Small biotechnology company executives who traveled to China andJapan recently seeking financial backing said they succeeded insetting up a network of contacts, but found their Asian hostsreluctant to invest in early-stage drug development.

The Chinese, the American executives said, don't have the scientificexperience to support biotechnology research while the Japanesemade it clear that not all DNA-based technology is welcome.

Twenty U.S. biotechnology companies participated in the 10-daypartnering mission in November, which was organized by theBiotechnology Industry Organization (BIO) with assistance from theU.S. Department of Commerce.

Carl Feldbaum, president of BIO in Washington, said the Chinaportion of the trip was designed to introduce the Americans to thecountry's government officials while the visit to Japan enabled theexecutives to make full-fledged presentations to majorpharmaceutical companies and venture capitalists.

Jui-Lien Li, chief operating officer of San Diego-based Canji Inc.,said the Chinese officials were excited about the possibilities ofrecombinant DNA technology, gene therapy and other advancedresearch efforts, but the country has very little biotechnologyinfrastructure.

"Their research is very basic," she said. "There's a 10- to 15-yeargap between China's level of research and the U.S. Their majorinterest is in getting a big pharmaceutical company to come in andset up manufacturing operations."

Hong Kong has two new sophisticated research institutions thatcould provide possibilities for collaborations, but Hong Kongbusiness investors, Li said, mostly were interested in talking aboutprojects that would yield them a financial return in six to 12 months.

"I think Hong Kong is a stepping stone to China in the future," sheobserved.

Stephen Williams of Athens, Ohio-based Progenitor Inc., said theJapanese pharmaceutical representatives and investors listenedintently to the presentations, but made it clear they had philosophicalreservations about some technologies, such as cell and gene therapiesthat used viral vectors to integrate genes into the human genome.

The biggest hit with the Japanese, Williams said, seemed to be theAmerican combinatorial chemistry companies.

"The Japanese are not ready for gene therapy," Li said, adding thatthey expressed safety and ethical concerns about such geneticengineering techniques. "They want to wait and see how safe andeffective it is in the U.S."

Steve Reese, of Immulogic Pharmaceutical Corp. in Waltham, Mass.,apparently generated more attention among Japanese pharmaceuticalfirms than Canji and Progenitor, both of which are gene therapycompanies.

Immulogic focuses on peptide immunotherapies targeting allergiesand autoimmune diseases. Reese, who is vice president of marketingand business development, said his first-day presentations werepacked and he had a full slate of one-on-one follow-up meetings thesecond day with representatives of the Japanese firms.

"Most of the Japanese executives who attended were mid-levellicensing and scientific analysts from pharmaceutical companies," hesaid. Reese noted that the informal discussions generated thepossibility of future deals and he has continued talks with some ofhis new Japanese contacts since returning to Massachusetts.

As for Japanese venture capitalists, Li said, they showed littleenthusiasm for supporting start-up research firms and there are veryfew Japanese-based biotechnology companies.

"The Japanese are vary cautious," she said. "Most venture capitaliststhink biotechnology is America's business and they're moreinterested in electronics and communications," she added.

In general, Li observed, working with Asian companies andinvestors will take time, which is where she believes the networkingwill pay off, especially in Japan.

"They [Asians] know the technology they need and they eventuallywill jump in," she said. n

-- Charles Craig

(c) 1997 American Health Consultants. All rights reserved.