What should be the anchor for Hong Kong’s biotech development?

Stephen Wong, Kenny Shui February 09, 2022 11:23

At Our Hong Kong Foundation’s (OHKF’s) Healthcare Research Report Launch held in December 2021, Chief Executive (CE) Mrs Carrie Lam made it explicit that biotech research and development plays a pivotal role in Hong Kong’s continuous provision of quality medical care. She also reiterated the measures raised in Policy Address 2021 to groom the city’s life and health sciences R&D, spanning infrastructure construction and supply chain optimization. In fact, biotech had already been identified as one of the four key areas for Hong Kong’s innovation and technology industry back in 2018, yet relevant policies have not been in force, rendering the advocacy a pie in the sky.

For this time, besides implementing the aforementioned measures, the CE has also recently met with over 10 leading global pharmaceutical companies, exploring innovative land policies to invite them to expand into Hong Kong. All such attempts have well-boosted the sector’s confidence in the government’s commitment. Hong Kong’s economic development has now reached a bottleneck, and we really hope that the government can truly change tack – instead of a laissez-faire approach to the economy, potential industries should be identified and supported. Industrial policies should be enacted to nurture the city’s biotech industrial cluster, thereby allowing all Hong Kong people to share the fruit of growth.

Singapore and Greater Boston: Scientific institutions as anchors

That said, the government must adopt comprehensive planning and formulate innovative strategies to minimize the possibility of wasting public resources. To achieve so, OHKF released a research report on biotech development in July 2021, calling for collaboration between Hong Kong and Shenzhen by leveraging the synergistic effects of the Loop. We suggested the government support the establishment of anchor institutions in the Loop to foster the formation of a biotech industrial cluster. We are pleased that some of our recommendations have been accepted by the government and relevant parties.

Anchor institutions are common in both mainland and foreign successful biotech clusters. Encompassing 8 pharmaceutical companies among the global top 10, one of the major factors behind Singapore’s success lies in the government’s establishment of top-notch biotech research centres in Biopolis. After the construction of the Biopolis science park in 2003, 10 research centres were set up to conduct applied research alongside collaborations with neighbouring universities and hospitals. Prestigious overseas scientists were also invited to spearhead the development. Such moves successfully attracted multiple enterprises to establish a foothold in Singapore and conduct research through public-private collaboration. In fact, back in 2005, after 5 research centres were set up in Biopolis, leading enterprises such as GSK and Novartis had already been attracted to establish a presence in the park.

As for the USA, Greater Boston is the country’s top cluster spot for life sciences. A cross-institutional and cross-disciplinary biotech mega research institute was set up to strengthen the country’s scientific research capability and facilitate commercialization of research outputs. Housing Harvard University and MIT, Greater Boston sees Kendall Square as the exchange centre of industry resources, where the two universities set up the Broad Institute in 2004 to integrate previously ongoing scientific research collaborations and have achieved stellar scientific research results. The two universities continue to work with enterprises such as Microsoft, Google, Biogen and Novo Nordisk.

Shanghai: leading enterprises as anchors

In Mainland China, biotech clusters are mostly situated in the Beijing-Tianjin-Hebei Region and Yangtze River Delta. Crowned as China’s “medicine valley”, Shanghai’s Zhangjiang Hi-Tech Park houses 7 pharmaceutical companies among the global top 10. At the outset, leading enterprises were drawn there as the anchor before supporting facilities and scientific research resources were provided. When the Park had completed construction in 1992, scientific research resources were still limited, yet the government successfully attracted Roche, a leading pharmaceutical enterprise, to set foot in the park in 1994. It was not until then that auxiliary facilities were completed with planning strategies and documents released, so as to accommodate the needs of the enterprise. Roche did not disappoint by raking in USD 300 million in annual revenue in 2003 and establishing 6 joint ventures and a sole proprietorship.

Leading enterprises in need for Hong Kong’s development of anchor institutions

As mentioned, the Hong Kong government and Hong Kong Science and Technology Parks Corporation (HKSTP) have put forward quite a number of innovative measures for biotech industry development last year. The most widely known measure is to set up the InnoLife Healthtech Hub in the Loop as stated in the Policy Address, aiming to bring together the city’s state key laboratories (SKLs) and Health@InnoHK laboratories to conduct biotech research across 6 disciplines. We are pleased that our recommendations raised in OHKF’s biotech report have fostered the establishment of this cross-institutional and cross-disciplinary biotech mega research institute. Akin to Broad Institute, InnoLife Healthtech Hub is expected to truly converge the competence of various prime local universities in basic research and applied research. It should pursue frontier scientific research and solve regional problems through cross-disciplinary research tools, thereby becoming an anchor institution that can attract enterprises to collaborate and set foot in the city.

While the design of InnoLife Healthtech Hub follows the development model of Greater Boston, the Institute for Translational Research (ITR) founded by HKSTP in October 2021 mirrors the research centres in Singapore. Led by Professor John Kao, the consultant for OHKF’s biotech research report, ITR integrates the previous scientific research resources of the Biomedical Technology (BMT) cluster of HKSTP, aiming to help translate research into application. Practically speaking, ITR plans to align with universities, offer entrepreneurship training, nurture translational research capability and offer opportunities for clinical trials to help prime local universities commercialize their scientific research products.

Beyond fully unleashing the potential of local institutions in scientific research, we believe that attracting leading enterprises to be anchor institutions is a crucial step in biotech development. With their abundant scientific research resources and strong commercialization capability, not only do leading enterprises create demand for scientific research in universities, but they can also bring frontier research experience to the region where they establish their business, and nurture countless start-ups, as best exemplified by how Roche impacted Shanghai’s Zhangjiang Hi-Tech Park.

We truly hope that the government will have the right industry and the right enterprise – to promptly attract leading enterprises capable of creating massive spillover effects to the local biotech industry to establish a bridgehead in Hong Kong.

To achieve so, the government should commit resources and formulate innovative policies to draw businesses and capital by trying its best to fulfil the development needs of enterprises under reasonable circumstances. It may consider recommendations raised by OHKF, including tax incentives and innovative land policies, so as to lead Hong Kong to embark on a voyage of biotech advances.

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Stephen Wong, Kenny Shui

Stephen Wong, Senior Vice President and Executive Director of Public Policy Institute, Our Hong Kong Foundation. Kenny Shui, Assistant Research Director, Our Hong Kong Foundation