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After a long career in the United States dedicated to researching viral diseases, Wu Jinzi decided to go back to his native China to launch biotech firm Ascletis, listed on the Hong Kong exchange since July 2018. For Swissquote Magazine, he describes his surprising career path and the incredible potential of the Chinese healthcare market.
Why did you decide to leave the United States and come back to China in 2011?
At the time, I was vice president of HIV research at GlaxoSmithKline (GSK) in the United States. With my many years of experience in viral diseases, I knew that China had the largest population in the world affected by hepatitis C, for which there is no vaccine. There was a significant medical need that wasn’t being met, as well as a vast market: 25 million people have hepatitis C in China! So I decided to leave my job at GSK to create Ascletis and find a solution to this problem.
And did you succeed?
In June 2018, we put our first treatment, Danoprevir, on the market. It can cure 97% of people suffering from hepatitis C in 12 weeks. Comparatively, existing treatments have a success rate of 60% and take 12 to 18 months to take effect. So with Danoprevir we’ve made incredible progress. We’ve also just submitted an approval application to the Chinese government for another treatment for hepatitis C, and the cure rate is 99%.
In the medium term, we’re also testing an antibody called PDL1. The idea is to use it to strengthen T lymphocytes so that they can fight the hepatitis B virus more effectively. This disease affects even more people: 86 million people are affected chronically, and that’s just in China. There is no cure.
The bank JP Morgan predicted that the Chinese market for biological medicines – which your treatments are part of – would double by 2021, reaching $52 billion. Can you explain this expansion?
The incredible economic growth that China has seen over the past 30 years has given rise to a middle class that can spend money to purchase medicine. The education level of the population has also increased. Chinese people therefore understand the importance of taking care of their health and, at the same time, are more ready to spend part of their income to do so.
Who are your main competitors in this promising market?
US-based Gilead Science has several treatments for hepatitis B and C on the market or in development. But Danoprevir costs 30% less than Solvadi, a similar product that Gilead put on the market in November 2017. AbbVie, Merck and Roche are also researching hepatitis treatments. But we’re the only ones conducting clinical trials for this disease in China.
Do you have any advantages over your competitors?
Chinese patients gain access to new treatments years after patients in Western countries. The reason for this lag is simple: to approve a foreign drug in China, until very recently you had to redo all the clinical trials from phase I to phase III in China. The government didn’t recognise results obtained elsewhere due to ethnic differences. This procedure could take anywhere from five to 10 years. This policy ended in July, but approving a foreign drug in China still takes quite a long time. Since we’re conducting all our research here, we don’t have to deal with that obstacle.
Does the government support the pharmaceutical industry?
The “Made in China 2025” policy, announced in 2015, highlighted 10 particularly innovative sectors that get priority support from the government. Biotech is one of the 10. But as far as Ascletis is concerned, we haven’t received any subsidies. Our research is funded entirely by investors. However, we benefit from measures put in place by the government to accelerate the approval of clinical trials and drugs. Several biological drugs (“biologics”) were added to the list of treatments reimbursed by the state starting in 2015, and we benefit from that as well.
What are the main challenges for a biotech company targeting the Chinese market?
The population’s average income is still relatively low. That forces companies to set the market price rather low for their drugs. This is an issue because biologics like ours are extremely costly to develop. Fortunately, clinical trials are much less expensive to run in China compared to the Western world. That helps us keep our costs under control. We’re 30% cheaper than our Western competition.
You decided to go public on the Hong Kong exchange in July last year. Why didn’t you choose an exchange located in continental China?
Hong Kong has the advantage of being focused on the Chinese market while also keeping an international perspective, which guarantees access to foreign investors. The exchange also went through an ambitious reform in April 2018 to allow innovative pharmaceutical companies to go public, even if they had no revenue. We were the first company to benefit from this new reform.
How’s your share price doing?
Not too well, unfortunately! It’s been going up and down these past few months. But that’s not out of the ordinary for a biotech company.
In the late 1980s, Wu Jinzi left his home country to pursue oncology studies at the University of Arizona. Upon receiving his PhD, he began his career with various positions at Hoechst Marion Roussel (now Aventis), Novartis and Immunex, which is now owned by Amgen. In 2004, he became the vice president of preclinical research at Canadian firm Ambrilia Biopharma, then joined GlaxoSmithKline in 2008. Like many other Chinese entrepreneurs, known as “sea turtles” because of their migratory career paths, he decided in 2011 at the age of 55 to return to China and create biotech company Ascletis. He benefits from the “Thousand Talents” programme implemented by the Chinese government to bring home the most promising talents via subsidies and support for their entrepreneurial projects.