SHANGHAI – Newly formed Just Biotherapeutics Inc., a vertically integrated biotech start-up with a focus on oncology and anti-infectives, has come to life in two places at once, setting up in both Seattle and Hangzhou. In doing so, it is putting an entirely new spin on the usual way of doing business between East and West.

"China is not just an add-on opportunity," Jonathan Y. Zhao, co-founder of Just Biotherapeutics (U.S.) and CEO of sister company Just Biotherapeutics China, told BioWorld Asia. "It becomes one of the must-win opportunities for the company and is at least 50 percent of the company's strategic focus."

That goes against the conventional path that many large pharmas have taken: developing drugs in more developed markets first before bringing them to China via the very slow imported drug pathway. It is also a departure from the more common form of cross-border partnering preferred by biotechs accustomed to licensing-in the China rights for advanced technology in development elsewhere. And while some Chinese firms have made inroads the other way, by licensing assets to the U.S. – recent deals include Innovent Biologics Inc.'s agreement with Eli Lilly and Co. and Jiangsu Hengrui Medicine Co. Ltd.'s partnership with Incyte Corp. – those types of transactions are less frequent.

It seems the last permutation to be tried of the East-West bridge model is to set up two sister companies – one in each country – to take advantage of the best of what both places have to offer from the outset. Just, however, is taking a multifaceted approach that relies on far more than China's low-cost structure; according to Zhao, the firm will be able to upend the received wisdom of the project management triangle, aiming to maximize cost without forsaking quality and speed.

"All the businesses I create are shooting for the same angle," said Zhao. "We believe that quality, cost and speed can go together."

Zhao is one of the four Just co-founders, as well as a venture partner at Lilly Asia Ventures, and he is responsible for setting up Just operations in China. He is also doing the same for another venture-backed U.S.-China hybrid, Veritas, which does affordable gene testing.

Lilly Asia Ventures, along with Merck & Co. Inc. and Arch Ventures, invested $15 million in Just's series A round, which closed in July.

While the China office officially launches next month, the 45-person U.S. team comes almost ready-made, having all worked for Amgen Inc. in the past, mostly before Amgen exited its Seattle site. Just describes its management team as representative of the most experienced and innovative group at Amgen in the field of protein science, process development and manufacturing.

Cutting-edge manufacturing

Although Just China has eight monoclonal antibodies in the pipeline – mostly innovative with a few biosimilars – what makes it stand out is the promise that the company will dramatically reduce the cost of biologic manufacturing and pass those savings to patients in emerging markets.

As its name implies, the company is motivated by a moral imperative and has made it an organizational mission to design and apply innovative technologies to expand global access to biotherapeutics. Making quality drugs affordable is its reason for being, Just said.

While biosimilars are often touted as a way to provide low-cost biologics to patients in emerging markets, Zhao noted that Just will focus on innovation, and he pointed to recent developments in the fields of immuno-oncology and anti-infectives, which have the greatest potential to make a difference in patients lives. "We think we can better use our capabilities and resources to generate cutting-edge biologic medicines to change the world," Zhao said.

Of course going after innovative molecules is risky, not to mention expensive. There are various ways Just is looking at keeping its costs down, mainly stemming from squeezing the most from its manufacturing investment.

The core technology for manufacturing and process development goes beyond steel tank suites and flexible GE facilities, to what Zhao called the first of its kind - a third-generation deployment technology. It can be moved around easily on the back of a truck, making it well suited to emerging market conditions, but perhaps more importantly, thanks to the firm's other innovations, it will be five times more efficient than leading Chinese biologic plants with expression that hits more than 10g per liter.

Not pointing to any single innovation, Just's approach relies on a series of interconnected technological breakthroughs to lower the cost of producing protein therapies, starting from the design of the molecule with its own software called Abacus.

In support of that manufacturing approach, Just recently received a $9.4 million grant from the Bill & Melinda Gates Foundation to develop sequence-optimized broadly neutralizing anti-HIV antibodies.

Also helping to keep manufacturing costs low is financial support from the Chinese government to set up facilities in the Hangzhou Economic and Technological Development Area, support for a greenfield investment that would be almost impossible to obtain for a start-up in the U.S.

"Our technology can reduce the cost but maintain the highest quality. On the financial side, we are leveraging government funding to alleviate the financial burden of the up-front fixed costs and capital expenses," Zhao said. "China provides the kind of support which allowed us to move the facility here."

Speed is another important factor for co-locating in China.

China encourages local manufacturing of innovative drugs, so "with a China-manufactured molecule you can hit the [China] market faster than if you import," said Zhao.

On the other hand, the FDA is less concerned with where a drug is made and more concerned that the manufacturing meets the required quality standards. If a China biologics facility can meet FDA and EMA standards, then it makes sense to use China as a manufacturing base to export drugs globally. Leveraging that regulatory asymmetry, Zhao said Just "can hit two birds with one stone."

"This will allow us to aim for simultaneous launch for drugs in China and globally," he said. "We are a truly global company but with different emphases. The U.S. team is focused on process development, preclinical and CMC to enable [investigational new drug application] filing, at which point [the U.S. team] will enter [a] phase I trial. They will then transfer the technology to China for clinical manufacturing, commercial supply and start China clinical development."