Leveraging China's Speedier Development and Big Market
Unlike Ascletis, Epitomics was established in the U.S. in 2001, only to begin expanding a few years later into China. It operates a wholly owned subsidiary in Hangzhou where 200 employees are based, of which about 150 are researchers. There, Epitomics produces antibodies using its RabMAb® (rabbit monoclonal antibody) technology. Epitomics says RabMAb as well as its Mutation Lineage Guided method for humanizing antibiodies produces superior binding affinity and bioactivity in a variety of assays.
Dr. Yu also has his own laboratories at CMC. He persuaded the city to pay the roughly $15 million cost of developing a clinical materials GMP manufacturing facility for making protein drugs plus an R&D facility or “antibody innovation center” equipped with RMB 35 million (roughly $5.45 million) worth of equipment.
In return, Dr. Yu agreed to manage the facilities and establish another company there, the Jiangsu T-mab BioPharma. The firm has some 60 employees and holds Chinese development rights to an undisclosed number of RabMAb programs.
“The government put up a lot of money to build those facilities, which a small company like ours would not otherwise be able to afford,” Dr. Yu pointed out. “We have a pipeline of six protein drugs, and at the same time we do CRO or CMO [contract manufacturing] for people to make clinical materials.”
Why did Epitomics seek to expand into China? Dr. Yu said it was not for the reason most often cited when U.S. companies gain a foothold there. “Cost was our second reason,” he recalled. “Our main reason was actually speed. We develop antibodies and we have a lot of competitors. We were small. We couldn’t make antibodies fast enough, so I wanted to build a tech facility and a team that would, as I call it, industrialize the process.”
Speed also explains why Epitomics is pursuing trials in China with a pair of China-based companies that are publicly traded in the U.S. Later this year, Epitomics plans to team up with Simcere Pharmaceutical on a Phase I trial of an antivascular endothelial growth factor (VEGF) antibody, believed to inhibit formation of new blood vessels in cancer tumors. “We expect to receive the government certificate for entering Phase I this year,” Dr. Yu said.
Epitomics and 3SBio expect to file an IND application in China “either at the end of this year or early next year” for an antitumor necrosis factor (anti-TNF) antibody, expected to stop inflammatory diseases such as rheumatoid arthritis, Dr. Yu added.
Looking ahead, Dr. Yu reported plans to continue the company’s expansion into diagnostics by building facilities in China as well as the GMP lab in Burlingame: “The Chinese population makes for a very attractive market, and we’re also venturing into that anyway in the U.S.”
The company made news July 26 when it announced it had launched 23 cancer-related antibodies developed through a partnership with the NCI’s Center for Cancer Research. The collaboration aims to develop new reagents for cancer researchers.
With its catalog already at 2,500 antibodies and increasing, Epitomics has grown at about 35% per year and has been profitable every year since 2008. Dr. Yu said the company generates $20 million to $30 million in annual revenue but wouldn’t be more specific.
Epitomics raised $30 million during its first decade in business and is in the process of filing an IPO on the Taiwan Stock Exchange. Required filings are expected to be completed by September. The amount to be raised through the IPO has yet to be determined.
Intent on generating some business in China for stateside biotechs, the Commercial Service of the U.S. Department of Commerce is recruiting U.S. companies for a Biotech Life Sciences Trade Mission to China that will run between October 14 and 18. Francisco J. Sánchez, under secretary of commerce for international trade, will lead the trade mission, during which leaders of the U.S. businesses will meet decision-makers from the government of China as well as prescreened and qualified potential partners. Participants will also network and attend briefings by ranking U.S. Embassy officials and biotechnology industry experts.
Valuable as that effort is, there’s no reason why Washington shouldn’t also pursue what promises to be an even better path to growing biotechnology in the U.S.—namely following Hamner’s path and working to marry fast-growing Chinese companies with stateside partners, both commercial and academic.
If nothing else, such an effort holds potential for being a successful example, so uncommon these days, of how the U.S. can still gain jobs in a biotechnology industry that increasingly is becoming more global.