China Medical City incubator attracts UK interest

High-tech center is helping to build a bridge as 'strong' complementarity between two countries points to potential for joint achievements

When China's first national-level medical high-tech incubator zone opened an office in London in May, it immediately attracted interest from British companies wanting to explore partnership opportunities.

A group of medical staff conduct research work inside China Medical City in Taizhou.

"Complementarity between China and the UK in the medical sector is so strong that the UK's cutting-edge medical technology and China's commercialization strength can jointly achieve significant advancement in the medical fields, and we are here to build this bridge," says Luke Zhou, who heads the office of China Medical City in the United Kingdom.

CMC is not yet a household name outside China, but those who have visited the incubator have been impressed with its scale and achievements during the past seven years, Zhou says.

Essentially, the incubator－in Taizhou, Zhejiang province－is a 30-square-kilometer area that houses offices, research centers and factories that host 700 medical companies, including big names such as Britain's AstraZeneca, Japan's Takeda and Germany's Boehringer-Ingelheim.

CMC's UK office, however, which goes by the name CMC-UK Incubator, has a more modest presence. The office in London is used regularly to host events that help British medical companies understand China's medical industry regulations, meet potential Chinese investors and prepare for long-term Chinese expansion.

The office does not have laboratory space: Essentially it is more of a virtual incubator and a knowledge-sharing platform.

"Often, British medical companies find it difficult to tackle China's medical market, due to unfamiliarity with the country's complex medical regulations, especially at a time when China is reforming those regulations," Zhou says. "So our London-based team can give hands-on advice to British businesses and connect them with experts in China."

So far, feedback from British medical companies has been positive. Susan Greenfield, co-founder of Oxford-based Neuro-Bio, says: "We have met some scientists in London, introduced to us by China Medical City's London team, and had some interesting preliminary discussions."

She said she hopes the CMC-UK Incubator platform will be able to help her team find Chinese partners who can help in the rapid screening of drug candidates and offer access to blood samples so the company can widen its studies.

Will Addison, founder of London-based Apta Biosciences, says his team may consider establishing a subsidiary at CMC's headquarters in Taizhou. He says CMC's established ecosystem, including its collection of life-science companies and talent, is highly attractive for international companies.

"We want to first enter China by finding a good partner, and, hopefully, we can do it at CMC," says Addison, who just returned from a visit to the special area in Taizhou.

CMC's UK expansion was praised by Jiang Sunan, minister counselor for science and technology at the Chinese embassy.

"China Medical City's expansion into the UK creates an important platform for Chinese and British companies to explore new business opportunities," Jiang says. "The two countries' complementarity in the medical and life-science sectors is immense."

Jiang notes that China's medical industry has grown quickly in recent years because of strong market demand and thanks to the Chinese government, which has offered vigorous support for research and development work within the sector.

"Government support creates a good environment for companies to develop and grow," Jiang says.

The strong government backing was a major reason the CMC attracted 700 medical companies during its first seven years, he says.

Established in 2010, CMC is the first government-backed national-level medical incubator to be established with the objective of attracting more international medical companies to commercialize and manufacture their products in China. It was set up through the joint efforts of several government agencies, including the Ministry of Technology, the Ministry of Health, the China Food and Drug Administration and the State Administration of Traditional Chinese Medicine.

Such strong government backing for CMC has huge implications for its member businesses. CMC's support team has been able to use its in-depth knowledge of China's medical regulations to help member businesses fill in regulatory approval documents in the right format and fulfill all relevant criteria to increase the speed and likelihood of approval.

British pharmaceutical giant AstraZeneca, for example, started building a $230 million (205 million euros; £179 million) factory inside the CMC in 2011. Construction of the new factory finished in 2014, and a few months later it received a GMP－good manufacturing practice－license that enabled it to transfer the production of four key drugs from its factory in Wuxi, Jiangsu province, to Taizhou.

Huang Bin, vice-president of AstraZeneca China, says CMC's support helped his team receive the license three to six months quicker than otherwise might have. Without CMC's help, the process would have taken longer because his team is less familiar with China's drug manufacturing license application processes.

"Time is money for us," Huang says. "Getting fast license approval translates directly into revenue."

AstraZeneca now produces hundreds of millions of pills a year at the factory, and will start exporting them to Europe this year.

By CMC's own estimates, it has helped medical companies reduce regulatory approval time by 60 to 90 percent, depending on the type of license sought. It says the fact that the China Food and Drug Administration, the Institute for Drug Control and the Medical Device Testing Institute all have offices within CMC means the process of inspecting CMC-based medical companies is quicker and easier to organize.

And the CMC's close partnership with China's medical regulators means it can play the role of a catalyst in enacting regulatory changes to better accommodate new products aimed at China, says Wang Linlin, director of the China Food and Drug Administration's branch at CMC.

For example, when Nestle wanted to manufacture food for special medical purposes－or FSMP－in China a few years ago, it was initially unable to, because regulations in China historically did not allow such production by foreign companies, Wang says.

FSMP food is often given to patients with special dietary requirements, such as those with impaired digestive function. The first batch of FSMP that Nestle will make in China, for example, will have a collection of thickening agents that make the food easier to swallow for stroke patients.

Wang's team at the administration worked with CMC staff and Nestle to create regulatory changes to ensure the possibility of FSMP manufacturing in China by foreign companies, and to guarantee the quality and safety of such food.

"We then worked with the National Development and Reform Commission to make FSMP an encouraged category of foreign investment to attract more investment in this area," she says.

Wang's team at CMC also supported Nestle's factory construction process, which began in 2015 and is set to be completed by the end of this year.

Having established a good record in helping international companies at its headquarters in Taizhou, CMC's UK expansion immediately attracted the attention of British companies. The office opening also comes at a time of strong UK-China collaboration in the life sciences.

In December, 11 China-UK healthcare deals with a total value exceeding 250 million pounds were signed in Shanghai, during the visit of Jeremy Hunt, Britain's secretary of state for health. In February, Alok Sharma, Britain's minister for Asia and the Pacific, led a delegation of UK healthcare companies to showcase technology in China.

Despite its advantages, CMC faces stiff competition from other science parks and incubators in China.

Suzhou Industrial Park, for example, hosts the British medical manufacturing company Smith & Nephew and British pharmaceutical giant GlaxoSmith Kline.

Meanwhile, critics have observed that CMC UK Incubator's lack of physical laboratory space could make collaboration difficult.

"Some life-science companies may wish to keep their core research and development team together, so CMC could improve their value proposition if they had physical lab space in the UK, where British companies can work with Chinese investors and partners who come to the UK," says Peter Crane, development officer of the Oxford-based accelerator Innovation Forum.

CMC-UK Incubator

・Industry: Life sciences

・Entered UK: 2017

・Address: Golden Cross House, 8 Duncannon Street, Charing Cross, London, WC2N 4JF

Parent company in China:

China Medical City

・Industry: Life sciences

・Founded: 2010

・Address: China Medical City Avenue, Taizhou City, China. Postcode: 225300