In recent years, both the international and Chinese media have been inundated with Chinese claims of progress in stem cell research. The media is not alone in its notice of China's stem cell work. Chinese scientists are publishing increasing numbers of stem cell manuscripts in international peer reviewed journals, and in November, 2007, Shanghai played host to more than 500 scientists from 20 countries during the International Symposium on Stem Cell Research, the first conference co-sponsored by the International Society for Stem Cell Research.
These advances and the associated global attention arise from a number of advantages China has in the field of stem cell research (see box). Among them, flexible regulatory environment, ready access to embryos and ease of bringing stem cells into the clinic are particularly key to success. These and the other strengths listed below, however, are tempered by a few weaknesses. Poor coordination of stem cell research efforts, both at a national and a lab-to-lab level, results in inefficiently duplicative research. Similarly, despite government funding, private funds in the form of venture capital still fall short of international standards. Overall, though, China looks to be well positioned to play an important role in the emerging stem cell industry.
Characteristics of the Chinese Stem Cell Industry
Strengths
•Government funding and support
•Flexible regulation and public acceptance
•Ease of access to embryos
•Returnee scientists
•Cheaper labor and material costs
•Large patient populations
•Faster track to clinical application
Weaknesses
•Lack of venture capital
•Weak link between research and commercialization
•Lack of coordination and cooperation among researchers
•Immature peer review system
Funding
A number of sources focused both on research and commercialization are currently available to those engaged in the stem cell and regenerative medicine sector. The central government contributes funding through the MOST's 863 and 973 Programs. Provincial and local governments, such as in Beijing and Shanghai, have provided matching funds. The UK Stem Cell Initiative projects that from 2006-2011 government funding will further increase, with the Ministry of Science and Technology alone expected to contribute RMB 500 million to RMB 2 billion. The ministry has already announced that it will dramatically increase 863 funding for stem cell research from RMB 110 million (during 2001-2006) to RMB 200 million (during 2006-2011). According to Science, there have even been talks of establishing a RMB 1 billion national stem cell center, though MOST declined to confirm the project when contacted by GBI.
Despite this strong showing, it is worth noting that the sum total of this government funding still pales in comparison with state funding provided by California alone, which has pledged $3 billion over 10 years towards stem cell research. Additionally, and perhaps more importantly, foreign investment in the umbilical cord bank stem cell subsector has been banned by the National Development and Reform Commission's December regulation The 2007 Foreign Investment Industrial Guidance Catalogue. This move in part limits how multinational investors may act in this arena.
Commercialization
Commercial enterprises are engaged in four main areas relating to stem cells: umbilical cord blood storage, technology platforms, clinical therapies, and research tools and services.
Umbilical cord blood banks
Over the past several years, more than 12 stem cell banks for umbilical cord blood storage have been established in China. Tianjin's bank, run by StemGene, is now the largest in the world, boasting storage of 100,000 samples. All umbilical cord blood banks in China operate on a combined model of public/private service, providing free storage of donated umbilical cord blood and paid storage for private samples: the fee for storage can run into thousands of dollars. This segment is expanding rapidly and is favored by investors attracted by relatively high entry barriers (in the form of licensing), profitability, and strong growth.
Technology platform companies
Most stem cell technology platform companies in China are closely affiliated with key research institutions. As such, these firms are well positioned to commercialize new discoveries of associated research institutions. Among the stem cell sector, though, platform companies are having much difficulty establishing profitable business models. Financing from licensing, production of stem cell-based drugs and IPOs via capital markets has proven difficult to come by. High burn rates have prevented most of these companies from covering costs with operational cash flow, but some have succeeded in funding stem cell-related projects with profit from endeavors in other areas, such as stem cell services. SinoCells Biotechnologies, for instance, partly funds its R&D through the sales of harvested stem cells for research and clinical applications to clients.
Clinical applications
Stem cells are currently allowed to enter the clinic as a treatment technology in China. With a much less stringent regulatory environment for clinical treatments than in the West, China is making headway in stem cell medical procedures. Chinese physicians have begun treating patients for conditions including spinal cord injury, brain injury, and diabetes. At Huashan Hospital, for example, leading neurosurgeon Jianhong Zhu conducted groundbreaking work with adult stem cell therapy for patients suffering from brain injury. His work was published by The New England Journal of Medicine and won international acclaim. Not all stem cell work, however, is as well regarded as Zhu's. Many physicians and institutions engaged in stem cell therapy are under pressure as international and domestic critics question unproven safety and efficacy. Nonetheless, since stem cell therapy remains the only apparent treatment option for conditions such as spinal cord injury, many international patients still come to China seeking this treatment. Beike, a Shenzhen biotech company, has profited from this patient flow by acting as an intermediary between patients and a network of hospitals providing stem cell therapy. Jilin University TongYuan Engineering Co/Silicon Valley Hospital, a joint venture between China and the Ukraine, has also been engaged in stem cell therapies.
The availability of stem cell treatment may soon change in China. A new regulation, the Directive on Clinical Application of Medical Technology issued by the Ministry of Health, is currently under discussion. If passed, it will soon tighten the regulatory environment by classifying stem cell therapy as a highly regulated Class III medical technology. Institutions would need to be approved or licensed by the MOH before conducting stem cell procedures. Though it was expected to be in force by the end of 2007, the regulation remains under discussion as of February 2008. The relatively slow progress may be a sign that various stakeholders have yet to reach agreement.
While companies which have made the leap to using stem cells in patients as a treatment technology, there are a number of institutes and institute spin-offs which are putting stem cell treatments through the SFDA regulatory approval process. At least eight stem cell therapies are currently under evaluation by the SFDA as part of new drug applications on behalf of Chinese companies.
Research tools and services
Stem cell research instrument and service companies occupy a niche market by providing stem cell lines, stem cell cultivation medium, stem cell preservation reagents for research and clinical applications as well as research services for clients. The prospects of these firms depend on general investment into stem cell research. With funding expected to increase in the future, these prospects are good. Service companies may have clients both domestically and overseas, but instrument companies focus mainly on the domestic market. In recent years bio-service businesses have been flourishing in China, and this trend is expected to translate to the stem cell bio-services sub-sector as China has not only a cheaper cost structure but also more freedom of operation and easier access to embryos, eggs and primates.
International Cooperation
With increasing recognition of China's stem cell capabilities, several forms of international cooperation have emerged in this sector. At the institutional level, examples include Monash University and Peking University, which established a joint research center to investigate regenerative medicine. On the clinical level, Dr. Wise Young of the University of Connecticut is currently spearheading a spinal cord injury trial, the infrastructure of which may have lasting value as a base for conducting further clinical trials related to stem cells. Finally, at the corporate level, collaboration exists as well. Sanofi-Aventis has signed a sponsored research agreement with the Chinese Academy of Medical Sciences in the field of cancer stem cells. Additionally Wincon Theracells has obtained multiple research contracts with U.S. partners. This flurry of activity on multiple horizons highlights China's emergence in the world of stem cells.
Conclusion
China's active stem cell basic and clinical research provides opportunities for the outside world. The relatively flexible regulatory environment and easier access to stem cell sources provides a freedom of operation unavailable elsewhere. Cost benefits across a range of measures are undeniable. Technical expertise is manifest, and the patient population is large and accessible. Numerous collaborations are ongoing between Chinese researchers and scientists worldwide.
At the same time, ethical concerns, regulatory backlash, patient outcries, and quality and scale problems certainly present real and growing risks to growth. Nevertheless China has made tangible contributions to the stem cell field and will continue to play an important role in the development of this potentially revolutionary technology.
Written by Matthew Chervenak, General Biologic
Reprinted with the permission of the original publisher, BioWorld Today (www.bioworld.com), & the producer, General Biologic (www.generalbiologic.com), from the China Biotech 2009 market report.
See Original Article, Please Click Here |
