HK startup Aptorum casts wide net at biotech business

May 31, 2019 15:39
Although the reward can be huge, successful creation of a new drug could take more than a decade from development to approval. Photo: Reuters

A typical biotech startup is often founded by a scientist or researcher focusing on a highly specific area, but Aptorum spreads its business over a wide range of projects. Its boss, Ian Huen, studied economics and history, and has a career background in asset management.

Unorthodox in every sense, the Hong Kong-based, Nasdaq-listed venture plans to carve out a place in the pharma and biotech world, in its own way.

Asked how someone with no science or medical background can manage a team of experts, or decide where to invest, Huen responded with a quote from David Ogilvy: 

“If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But if each of us hires people who are bigger than we are, we shall become a company of giants.”

“I always hire people who are smarter than I am,” Huen noted. He has apparently banked on recruiting and relying on top talents to put Aptorum on the path to become a giant one day.

Huen drew this analogy. Many great Chinese emperors did not know anything about battle tactics, but with good, dependable generals, they were still able to conquer the enemies and build their kingdoms.

Huen may not know the intricacies of the drug discovery process, and he is certainly not the one to invent a cure, but he knows how to provide the right “soil” for specialists to do their jobs by creating a proper environment and ecosystem.

He would work out the goals, the resources allocation and timeline with his lieutenants and then leave the rest to them.

Over the past few years, Huen and his team have fostered a strong relationship with top-notch scientists from The University of Hong Kong and the Chinese University of Hong Kong, who became important sources of projects.

Aptorum acquires potential projects through licensing and then tries to advance them from proof-of-concept stage toward clinical trial and commercialization.

A lot of work is needed to prepare a drug candidate from universities for clinical trials, and this is where Aptorum comes in to fill the gap. Professors excel in research, but they do not necessarily have the acumen or appetite for running a business operation. Enter Aptorum to fill the void.

While Huen is no biotech expert, he knows how to get on with experts, both internally and externally, harness their strength and make things happen.

In the past, research findings in local colleges typically only served their academic purpose and then sat on the shelf to gather dust.

But in recent years, amid the government's push for technology and innovation to play a bigger role in Hong Kong’s economy, universities are becoming more forthcoming, which is good news for biotech firms.

“When there are new projects, they would usually approach and see if we would be interested,” said Dr. Thomas Lee, head of research and development. Lee overseas the screening and selection of projects.

At the moment, one of the flagship drugs the company is working on seeks to disarm a top killer germ – MRSA (Methicillin-resistant Staphylococcus aureus).

The traditional approach is more or less an arms race. When researchers find a way to stamp out the germs, they evolve at dizzying speeds, become stronger, and resist the antiviral drugs.

To outwit the germs, Aptorum adopts unconventional tactics – immunotherapy.

Under this project, Aptorum has licensed a series of compounds with HKU Professor KY Yuen, who played a key role in the discovery of the agent causing the Severe Acute Respiratory Syndrome virus, back in 2003.

What makes MRSA, responsible for many diseases such as pneumonia, so powerful and lethal is its protective shield.

Rather than trying to kill it with antibiotics, the project adopts a new approach: it aims to disable the ability of MRSA to create its golden protective shield so that our white blood cells, our body's natural immunity system, will then be able to destroy it.

Most biotech startups, in view of their founders' background and interests, are basically a bet on a single drug, hoping they can achieve a breakthrough, clear clinical trials and create a blockbuster product.

Huen, on the other hand, builds his company on a basic asset management concept – diversification.

Although the reward can be huge, successful creation of a new drug takes years from development to approval. It’s a risky venture with a long payback period. By investing in a portfolio of projects, the development risks can be much reduced.

While infectious diseases are its core concern, gastroenterology, the branch of medicine that deals with disorders of the digestive system, is also a big area for Aptorum. Other therapeutics projects cover neurology, oncology and the immune system. It also has a non-therapeutics line, working on surgical robotics and the provision of healthcare services.

The company has recently established a subsidiary to focus on drug repurposing, or finding new applications of existing, approved drugs, especially for orphan diseases. The safety profiles and well-established manufacturing processes represent a lower-risk approach for drug development.

An orphan disease is defined in the United States as one that affects fewer than 200,000 people nationwide. Approval of drugs for such disease does not require phase 3 clinical trial, the final and most expensive phase.

Why does Aptorum place so much emphasis on its infectious diseases drug platforms? The answer is to leverage Hong Kong’s unique research strength in this field, largely borne out of our long experience in fighting them.

For instance, since the warfare with SARS more than a decade ago, Hong Kong has been trying to keep at bay new threats from H7N9 and many other viruses that trigger outbreaks.

Hong Kong’ rich experience and deep talent pool in this area is also a key reason why Huen believes the city is well positioned to make it big in the biotech field.

Another beauty of biotech business is that disease is global, and so the market is also global, Huen pointed out.

“There is little chance we can create a Tencent, because our market size is limited. But biotech is different, it’s a global industry.”

As a financial hub, Hong Kong has gained prowess in sourcing capital, and this, in addition to strong academic research, is another key bullish factor.

Huen is hoping that with the growing awareness of its potential, the city's biotech sector could become stronger in the future.

A rising tide lifts all boats. Better development of the biotech industry in Hong Kong would be good for everybody in the business, and for the city, he said.

Biotech is not exactly the hottest sector in the local startup world right now, but will Aptorum be able to join the ranks of stars like Sensetime, GoGoVan and Lalamove and become another poster child for innovation?

We shall get the answer in the next few years.

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EJ Insight writer