Hong Kong destined for best supporting role in biotech

Analysts and industry experts are widely predicting biotechnology and life sciences to be strong growth areas this year, but in comparison to other Asian markets, Hong Kong seems off the pace.

During the recent inaugural BioIT World Hong Kong 2002, a number of speakers, including Francis Ho, commissioner for innovation and technology for the Hong Kong Special Administrative Region (SAR) government, spoke of the bold investments and initiatives undertaken by India, Singapore, China, Taiwan and other Asian nations. Hong Kong was conspicuous in its low-key plans among this hive of surrounding activity.

Hong Kong trailing

Professor Lo Yuk Lam, chairman of the Hong Kong Biotechnology Association, spoke of the schemes currently underway in Asia's biotech scene. In China, US$84 million is being spent on a bioagricultural project backed by Beijing University, which was also given complete responsibility for 1.13 per cent of the global Human Genome Project.

The Taiwan government has invested US$588 million into a variety of biotech projects. Singapore's government has reserved US$700 million for biotechnology investments. And Hong Kong?

From 1995-1999 the SAR government spent just HK$350 million (US$45.2 million) on biotech-related projects, and "in terms of government commitment, Hong Kong is way behind other Asian countries in biotech development," Lo said. He noted that taken on its own, Hong Kong would have little to contribute in the pure research and development (R&D) area of biotech, "but venture capitalists and researchers now tend to look at Hong Kong being clustered with China," he said.

In terms of developing successful cases and examples of biotech, "Hong Kong has to link its initiatives with China," Lo said. Headed that the government is unlikely to admit this in public but "projects that have a China component are likely to get higher priority regarding government funding."

Research takes back seat

Hong Kong is not positioned well to perform at the forefront of biotech R&D, according to Eric Chan, director and head of Hong Kong research and strategy at Salomon Smith Barney Hong Kong.

But despite a lack of local biotech R&D, Hong Kong can still do well out of the sector as a marketing hub, Chan said. "It will be more from a service area, in other words the marketing and commercialisation of biotechnologies," he said. According to Chan, Hong Kong should be highly competent in finding the best opportunities available for emerging technologies or products. He claimed that Hong Kong also had the necessary legal, financial and accounting infrastructure to support research companies.

One model along these lines is an initiative by the Hong Kong Jockey Club's Institute of Chinese Medicine (HKJCICM).

In 1998, the chief executive's policy address set out a vision for Hong Kong to become a "world centre for the development of health food and pharmaceuticals based on Chinese medicine". This atmosphere of government patronage led to the establishment of the HKJCICM by the Hong Kong Jockey Club and the Hong Kong Applied Science and Technology Research Institute. Its mission is to lead the development of Chinese medicine as a high value-added industry for Hong Kong.

Both Lo and Chan believe that the main task of this initiative will be to establish a process of turning traditional Chinese medicine into standardised commercial products. This will involve taking products and acquiring the necessary protection of intellectual property rights and the required approval by international bodies such as the US Food and Drug Administration. Chan noted that China, for example, typically has a low level of understanding regarding this process.

Chan cited instances where European pharmaceutical firms had taken the essences of some Chinese medicine, patented and repackaged them, then sold them back into the Chinese market. "Local players cry foul play, but how can they prove it?" he said.

Dr Edmund Lee, executive director of the HKJCICM, acknowledged that there is a vital gap that needs to be bridged between leading-edge research and the eventual commercialisation of such technology. However, research itself should not be ignored, he noted, adding that Hong Kong does have a highly committed research community and that private enterprises are investing in these areas.

"These may not be receiving the high-profile attention of many IT research projects but it's simply a case of the investors not making it public knowledge yet," Lee said.