Zhangjiang drives up innovation

Shanghai, China

With the research and development centres of big pharmas like AstraZeneca, Roche, Novartis and GlaxoSmithKline (GSK) swarming to a once remote area in Shanghai, Zhangjiang Life Science Park has become a flagship for China’s burgeoning biomedicine industry.

Companies in the life science park realised total sales of 10.2 billion yuan (US$1.5 billion) in 2008, and the park management hopes to create more local innovations by opening a large ’incubator’ to provide a well-equipped launchpad for start-up companies. Wei Xiaolin, a former scientist at the University of Leeds, UK, and now vice general manager of Zhangjiang Biotech & Pharmaceutical Company, talked with Chemistry World  about how Zhangjiang can succeed in attracting life science players. 

What beneficial policies do you adopt to attract life science researchers to your park?

There are more than 300 research-oriented companies in the life science park, including the R&D centres of eight of the world’s leading pharmas and a group of CROs [contract research organisations] serving them. But we hope to cultivate more original innovations by launching a new ’incubator’ (formally launched in late April) which can accommodate up to 90 start-ups. The rent for the first year will be exempted, the second year will be 50 per cent of the market price and third year is 50 per cent of the second year’s rent. In addition, we have purchased sophisticated devices worth more than 10 million yuan (US$1.5 million) - including various chromatography and spectrometry devices. Start-ups in the incubator can enjoy a 30 per cent price subsidy from the science park.

Besides this, like other research companies in Zhangjiang, those in the incubator can enjoy many tax breaks, including three-year exemption of the local personal income tax for senior researchers and management. [China’s revenues for personal income tax are shared between central and local governments].

Many local governments have offered benefits; how does Zhangjiang in Shanghai attract so many famous brands for research?

There are many reasons. Initially Roche had a manufacturing site in Zhangjiang so it naturally chose the same place for its R&D centre - China’s first among the big pharmas. Roche’s presence has also brought a group of internationally recognised CROs, which lures more pharmas such as Pfizer to come to Zhangjiang. 

Another reason is that Shanghai is the most westernised city in China; many local companies in Zhangjiang are launched by overseas returnees who like that culture. The efficient government services also play a role. 

How do you choose which companies will benefit and how do you judge when they are eligible to ’graduate’ from the incubator so that precious resources are not monopolised?

We have set up a committee including academics, technical experts from international R&D centres in Zhangjiang, established CROs and other experts like lawyers and senior marketing professionals. They will not only judge the science of the start-ups, but their market potential. 

The criteria for the graduation lie in that start-ups have developed to certain scale and the incubator is not enough for their business. Another criterion is they have successfully generated capital. Companies would like to grow as quickly to the extent that they would not always remain in the incubator. 

While experts from established companies are more capable of judging market potentials, there might be conflicts of interest between them and the start-ups they judge. How do you avoid this?

’Conflicts of interest’ in this sense need not be feared. In fact, small companies do not mind that they could be purchased by big competitors. On the other hand, experts from established companies that join the committee can also form start-ups in the incubator to cooperate with big firms, benefiting their development. 

In China, the import and transportation of chemical and biological materials have met difficulties. How do you help companies in your park overcome this?

It is true there is such difficulty. The process can be slow and can often influence research advances. The customs and import regulators worry about the potential harms of the biological materials, and lack understanding of the research fields.

As the science park managers, we try to behave as a bridge between government departments and companies in our park. For example, we have negotiated with the inspection and quarantine bureaus to choose 10 sample companies, including Roche’s R&D centres, to shorten the quarantine time from more than 30 working days to seven working days. The selection process is very cautious so that none of them will make any mistakes. With their good examples, the quarantine bureau could agree to expand the model. Eventually more businesses will benefit. 

In China, GMP (good manufacturing practice) facilities are required for new drugs, but most 

research-based start-ups do not have this capacity. How does Zhangjiang help them?

It is rather difficult for small research-based firms to have GMP facilities. We have helped companies to tackle their complaints. In fact, not only GMP, but also pilot scale development is difficult for small start-ups. For big molecule pharmaceutical development, this is particularly crucial. We have attracted several teams who used to work on bioprocessing for big pharmas to operate commercial pilot scale services for biologics in Zhangjiang, and our science park will subsidise start-ups to use them. The international financial crisis has helped us. Without it, it is difficult to attract people back to China. As part of our next step, the pilot scale services will be expanded to chemical drugs and traditional Chinese medicines.

With such a platform, it is easy for start-ups in our park to find collaborators to establish their GMP for new drug license.