just be excited” that China’s efficiency allows us to have more and faster clinical data.
On the other hand, Becraft maintained suspicions about the quality of Chinese data, referencing their two recent cases of undisclosed pediatric deaths in gene-editing trials. He declared that the best solutions were reform of the Food and Drug Administration (FDA) and national funding sources to maintain a strong national base, referencing the limited quantity of people in his PhD class who chose to continue academia because of the exclusivity of National Institutes of Health (NIH) grants.
He worried that losing out on innovation would prove detrimental in the case of another pandemic like COVID-19. “If we don’t have an industrial capacity to continue inventing medicines, then we lose an incredible amount of soft power to a country that is not a global collaborator when things get tough,” Becraft said.
Gline was skeptical of these concerns. “Anywhere in the world where someone invents a drug, … the thing they dream of from the minute they are at the lab bench is … access to the U.S. patient population because that’s where the money is,” Glenn claimed, referring to the U.S.’s high costs of medicine.
One of Gline’s final points was about the historically great innovation of the U.S., pointing out how Google, OpenAI, and Ford were all founded in America, calling them the “first among the greatest innovations” in their respective sectors. By that logic, he expressed hope that the U.S. would continue succeeding and competing. “[Innovation] is about the spirit of what it means to be an American,” he concluded.
Protecting the U.S. biotech frontier
The second panel, titled “Investor math versus industrial priority,” featured a highly anticipated debate between Jason Kelly ’03 PhD ’08 PD ’08, the CEO of Ginkgo Bioworks, an autonomous lab company, and Peter Kolchinsky, a managing partner at RA Capital Management. The two had been quarreling via X and LinkedIn in the months leading up to the debate — Kelly is very against China while Kolchinsky is very for China. Joining the pair was MIT Sloan Professor of Entrepreneurship Fiona Murray, who also acts as the chair of the North Atlantic Treaty Organization’s (NATO) Innovation Fund.
The panel was extremely chaotic, with the two men frequently talking over each other while Armstrong and Murray tried to keep the peace. Kelly was the most emphatic of the speakers, calling himself a “China hawk” driven by his desire to protect the U.S.’s frontier in biotech and bioengineering. He argued for a complete protectionism standpoint, explaining his desire to fully prevent any drugs that originated in China from reaching the U.S. When questioned about the feasibility of the plan, he shared that 70% of the worldwide pharmaceutical market originates from American patients and voters, making it “basically a U.S. domestic industry.” (When fact-checking, The Tech found most reports estimated the value to be around 50%.) Under Kelly’s logic, therefore, the U.S. has the power to control exactly what comes to our country’s borders.
Kolchinsky was much more open to the idea of partnership with China. He began by calling disease “a common enemy” to be defeated through global collaboration. As a biotech investor, Kolchinsky said he would always look for and fund the best possible drug in the world, not an American company that tried to copy it. He emphasized throughout the talk that the most powerful lobbying force in America was “a patient demanding a cure,” and that it was unjust to deny someone what could potentially be the best solution just because it came from a foreign country, especially considering how easily a Chinese medicine could be repackaged as European to avoid all legal blockades. Although he admitted that China is “kind of an adversary,” he quickly recalled how the U.S. had worked with the Soviet Union, even during the Cold War, to defeat smallpox together.
The most contentious moment between the two came when Kelly compared his ideals regarding medicine to a current national policy that prevents American autonomous vehicles from utilizing Russian or Chinese software. When Kolchinsky questioned the reasoning behind the order, Kelly continuously failed to answer the question, only managing to say that it was not allowed “because it was coming from China and Russia” and that “the president said in an executive order that it was a national security risk.”
Kolchinsky accused him of “not knowing the root” behind the policy, and members of the audience were visibly agitated, echoing Kolchinsky with murmured interjections of “But why?” and “Rationale!” from their seats.
Armstrong calmed the tension and passed the mic to Murray for the final say. She concluded that the three of them would always agree that America needs to have and maintain the best frontier in order to maintain independence and not be “held hostage” in another global emergency situation like COVID-19, but completely decoupling from China was probably not the best move. Still, she summarized that the political environment regarding biotech was clearly disunified, and that the most important priority was to “use all the tools at our disposal in the most coherent fashion.”
The pharma perspective
The last talk was a solo feature of Dr. Andrew Baum, a senior strategic advisor to the CEO of Pfizer, to reveal more about big pharma’s perspective on China.
Armstrong began by asking him about his thoughts regarding the first two panels. Baum seemed to agree with many of Kolchinsky and Gline’s ideas, expressing optimism at the idea of using China’s notoriously high clinical trial output as a way to garner more information faster. He affirmed that pharmaceutical companies would be very careful about choosing which hospitals and Chinese trials they would allow and trust, comparing it to a similar careful vetting process already existent in the U.S. He also wasn’t bothered by the idea that the U.S. would somehow be accelerating China’s biotech learning process, arguing, “they’re going to get there without help.”
In the end, Baum shared that he didn’t believe a real competitive Chinese multinational pharma company would properly emerge until about ten years in the future. Even then, this timeline didn’t worry him.
“China is already an important part of the ecosystem,” Baum said. “Is it going to be more so in the future? Yes.”
However, Baum continued with a statement that seemed to match the sentiment of all the attendees and panelists in the room. “Is it necessarily going to erode the U.S. position? It doesn’t have to. It will be because we make that decision, and we have the power not to.”