from research to revenue iv: capturing business opportunities in asia
DESCRIPTION
A full collection of the presentations made Wednesday, December 3, 2008 at Mississauga Living Arts Centre for From Research to Revenue IV: Capturing Business Opportunities in Asia.TRANSCRIPT
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
THANKS TO OUR SUPPORTERS
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
Outsourcing in AsiaOutsourcing in AsiaMadhav Murti, PricewaterhouseCoopers LLPMadhav Murti, PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
The changing dynamics of pharma outsourcing in Asia:
Are you readjusting your sights?
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Introduction
PwCGlobal Sourcing Advisory
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Agenda
1. Introduction
2. Strategic context of outsourcing and location decisions in Asia
3. Moving up the value chain: the changing nature of pharma outsourcing in Asia
4. Evaluating the landscape: the location context for outsourcing decisions
5. Looking ahead
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Strategic context of outsourcing and location decisions in Asia
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Cluster One – Pharma Revenue Constraints
Patent expiry• In 2006 > 90% of Big Pharma’s total revenues were from medicines that
had been on the market > 5 years. Expiry of patents related to many of these products could result in significant erosion of revenues (estimated around $157 billion)
Need for R&D productivity• The industry has invested twice as much in R&D in 2006 as it was a
decade earlier but only producing two – fifths of the medicines it then produced
Pricing Pressures in healthcare markets
Quest for improved margins and growth
1
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Cluster Two – Asia growth focus
Growth in Asian pharma markets• China and India pharma markets are experiencing annual growth of 10 -
15% and are expected to grow to about 150% and 90% respectively of US market
Growth in Asian pharma manufacturing capability• Asian Contract Manufacturing Organizations (CMO) are expected to
account for about 15% of the total CMO market by 2010.
• Rapid maturity with increase in FDA approvals and GMP certification
• Attractive cost arbitrage on manufacturing operations
Growth in Asian Scientific Resource Base and Capabilities
Growth in Patient Pool• Asia accounts for > 60% of the world’s population
• Vast clinical trial pool offers significant cost savings as well as reduction in patient enrolment time
2
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Cluster Three – East/West convergence/divergence trends
Intellectual Property & Legal Landscape• Though much needs to be done, IP protection and rights are increasingly
improving in certain Asian countries
Clinical Trials and pharma regulation• Regulatory delays and complexities can hinder the development of clinical
trials
East/West disease profiles• On the one hand, variations in disease profiles due to differences in ethnic
origin, diet and environmental factors, yet• On the other, reduction in divergence due to urbanization and
convergence of tastes and lifestyles between the East & West
Escalation in Labour and other overhead costs
3
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Cluster Four – Technological/business model forces
Need for more advanced/flexible manufacturing• Development and evolution of new products will drive demands for newer
technology and a more sophisticated manufacturing environment
Closing the gap between R&D, manufacturing and patients• Need and desire to close the gaps within the pharma value chain will
impact the decisions on location and sourcing model options
Blurring of assessment of Core vs Non Core activities• Opportunity to tap into external skills to accelerate own capabilities will
expand the scale and scope of what can be outsourced• Third party models evolve rapidly to more collaborative ‘partnership’ focus
Networked Business Models• Pharma business model moving away from fully integrated operations to a
networks of collaboration and discovery (Eli Lilly – FIPCO to FIPNET)
4
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Moving up the value chain: the changing nature of pharma outsourcing in Asia
The trend towards high end innovation:
• from late stage clinical trials and low cost manufacturing
• moving up the value chain: facilitated by the evolution in IP protection
•Risk based deals :Eli Lilly with Nicolas Piramal, Suven Pharma, Hutchinson MediPharma
• “in-sourcing” (Eli Lilly, GSK, Astra Zeneca)
• researched-based partnerships between pharma companies (Merck- Advinus Therapeutics, Ranbaxy, Dr.Reddy’s)
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Moving up the value chain
Rapid expansion of clinical trials in Asia
•India 2003: 40 – 50 clinical trials
2007: 270 clinical trials
2008: completed 737 clinical trials
•China 2008: completed 870 clinical trials
Drivers:
- cost
- IPP improvement
- “treatment naïve” patients
- recruit more quickly from a smaller number of sites
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Moving up the value chain
Manufacturing scales up
• cost: India 50% cheaper than west
• large pool of qualified talent to run manufacturing plants
- India:
> 100 FDA approved facilities
- China:
> source of APIs shipped globally
> first FDA approved site for finished drug
> increased effort of SFDA
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Moving up the value chain
Manufacturing scales up
David Brennan, CEO AstraZeneca:
“all active pharmaceutical ingredients will be produced externally within a decade as part of the strategy of maximizing the efficiency of our supply chain while maintaining the highest possible standards of quality and security of supply.”*
AstraZeneca plans to increase its outsourcing drastically from China and India. The firm has set up a dedicated sourcing centre in Shanghai.
*Financial Times, 16 April 2008
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Evaluating the landscape: the location context for outsourcing decisions
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Evaluating the landscape: the location context for outsourcing decisions
Outsourcing index – ranking of Asian territories across all factors
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Evaluating the landscape: the location context for outsourcing decisions
Cost ranking of Asian territories
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Evaluating the landscape: the location context for outsourcing decisions
Risk ranking of Asian territories
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Evaluating the landscape: the location context for outsourcing decisions
Market Opportunity ranking of Asian territories
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Looking ahead
• China & India spearhead growth in Asian pharma
• Singapore will maintain position as centre for research and innovation
• China, India and Singapore remain hotspots with Korea and Taiwan becoming increasingly significant
• Outsourcing will continue to move up the value chain
• As pharma investments in Asia grow: high end drug discovery in Asia plays a more important role
• Insourcing preferred model for higher end activities, complemented by strategic partnerships
• No “one size fits all” => mixed approach
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Looking ahead
“For us, China is not about outsourcing and cheap labour…It’s about different science…Within 5 to 10 years we will be moving from 'made in China’ to ‘discovered in China’”
Moncef Slaoui
Chairman of Research and Development, GlaxoSmithKline
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Sourcing Decisions in times of uncertainty and turmoil
Even in the best of times outsourcing solutions require careful planning and structuring to deliver full value. The temptation now is to move quickly to extract additional value.
But, in the face of growing economic uncertainty and increasing market complexity, programmes demand a higher level of scrutiny and focus
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Buy Side Organizations look to downscale/ cancel
current outsourcing commitments
Buy Side Organizations look to rapidly reduce
scale/cost of insourced commitments
Market volatility continues (Currency
fluctuations, Stock Price movements)
Economic slowdown inhibits organizational
ability to sustain growth & improvement
initiatives
Issue• Service Providers faced with weak
financial leverage due to excess capacity and high fixed cost levels
• Service Provider business model/ operational plans/ability at risk
• Captive Operations become attractive options for acquisitions
• Business Case strengthens for variabilizing fixed costs
• Currency hedging becomes a prominent part of deal structuring and economics
• Emergence of new attractive supply side locations due to weakening of local currencies and increased availability of resources
• Higher risk profile of Alternate Sourcing arrangements
Potential Impact Opportunities/ChallengesBuy Side• Negotiation/Renegotiation of
additional benefits ( incremental cost impact, leverage capacity etc.)
• Need for additional rigor in service provider evaluation/selection
• Potential to accelerate time to benefit• Higher level of risk assessment on
service provider business viability
Sell Side• Retention of resource bench in face of
uncertain demand• Negotiation/Renegotiation of deals to
offset capacity and leverage issues• Expansion of footprint into emerging
supply side locations• Consolidation of Service Providers
Fig 1 – PwC Analysis
Source: Sourcing decisions during economic downturns, PwC Point of View Dec 2008
Key areas for consideration
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Current market conditions expose new opportunities to reap significant financial and non financial benefits from alternate sourcing arrangements even in the face of market turmoil.
Organizations would be well served to explore these opportunities in their strategic context and develop appropriate sourcing strategies that consider both short and long-term implications.
Increased market complexity and risk are clear concerns requiring careful consideration and sharp focus, but they should not stop organizations from taking action that could build business flexibility and accelerate competitive advantage on the up-side of an economic recovery.
CONCLUSION
Source: Sourcing decisions during economic downturns, PwC Point of View Dec 2008
PricewaterhouseCoopers LLP Changing dynamics of Pharma Outsourcing in Asia
Thank you
The changing dynamics of pharma outsourcing in Asia:
Are you readjusting your sights?
Madhav Murti
Vice President - Global Sourcing Advisory
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
Analysis of Asian MarketsAnalysis of Asian MarketsModerator: Gail Garland, Axela Inc.Sarah Frew, McLaughlin - Rotman Centre for Global HealthPaul Stinson, CAPRA InternationalRon Choudhury, Aird & Berlis LLPHadi Salah, Frost & Sullivan
Moderator: Gail Garland, Axela Inc.Sarah Frew, McLaughlin - Rotman Centre for Global HealthPaul Stinson, CAPRA InternationalRon Choudhury, Aird & Berlis LLPHadi Salah, Frost & Sullivan
December 3rd, 2008© Frost & Sullivan
APAC? Why should I care?
Customer Base: • 54% of the world’s population• Unprecedented population growth• Growing aging population
Revenue Potential:• 33% of the world’s GDP• Increasing affluence• Estimated $889.1 billion total healthcare market (2008)
December 3rd, 2008© Frost & Sullivan
Key Healthcare Market Segments
Healthcare
Pharmaceuticals
Biotechnology
Medical devices
Diagnostics
Healthcare ITPatient care
Clinical research
Contract research/outsourcing
December 3rd, 2008© Frost & Sullivan
India: Economic Trends
• One of the fastest growing economies in the world
• Third largest economy in Asia, after Japan and China
• Growing at 7-10% per year (2004-2007), GDP expected to reach $1.45 billion by 2010 (CAGR of 13.1% from 2000-2010)
• Per capita income increasing (currently at $5)
• Inflation is stable at 3.8-4.6%
December 3rd, 2008© Frost & Sullivan
India: Pharmaceuticals Market Segment
0
2
4
6
8
10
12
14
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mark
et
Siz
e (
$ B
illio
n)
December 3rd, 2008© Frost & Sullivan
India: Biotechnology Market Segment
0
1
2
3
4
5
6
7
8
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mark
et
Siz
e (
$ B
illio
n)
December 3rd, 2008© Frost & Sullivan
Investment in India: Drivers and RestraintsR
estr
ain
tsD
rive
rs
High
Med
Low
Low
Med
High
Low cost of
production
* Length of arrow indicates relative impact
Low cost man
power, strong
scientific base
and talent
Low healthcare
per capita
spending
Highly
fragmented
market
Government
incentives
Entry of large
global pharma
firms
Rural penetration
potential
Emerging APAC
healthcare hubs
December 3rd, 2008© Frost & Sullivan
China: Economic Trends
• Fourth largest economy in the world, after the US, Japan, and Germany
• Annual growth rate estimated at 8% (2006-2010)
• Healthcare industry is seventh largest in the world
• High per capita healthcare spending relative to India ($20 vs $5), low relative to developed nations ($700 for US)
December 3rd, 2008© Frost & Sullivan
China: Pharmaceuticals Market Segment
0
10
20
30
40
50
60
70
80
90
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mark
et
Siz
e (
$ B
illio
n)
December 3rd, 2008© Frost & Sullivan
China: Biotechnology Market Segment
012
34567
89
10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mark
et
Siz
e (
$ B
illio
n)
December 3rd, 2008© Frost & Sullivan
Investment in China: Drivers and RestraintsR
estr
ain
tsD
rive
rs
High
Med
Low
Low
Med
High
Rapid economic
growth,
increased
purchasing
power
* Length of arrow indicates relative impact
Increasing private
investment is
driving innovation
Lack of clarity
and policies
Inadequate legal
enforcement
Government
incentives and
increased
investment
Insufficient IP
protection
Rural penetration
potential
Weaker
management
training
December 3rd, 2008© Frost & Sullivan
Thank you
Hadi SalahIndustry Analyst
Technical InsightsFrost & Sullivan
“We accelerate growth”
Presentation Title / Date
University Health Network and University of Toronto
The Indian and Chinese Health The Indian and Chinese Health Biotech Industries:Biotech Industries:
Competitors or Collaborators of Competitors or Collaborators of Canadian Firms?Canadian Firms?
December 3, 2008 December 3, 2008
Sarah E. Frew, [email protected]
McLaughlin-Rotman Centre for Global HealthProgram on Ethics and Commercialization
Presentation Title / Date
University Health Network and University of Toronto
McLaughlin-Rotman Centre For Global Health
• Based in MaRS
• 50 people
• International talent
• Over $50 Million raised for research
• Spin off company: FIO Corporation
Presentation Title / Date
University Health Network and University of Toronto
Purpose: To explore how the domestic
private sector in Developing Countries (DCs) can contribute to the development of health technologies that address local health needs.
Cases include: India, China, Brazil, South Africa, Ghana, Tanzania, Rwanda
Qualitative Research Methods:
• Semi-structured interviews with key informants
• Background documents
Private Sector Development in Developing Countries: Innovative Firms
Presentation Title / Date
University Health Network and University of Toronto
Purpose: To explore how the domestic
private sector in Developing Countries (DCs) can contribute to the development of health technologies that address local health needs.
Cases include: India, China, Brazil, South Africa, Ghana, Tanzania, Rwanda
Qualitative Research Methods:
• Semi-structured interviews with key informants
• Background documents
Private Sector Development in Developing Countries: Innovative Firms
Objectives:1. Survey core competencies
2. Explore how, when and why IDC SMEs form linkages
3. Assess capabilities in: human and financial R&D resources, manufacturing, intellectual property and regulatory affairs
4. Identify incentives for and barriers to addressing local health needs
5. Explore financial issues
Presentation Title / Date
University Health Network and University of Toronto
Private Sector Development in Developing Countries
Nat. Biotechnol. 25 (4), 403-417 (2007). Nat. Biotechnol. 26 (1), 37-53 (2008).
Brazil: Nature Biotechnology 26 (6), 627-644 (2008).
Presentation Title / Date
University Health Network and University of Toronto
India in Brief
• Population: 1.1 Billion (1.6B/2050)
• Leading causes of death– Heart Disease– Cerebraovascular Disease– Infectious and parasitic Diseases
(Diarrhoeal, TB, HIV/AIDS)– Lower respiratory Diseases
• Biosciences and Engineering– 700,000 Post-graduates– 15,000 PhDs – 15,000 scientists in Nat’l Res Labs– 17,000 Medical Practitioners / yr.
• Total Biotech Market: US$2.2B (growing at 37%)
– Targets: $5B by 2010 – 10% global market by 2010
• Total No. of biotech cos: >280– >75% less than 10yrs old.– Growing 35-40% per year
• BioPharmaceutical market: US$1.04B
– Vaccines, therapeutics, diagnostics– 53% Export– 47% Domestic ~= $500M– Domestic vaccine growing 38%
• Increasing Share of Global Contract Service Industry by 45 CROs
– 2005: $100-120 million, growing 20-25% / yr.
– Projected to reach $2 billion by 2010 by Frost & Sullivan.
– 35% of their business in drug discovery (synthetic chemistry)
– 65% in clinical trials arena
Presentation Title / Date
University Health Network and University of Toronto
New DelhiPanacea BiotecLifecare Innovations
Mumbai / PuneWockhardtSerum Institute of IndiaBharat Serums and VaccinesReliance Life SciencesSIRO ClinpharmNicholas Piramal
HyderabadShantha BiotechnicsBharat Biotech InternationalIndian ImmunologicalsDr. Reddy’s LaboratoriesTransgene BiotechBiological E
BangaloreBioconSyngeneClinigene InternationalBhat Bio-Tech IndiaStrand GenomicsAvestha GengraineGangagen
Case Studies of 21 Indian FirmsIncluding 10 of Top 20 Indian Biotech Firms
Presentation Title / Date
University Health Network and University of Toronto
Biocon Limited, BangaloreFinancing North American SMEs• Proprietary Fermentation Technologies
– PlaFractor Technology (2001 US Patent)– Cost-effective process for statins, etc.
• Affordable products for domestic market– Insugen™ (human recombinant insulin) for
India’s 30 Million diabetics (6% adults) priced ~50% lower than imported product
• Expanding development capabilities and marketed products through subsidiaries and strategic alliances
– Syngene (w/ BMS, e.g.), Clinigene– Biocon Biopharmaceuticals: JV w/CIMAB,
Cuba for EGFR mAb in India– Abraxis BioScience: GCSF and Abraxane– JV w/ NeoPharma for Gulf countries
• Co-development partnerships – Vaccinex, therapeutic antibodies– Nobex (acquired in ‘05), filed PCT patent for
oral insulin manufacturing process 2006
“We’ve actually not only helped (Nobex) to stay alive, but we’ve retained their jobs for their employees, we are funding their whole survival. … And here there is an Indian company helping to keep jobs in the US.” --Kiran Mazumdar-Shaw, CEO
Presentation Title / Date
University Health Network and University of Toronto
China in Brief
• Population: 1.3 Billion (1.5B/2050)
• Leading causes of death– Malignant neoplasms– Cerebraovascular Disease– Heart disease– Respiratory Disease
• Human Resources & Infrastructure– 400 Biotechnology-related colleges
and research institutes– 30,000 annual life sciences grads– 64 specialized biotech parks– Recruit international scientists– Recruit R&D and biopharma centres
• Government support for Biotech– Investment of $1.7B 2001-2005
• Biotech market generated total revenue of $5.6 Billion in 2007
– 25% Annual Growth– 92% market in Medical/healthcare– Represents 15% of Asia-Pacific
market– Represents < 7% of global market
• Total No. of bio-pharmaceutical cos:
– ~ 250 - 350 companies– 40% growth in last 5 years
• Approved BioPharmaceuticals– 15 products approved– 60 biologics in pipeline, including
~20 antibodies and ~10 vaccines
University Health Network and University of Toronto
Presentation Title / Date
Case Studies of 22 Chinese Health Biotechnology Firms
ChangchunGeneScience
BeijingBeijing Wantai Biol.Bio-Bridge Science
CapitalBioChina PKU Bioway
Fusogen PharmaSinocells Biotech.
SinoGenoMaxSinovac Biotech
Starvax Internat’l.
ShenzhenBeike Biotech
Shenzhen Chipscreen BiosciencesShenzhen SiBiono GeneTech
ShanghaiHD BiosciencesFudan-Yueda Bio-techShanghai GenomicsGenon Bio-engineeringHuaguan BiochipSunway BiotechUnited Cell BiotechWuXi PharmaTech
XiamenAmoytop
Presentation Title / Date
University Health Network and University of Toronto
WuXi PharmaTech, ShanghaiAiming to be a fully integrated service provider
• Contract Service Company– Founded in 2001 by 4 “returnees”– IPO on NYSE in Aug 2007
• Capabilities include: lead generation and optimization, process research, GMP pilot manufacturing, bioanalytical services
• Aiming to move into: biology and bioanalytical services, preclinical toxicology, animal studies, formulations
• In 2008, Acquired AppTec Laboratory Services (US) for $151 Million
• Clients include: 19/20 top global pharmaceutical companies & 8/10 top global biopharmaceutical companies.
• Compete on cost, operations, and IP protection
Dr. Ge Li, Chairman and CEO, a returning “Sea Turtle”, says: “IP is the lifeblood for a company like ours.”
Presentation Title / Date
University Health Network and University of Toronto
• Lack of Advanced Training Programs
• Dearth of Risk Capital and Investment Exits
• Culture for Public-Private Collaboration
• Regulatory Bureaucracy
• Few Incentives to Address Needs of the Poor
Barriers to India and China’s Health Biotech Development
• International Credibility
• Cultural Differences, Language, Travel
• IP Protection Enforcement
• Innovative Culture vs Me-Too Culture
• Lack of Knowledge about International Markets & Regulations
Presentation Title / Date
University Health Network and University of Toronto
Lessons Learned from India and China’s Health Biotech Sectors
• Focus on locally-relevant products with large domestic markets
• Generate revenues early w/ niche products, & leverage for later growth.
• Explore funding opportunities on a project-specific basis from domestic & international sources (India) and from initiatives at Municipal, Provincial, & State levels (China)
• Be proactive in establishing collaborations with domestic and international public and private organizations
• Protect intellectual property with an eye on global competitiveness
• Take advantage of “Brain Gain” - senior managers trained/worked abroad are instrumental in forging initial partnering relationships
Presentation Title / Date
University Health Network and University of Toronto
Presentation Title / Date57
Canada Lacks Global Competitiveness
Presentation Title / Date
University Health Network and University of Toronto
Presentation Title / Date58
A Problem With Canada’s Innovation Agenda
Canada’s Public R&D
investment: > $13 billion
Canada’s commercialization output: ?
Presentation Title / Date
University Health Network and University of Toronto
Presentation Title / Date59
What Impedes Canadian Commercialization?
Almost exclusive focus on technology push, rather than market demand.
Where market demand is considered, the exclusive markets of focus are industrialized markets such as the United States, Europe and Japan, with little attention paid to the ”Rest of World” markets.
Presentation Title / Date
University Health Network and University of Toronto
Presentation Title / Date
Enabling Canadian Firms to Reach International Markets
60
Presentation Title / Date
University Health Network and University of Toronto
International Biotech Partnering Conference
Results:• Over 200 participants and 70 presenters from companies in India, China, Brazil, South Africa, Ghana, Nigeria, US and Canada. •Arranged over 50 private one-on-one partnering meetings. •We are tracking a number of deals, including 4 with Canadian firms, that are currently under negotiation.
Presentation Title / Date
University Health Network and University of Toronto
Presentation Title / Date
Thank You!
Additional funding partners for the McLaughlin-Rotman Centre for Global Health can be found at www.mrcglobal.org
China Biopharma – Open China Biopharma – Open for Business!for Business!
Paul StinsonPaul Stinson
CAPRA InternationalCAPRA International
December 3, 2008December 3, 2008
63
Here’s What I Will Cover TodayHere’s What I Will Cover Today
Why China is ImportantWhy China is Important What’s Your China Strategy?What’s Your China Strategy? Some Lessons from the TrenchesSome Lessons from the Trenches
64
Ignore China at Your PerilIgnore China at Your Peril
Venture Money Available for Knowledge Venture Money Available for Knowledge EconomyEconomy
Science & Tech Parks and Incentives in Every Science & Tech Parks and Incentives in Every Province Province
Five Year Plan 2006-2010 Goals Will Be Five Year Plan 2006-2010 Goals Will Be Achieved!Achieved!
Every Major Pharma Company is ThereEvery Major Pharma Company is There
65
Why is Canada so Far Behind in Why is Canada so Far Behind in China?China?
Government to Government Relations since 2005Government to Government Relations since 2005 Canada’s Reliance on US TradeCanada’s Reliance on US Trade CCBC Caters to Large Canadian EnterprisesCCBC Caters to Large Canadian Enterprises
SME’s Generally Not There in Life SciencesSME’s Generally Not There in Life Sciences We are Risk-Averse. We Fear the Unknown.We are Risk-Averse. We Fear the Unknown. Result: Result: Canada’s Engagement is Miles Behind Canada’s Engagement is Miles Behind
AustraliaAustralia
66
What’s YOUR China Strategy?What’s YOUR China Strategy?
CME survey – 80% recognize need for China CME survey – 80% recognize need for China Strategy but only 30% have oneStrategy but only 30% have one
Be Entrepreneurial! Plan, then Be Entrepreneurial! Plan, then Implement Implement … … before someone beats you to it!before someone beats you to it!
Follow-up is CriticalFollow-up is Critical Canadian Companies Can Help YouCanadian Companies Can Help You
CAPRA, Sinam, Engage China, Bell AlliancesCAPRA, Sinam, Engage China, Bell Alliances
67
CAPRA Will Help You Source CAPRA Will Help You Source Funding & PartnershipsFunding & Partnerships
StrategicAlliance with ChinaBio LLC, ShanghaiStrategicAlliance with ChinaBio LLC, Shanghai Investors Forums – Beijing Dec 11-12Investors Forums – Beijing Dec 11-12 ChinaBio Partnering Forum – Shanghai Jun3-4ChinaBio Partnering Forum – Shanghai Jun3-4 ““Helping China Biotech Become Global Biotech”Helping China Biotech Become Global Biotech” www.chinabiollc.comwww.chinabiollc.com The Balloch Group will finance in China – see The Balloch Group will finance in China – see
www.ballochgroup.comwww.ballochgroup.com
68
Some Lessons from the TrenchesSome Lessons from the Trenches
Do not go in alone – China is not for the faint Do not go in alone – China is not for the faint of heartof heart
Use our Embassies & Trade CommissionersUse our Embassies & Trade Commissioners China’s Embassy in Ottawa is there to helpChina’s Embassy in Ottawa is there to help
Science & Tech CounsellorScience & Tech Counsellor Do your Research in Advance – and then be Do your Research in Advance – and then be
Ready for Surprises!Ready for Surprises!
69
Recognise Cultural DifferencesRecognise Cultural Differences
Guangxi - RelationshipsGuangxi - Relationships Importance of FaceImportance of Face No Overnight SuccessNo Overnight Success Connections Take TimeConnections Take Time Listen More than Your SpeakListen More than Your Speak Be OpportunisticBe Opportunistic
70
Canadians and Chinese Do Business Canadians and Chinese Do Business DifferentlyDifferently
Recognise difference in time-linesRecognise difference in time-lines Canada: Paralysis by AnalysisCanada: Paralysis by Analysis China: Relationships, then ActionChina: Relationships, then Action
Contracts – word vs. writtenContracts – word vs. written Intellectual Property – perception meets realityIntellectual Property – perception meets reality
China is Open for China is Open for Biopharma Business!Biopharma Business!
www.caprainc.comwww.caprainc.com
[email protected]@caprainc.com
ANALYSIS OF ASIAN ANALYSIS OF ASIAN MARKETS – THE LEGAL MARKETS – THE LEGAL
PERSPECTIVEPERSPECTIVE
Ron ChoudhuryAird & Berlis LLP
OverviewOverview
• Asian Legal Systems – Focus on India
• Investment Vehicles
• Intellectual Property Regulation
• Intellectual Property Protection
• Dispute Resolution
• Best practices
Legal Systems in AsiaLegal Systems in Asia
• Common law in South Asia• Based on British traditions of common law• India main proponent
• Sharia • Practised in Islamic nations• Code of living• Sharia finance
• Civil law• Japan• Many South east Asian countries
• China• One of the oldest legal traditions in the world• Impact of communism• Rule of law versus rule by law
Investment VehiclesInvestment Vehicles
• Tax holidays relevant in determining investment structure
• Joint venture• Generic term encompassing different kinds of partnership
arrangements
• Aims to bring together 2 or more parties with common goal but different organizational strengths to commence or continue venture
• Significant in India due to regulatory restrictions, social or geographic needs
• Wholly-owned vehicles• Subsidiary
• Project office
• Branch
IP Regulation in IndiaIP Regulation in India
• India member of WTO and signatory to TRIPS agreement
• Copyright, patent and trademark protection
• Copyright Act reflects Berne Convention on Copyrights
• Indian Patents Act compliant with TRIPS
• Trademarks registered under Trademark Act• Licenses have been granted to drugs with similar
trademarks
• No specific trade secrecy laws
IP Protection in IndiaIP Protection in India
• Pharmaceutical patents• Both product and process patent• Pharma companies need to obtain licenses from original
drug manufacturers• May change R&D focus• Compulsory licensing if the patent does not meet the
reasonable requirements of the public at a reasonable price
• Data protection clauses to comply with TRIPS on protection of undisclosed information• Useful for protecting undisclosed test data submitted to
regulatory bodies• Data exclusivity is important element of IP protection
Dispute ResolutionDispute Resolution
• Robust judicial system
• Delays due to backlog
• Various trade agreements with US, UK, Japan, China to protect investments
• Agreement provide protection against acts like expropriation and provide dispute resolution procedures between investors and host state
• Arbitration and Conciliation Act based on Model Law on International Commercial Arbitration
• No specific bilateral arbitration treaty or agreement
Best PracticesBest Practices
• Calculated risks
• Understand nature of IP rights and protection available
• Ensure adequate registration of IP
• Strong IP violation and dispute resolution clauses in contracts
• IP audit
• Employment contracts
QuestionsQuestions
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
International Commercial Collaborations: Moves for Success
International Commercial Collaborations: Moves for SuccessModerator: David Shindler, BioDiscovery TorontoStuart Wilson, ISTPCanadaAdi Treasurywala, Arrowcan PartnersYu Zhang, CAPRA InternationalChristopher Paige, Shanghai-Toronto Institute
for Health Research
Moderator: David Shindler, BioDiscovery TorontoStuart Wilson, ISTPCanadaAdi Treasurywala, Arrowcan PartnersYu Zhang, CAPRA InternationalChristopher Paige, Shanghai-Toronto Institute
for Health Research
Biomedical Industry in Biomedical Industry in ChinaChina
Yu ZhangYu Zhang
CAPRA InternationalCAPRA International
December 3, 2008December 3, 2008
84
Here’s What I Will Cover TodayHere’s What I Will Cover Today
Current scenario of China’s biopharma Current scenario of China’s biopharma industry and underlying reasonsindustry and underlying reasons
Industry trends and what are shaping themIndustry trends and what are shaping them Examples of international collaborationsExamples of international collaborations
85
China is a Rapidly Growing China is a Rapidly Growing Biopharma Producer and Market …Biopharma Producer and Market …
>20% growth during 2001-05 to >$3bio; World 4>20% growth during 2001-05 to >$3bio; World 4thth largest vaccine marketlargest vaccine market
Home to >400 biopharmaceutical manufacturers incl. Home to >400 biopharmaceutical manufacturers incl. 114 for genetically engineered drugs and 28 for 114 for genetically engineered drugs and 28 for vaccinesvaccines
Driven by government policies:Driven by government policies: Huge increase in government investment: $100mio in 2001 Huge increase in government investment: $100mio in 2001
→ $1.2bio in 2005 → $1.2bio in 2005 Strong promotion of product development in China by Strong promotion of product development in China by
foreign companiesforeign companies
Sources: Biopharm International, Mar07; BioSpectrum Asia, Nov08; Sarah E Frew et al, Nature Biotechnology, Jan08
86
… … Even Though It Represents Even Though It Represents Only 7% of Global MarketOnly 7% of Global Market
In the past, limited innovative capabilities In the past, limited innovative capabilities and funding support for R&Dand funding support for R&D
Result: 90% of market is biogenericsResult: 90% of market is biogenerics However, CAGR is projected 22% during However, CAGR is projected 22% during
2005-2010 to reach $10.3bio2005-2010 to reach $10.3bio
Sources: Biopharm International, Mar07; Sarah E Frew et al, Nature Biotechnology, Jan08 87
Government Has Been Strongly Government Has Been Strongly Driving InnovationDriving Innovation
R&D policies and support have resulted in:R&D policies and support have resulted in: Having commercialized world’s 1Having commercialized world’s 1stst licensed gene licensed gene
therapy drugs:therapy drugs: Collaboration between Sunway and GenzymeCollaboration between Sunway and Genzyme
Developing leading-edge stem cell therapiesDeveloping leading-edge stem cell therapies Shanghai Genon Bio-EngineeringShanghai Genon Bio-Engineering
Developing novel therapies to treat both locally Developing novel therapies to treat both locally and globally relevant diseases:and globally relevant diseases:
Tianjin FusoGene’s HIV inhibitor granted US patentTianjin FusoGene’s HIV inhibitor granted US patent
88Sources: Websites; Sarah E Frew et al, Nature Biotechnology, Jan08
Continuous Government Commitment to Continuous Government Commitment to Biotech Leap ForwardBiotech Leap Forward
Biomedicine emphasized in the 11Biomedicine emphasized in the 11thth Five-Year Plan of Five-Year Plan of government (2006-2010)government (2006-2010)
Government investment will be $8.8bio by 2010Government investment will be $8.8bio by 2010 Principal Objectives: Principal Objectives:
To develop and commercialize 10-15 innovative drugs and To develop and commercialize 10-15 innovative drugs and vaccines with Chinese owned IP rightsvaccines with Chinese owned IP rights
To market 5 chemical synthetic finished drugs to western To market 5 chemical synthetic finished drugs to western countries by 2010countries by 2010
To foster 5 large-scale pharma groups, to promote 10 large To foster 5 large-scale pharma groups, to promote 10 large distributors , and to help 5 domestic pharma evolve into distributors , and to help 5 domestic pharma evolve into international enterprisesinternational enterprises
Source: Biopharm International, Mar07; BioSpectrum Asia, Nov08 89
Companies Have Benefited From Companies Have Benefited From Government-Supported LabsGovernment-Supported Labs
Genetically engineered vaccines: SinovacGenetically engineered vaccines: Sinovac Immunologic diagnostic reagents: Shanghai Immunologic diagnostic reagents: Shanghai
MedicilonMedicilon Pharmacogenomic and proteomic screening: Pharmacogenomic and proteomic screening:
Shanghai GenomicsShanghai Genomics QC technology in TCM industry: Shenzhen QC technology in TCM industry: Shenzhen
Tongjitang PharmaceuticalTongjitang Pharmaceutical Antibody drugs: Suzhou YES Biotech LaboratoriesAntibody drugs: Suzhou YES Biotech Laboratories Medical implant devicesMedical implant devices
Source: Notification from China’s National Development and Reform Commission (NDRC), Oct07; Company websites 90
Significant Government Support Significant Government Support in Other Biotech Research Areasin Other Biotech Research Areas
Breeding for endangered herbsBreeding for endangered herbs Molecular crop breedingMolecular crop breeding Cellular crop breedingCellular crop breeding Forest tree breedingForest tree breeding Animal breedingAnimal breeding Chemical applications on biomassChemical applications on biomass Veterinary biological productsVeterinary biological products Crop transgenic breedingCrop transgenic breeding Development and safety of biologic feedDevelopment and safety of biologic feed
91
Increasing Numbers of ‘Sea-Turtles’ Increasing Numbers of ‘Sea-Turtles’
Mean More International CollaborationsMean More International Collaborations Shanghai Genomics and Gene Networks Shanghai Genomics and Gene Networks
International International Shenzhen Chipscreen Biosciences and HUYA Shenzhen Chipscreen Biosciences and HUYA
Bioscience International in San DiegoBioscience International in San Diego Mindray Bio-Medical’s acquisition of Mindray Bio-Medical’s acquisition of
DataScope businessDataScope business June 3-4June 3-4thth: ChinaBio Partnering Forum in : ChinaBio Partnering Forum in
Shanghai: Shanghai: www.chinabiollc.com
92
China is Open for China is Open for Biopharma Business!Biopharma Business!
““Chinese biopharma enterprises are looking forward to Chinese biopharma enterprises are looking forward to more collaboration with the world’s leading more collaboration with the world’s leading biopharma institutions and companies. We expect to biopharma institutions and companies. We expect to achieve a win-win situation with our global partners. achieve a win-win situation with our global partners. The Chinese biopharmaceutical industry is ready to The Chinese biopharmaceutical industry is ready to make significant contributions to global disease make significant contributions to global disease prevention and healthcare.”prevention and healthcare.”
- Ms. Lifeng Wang, CEO of China National Biotech Group (CNBG), at - Ms. Lifeng Wang, CEO of China National Biotech Group (CNBG), at the 1the 1stst International China Biopharmaceutical Symposium (ICBPS), International China Biopharmaceutical Symposium (ICBPS), Beijing, Dec06Beijing, Dec06
93
UHN China Strategy
Christopher Paige, PhDVice President, ResearchUniversity Health Network
94
Research to RevenueDecember 3, 2008
UHN Global Ventures
“to seek preferred academic and
commercial partnerships”
95
Research Planning
• Enhance Drug Development Capacity
• Build Clinical Research/Trial Capacity
• Extend Global Reach
96
WHY?
97
STRUCTURE
UHN Shanghai
Incorporated in China as a WFOE
97
UHN Shanghai CRO (Zhangjiang HT Park)
Profit expectations
A culture of “work - arounds”
Fast changing regulatory environment
98
Challenges
Service/development model
Get to know the Regulators
Hire good advisors
99
Solutions
关系
100
Thank You
谢 谢
Global Connections for Canadian InnovatorsLiaisons internationales pours les innovateurs canadiens
AN OVERVIEW OFISTPCANADA
December 3, 2008
Stuart Wilson, ISTPCanada
Background
International S&T Partnership Program $20 Million Program of Department of Foreign
Affairs and International Trade to foster international S&T partnerships
Target Countries: India, China, Brazil and Israel Israel component delivered by existing Canada-
Israel Industrial R&D Foundation (CIIRDF) India, China and Brazil components to be delivered
through non-governmental organizations
ISTPCanada Overview Established - January, 2007 Mandate – to promote and facilitate international R&D
partnerships involving Canadian companies and research organizations
Primary Activity - Implementing the funded program components of bilateral S&T agreements through counterpart organizations in partner countries
Clients – companies, academic institutes, research institutes and other institutes (Crown agencies may participate but cannot be recipient of funding)
Supported activities - Collaborative R&D Projects and Partnership Development Activities
Principles – S&T excellence, shared benefits, economic returns to both countries, symmetry, protection of IP, respect of local laws
Internal Partnerships
Provinces:• Alberta & British Columbia in place• Ontario & Quebec in development
Industrial Research Assistance Program (active) Ontario Centres of Excellence (active) Western Economic Diversification (active) Sustainable Development Technology Canada The Canadian Institutes of Health Research The Atlantic Canada Opportunities Agency Federal Science-based Departments and agencies
The Basic Approach
Synchronize application process with the implementing organization in the partner country, to the greatest extent possible
Common calls for proposals will be issued and syncronization of approval processes maximized; and
Final authority for funding rests with national implementing organizations but a Yes/Yes decision is required before proceeding.
Collaborative R&D Projects ~80% of ISTP program funds Industry participation essential Commercialization plan important element of proposals Academia and R&D Institutes participation encouraged
and may lead project Exchange of young researchers also encouraged Maximum contribution by ISTPCanada is $600,000 Contribution up to 50% Canadian share of eligible costs Average project duration 1-3 years Number of projects funded each call-for-proposals is
subject to available funding
Collaborative R&D Projects
Key Criteria: Scientific merits and degree of innovation inherent
in the product/service developed Business opportunity and capacity for commercial
success Capacity of participants to manage and conduct the
project, including commercialization thus leading to clear benefits to both countries
Non-government funding minimum of 25%
Application and Review Process
Competitive Process Expression of Interest (EOI in India but not in China) Invitation for full proposal submission Parallel proposal evaluations in each country: yes/yes
required At ISTPCanada
- Expert assessment- Advisory Committee recommendation- Joint project approval- ISTPCanada Board approval
Partnership Development Activities ~20% of program funds Joint cost-shared activities such as workshops,
partnering missions, seminars, conferences, symposia, exchanges, and other technology partnership events
Industry participation encouraged Objective to form extended R&D collaborations competitive calls and internally generated Up to $25,000 or 50% of eligible Canadian costs
China Update First CFP September, 2007
• 135 Expressions of Interest• 47 full proposals invited• 8 projects announced May, 2008
Second CFP September 2008• 170+ Expressions of Interest• 38 full proposals invited
Partnership Development Activities• 15 completed or approved
India Update First CFP Launched October, 2007
• 67 Expressions of Interest received• 29 Full proposals invited• 8 projects approved• For Partnership Development Activities (PDA)• Open Call for Proposals – 3 month turn-around• 3 PDAs being developed
Second CFP September (Biosciences)• 20+ Expressions of Interest
Partnership Development Activites• 3 completed or approved
Contacts
www.istpcanada.ca
Bharat Rudra – Country Manager, India• [email protected]
Stacy Chew – Country Manager, China• [email protected]
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
Adventures in Emerging MarketsAdventures in Emerging MarketsAndrea Mandel-CampbellAndrea Mandel-Campbell
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
Mississauga: Canada's3rd Largest Life Sciences ClusterMississauga: Canada's3rd Largest Life Sciences Cluster
Larry Petovello, City of MississaugaLarry Petovello, City of Mississauga
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
Strategic Case StudiesStrategic Case StudiesModerator: Joel Cheng, XPhase Pharmaceuticals Inc.Bin Huang, WEX PharmaceuticalsFulong Qiao, Beijing Farmunity Inc.Sean Thompson, YM Biosciences
Moderator: Joel Cheng, XPhase Pharmaceuticals Inc.Bin Huang, WEX PharmaceuticalsFulong Qiao, Beijing Farmunity Inc.Sean Thompson, YM Biosciences
Developing a new class of Developing a new class of non-opioid non-opioid analgesics for analgesics for
treatment of paintreatment of pain
by Bin Huang, President & CEOby Bin Huang, President & CEO
From Research to Revenue IVFrom Research to Revenue IVCapturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
December 3, 2008December 3, 2008
OVERVIEWOVERVIEWwww.wexpharma.comwww.wexpharma.com
Phase 3 clinical trial: Tectin for refractory cancer pain– NNew class of ew class of non-opioidnon-opioid analgesics analgesics – Clinical trials in Canada since 2000
A Canadian public company since 1992 – TSX:WXI– Management and development teams in Vancouver
and Montreal– Manufacture plant in Nanning, China
$20 million investment from CK Life Sciences– Deal closed October 2007, provides funding for 2
years– Rebuild management team
The Asia Connection The Asia Connection – WEX experience– WEX experience
Origin of Company – Hong Kong
Initial source of technology – China
API supply – 25 staff manufacture plant in Nanning, China
New major investor – CK Life Sciences Int’l, HQ in Hong Kong
Opportunities
Cost of R&DAccess to larger pools of patientsAccess to capital
– An alternative sourceAccess to large and rapidly-growing
market– Asian prevalent diseases– Inexpensive medicines– Diagnostic tools and services
Considerations
A constantly changing environment – Know the rules and culture
Virulent competition, pricing pressure– Government support for SOE vs. WFOE
Government – can’t rely on it, can’t defy it Local partner is critical Trusted advisor is essential Mind your store - feet on ground
– Hong Kong and Singapore are good gateways Watch your IP Get paid upfront
Examples
www.crownbio.com – CRO
www.wuxipharmatech.com – CMO
www.simcere.com – Pharma
www.caprainc.com – Partnerships
www.asialife.com – Venture consulting
Dr. Fulong Qiao
Beijing Farmunity Inc.
December 3, 2008
Integrated Eco-Dairy Corporation (IEDC) Model
Outline1. Best safe foods market in the world
2. Marketing strategy of safe foods in China
3. Challenging issues of Chinese dairy
4. Milestones of Fulong’s business in China
5. Highlights of integrated dairy producing technology
system (IDPTS)
6. Integrated eco-dairy corporation (IEDC) model
7. Strategies on development
8. Summary
1. Best safe foods market in the World
1. Facts in Chinese Agriculture:
1. China has 10% of arable lands vs. 20% of population in the World.
2. Lack of standardized production and economic land scale.
1. China has 250 million households (farms).
2. Each household has only 1 Acre arable land in average.
3. Farming is more and more relaying on chemicals.
1. 35% chemical fertilizers in the world are used in China.
2. Pesticides, herbicides, hormones and antibiotics are widely used.
2. Niche Market of Safe Foods:
1. Right now, people pay more attention on safe foods than education, social
warfare, environmental pollution and employment.
2. Limited choices of safe foods and 100 – 300% of premium.
3. 6% of families have more than 60% of the total assets in China.
2. Strategy of safe food marketing in China
1. Using superior dairy products to establish niche safe food
marketing network:
1. Dairy products are one of the most popular foods for those
consumers with higher family incomes.
2. Superior dairy products are rare in China.
3. In current markets, liquid milk products with reasonable good
quality have at least 150% of premium.
4. Logistic cost is reasonable for directly selling superior dairy
products with cold chain systems.
2. Adding on other safe foods to the established marketing
network:
1. Importing and marketing safe foods and feed
2. Integrating existing producers to produce high quality animal
products, vegetables, special superior grains and fruits.
3. Challenging issues of Chinese Dairy
1. Overall poor dairy management
2. Low quality products
3. Unsustainable dairy industry
3.1 Overall poor dairy management
1. Lack of practical dairy barn design
1. Cows are directly lying on the hard floor.
2. Cows are suffering strong cold wind in winter and serious heat stress in summer.
3. Lack of good water supply system.
4. Lack of calving pens.
5. Poorly constructed silage buck silos.
2. Lack of high quality forage (feeding cows like pigs)
3. Inferior genetics, lack of systematic breeding program
4. Poor managements of disease control, untrained labor and milking unsanitary
5. Extremely high incidences of mastitis, lameness and reproduction infections
6. Heavily contaminated raw milk
1. Serious bacteria contamination: millions/ml
2. Serious issues of adulterated milk
3. Antibiotic contamination
3.2 Poor quality products
Criteria Advanced Countries
China
Processing temperature (oC) 72-75 |135 85 |135-150
Processing time (seconds) >15 | 2-5 >16 | 4 -15
Reconstituted milk? No >30% (before 2007)
Nutrient value Superior Low
Package cost (percentage of retail price)
10% 20 - 40%
Advertisements Little5 – 10% of sale revenue
3.3 Unsustainable dairy industry
1. Not win-win biz model of ‘Dragonhead Processors + Milking Stations
+ Farmers’
Farmers Milking Stations Processors
Small Poor facility Over-heat milk
Lack of organization Poor management High package cost
Feed cows as pigs Disease spreading site High ad. cost
Poor disease control Highly contaminated milk Cheating concepts
Inferior genetic Making money by adulteration
High risk and low return
Helpless
2. Unsustainable development, low quality competitions
4. Milestones of Fulong’s business in China
1. 2004-2005:
1. Integrated dairy producing technology system (IDPTS) had been
developed, which was officially evaluated on June 6, 2006, Beijing.
2. Dairy producing studies had been conducted across China.
2. 2006-2007:
1. The first cooperative dairy farm was accomplished in April’07, Huhhot.
2. The IDPTS had been implemented in Beijing, Hebei and Inner Mongolia.
3. 2008:
1. The kernel IEDC model is initiated in Beijing.
2. Superior dairy products will be produced and marketed in Beijing.
1. Examples of the innovative technologies of the IDPTS
2. Practical achievements in Beijing, Hebei and Inner Mongolia
5. Highlights of the IDPTS
1. Feeding cows with high quality and low cost forage based rations
Forage producing cooperatives Heavy machinery operation Less labors and high efficiency High quality and low cost forage
5.1 Examples of the innovative technologies of the IDPTS
2. Comfort and clean bedding systems
5.1 Examples of the innovative technologies of the IDPTS
5.2 Practical achievements of implementing the IDPTS
After 3 months
After 3 months
1. Increase milk yield 20 – 50%
2. Increase milk price with high quality
3. Double the longevity of cows
4. Added profit is about 4000 – 9000 RMB per
lactating cow per year
5.2 Practical achievements of implying the IDPTS
6. Integrated Eco-Dairy Corporation (IEDC) Model
1. Introduction of IEDC Model
2. “N+1”Kernel IEDC Model
6.1 Introduction of IEDC Model
1. Integration from developing forage producing cooperatives, revising
and managing existing dairy farms, OEM milk processing, and direct
marketing.
1. 100% well controlled quality assurance system.
2. Loyal consumers.
2. Forage producing cooperatives
1. Exploring economics in scale by using heavy machinery instead of
traditional labor intensive farming.
2. Producing high quality and low cost forage.
3. Revising and managing existing larger dairy farms
1. Minimizing capital investment and dairy farming risks.
2. Healthy cows & superior raw milk.
4. OEM milk processing
1. Minimizing capital investment and production cost by using existing
plants.
2. Direct marketing high quality dairy products with reasonable prices.
ForageEco-Producing
Cooperative
Forage Eco-Producing
Cooperative
Forage Eco-Producing Cooperative
Forage Eco-Producing Cooperative
High quality forage based rationsComfort bedding systemsSexed Semen & Embryo Transfer Advanced Milking FacilityTMR Supply FacilityWaste ManagementSemi-quarantine disease control
Regional Centre
Management & Service Centre
OEM Dairy Processing
Dairy Farm
Dairy Farm
Dairy FarmDairy Farm
6.2“N+1”Kernel IEDC Model
7. Development strategies
1. The primary goals are to fulfill the kernel IEDC model in
Beijing between 2008 – 2010.
1. The number of lactating cows is 5,000.
2. Producing, processing and marketing 100 tones of milk
a day.
3. Serve 300,000 – 400,000 consumers with memberships.
2. The optimal goals are to supply other superior foods to
those membership consumers by importing and
integrating existing producers and processers.
8. Summary
1. Integrated dairy producing technology system (IDPTS)
1. Minimize the technical risks
2. Produce superior milk
3. Maximize profits
2. Establishing direct-sale marketing network by using IEDC
model
1. Overcome all of challenging issues that farmers and consumers are
facing.
2. Optimize the interests of farmers, local governments, consumers and
investors
3. Marketing wide range of safe foods produced
1. IEDC model will be multiplied in other sectors.
2. High return, which can satisfy all of the participants.
3. Good for people, nature and society.
advancing drugs effectively
S. Korea
Japan
Australia
Singapore
Indonesia
EU
USA
Canada
Q4/2008
Sean Thompson
VP Corporate Development
Research to Revenue IV
Mississauga Living Arts Centre
December 3, 2008
Safe Harbor Statement
This presentation may contain forward-looking statements, which reflect the Company's
current expectation regarding future events. These forward-looking statements involve
risks and uncertainties that may cause actual results, events or developments to be
materially different from any future results, events or developments expressed or implied
by such forward-looking statements. Such factors include, but are not limited to, changing
market conditions, the successful and timely completion of clinical studies, the
establishment of corporate alliances, the impact of competitive products and pricing, new
product development, uncertainties related to the regulatory approval process and other
risks detailed from time to time in the Company's ongoing quarterly and annual reporting.
Certain of the assumptions made in preparing forward-looking statements include but are
not limited to the following: that nimotuzumab will continue to demonstrate a competitive
safety profile in ongoing and future clinical trials; that AeroLEF® will continue to generate
positive efficacy and safety data in future clinical trials; and that YM and its various
partners will complete their respective clinical trials within the timelines communicated in
this release. We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
> YM BioSciences is a biopharmaceutical development company engaged in commercialization of products principally for cancer patients. We have 33 employees and are based in Mississauga, Canada
> Portfolio consists of two late-stage products: Nimotuzumab, a monoclonal antibody for cancer and AeroLEF®, an opioid product for acute post-operative pain
> Recent management changes implemented to aggressively advance development of the portfolio
• Net cash ~$52 million*, Net cash/share ~ $1 – No debt – No impaired assets
• Burn rate for FY’08 ~$17.5 million**• Shares outstanding: ~ 58 million*** / ~ 71 million f.d.• NYSE/Alternext – YMI; TSX – YM; AIM - YMBA
* Estimate as @ September 30, 2008 ** To increase with clinical activity*** 2.5 million of these are subject to milestones including partnership and Phase III initiation of AeroLEF®
Investment Summary
>Uniquely permits patient self-titration of opioids:
• Fentanyl is first product
• Soft mist inhalation with an approved nebulizer
• New management team with established fentanyl development and regulatory experience mandated to partner product
AeroLEF®
>Clinically demonstrated to be an active drug in multiple tumor types
>Mechanistically demonstrated to be differentiated from cetuximab (Erbitux®) and panitumumab (Vectibix®)
>Being developed by a global consortium of companies
>Marketed in numerous secondary markets including:• India, China, Philippines, Indonesia
Nimotuzumab – Affinity-Optimized™ Anti-EGFR mAb
>Med-High EGFR environment (cancer cells): all mAbs bind in the same manner—bivalently1
• Evidence of equivalent therapeutic efficacy of nimotuzumab to higher affinity mAbs (clinical/preclinical)
>Low EGFR environment (normal cells): high affinity antibodies (cetuximab and panitumumab) bind tightly and monovalently
• Results in indiscriminate activity and toxicity
>Nimotuzumab’s affinity optimization results in transient monovalent binding and stable bivalent binding
• Differentiates between normal and cancer cells
1 Yoshida et al 2008; Tikhomirov et al 2008; van Bueren et al 2008
Nimotuzumab Therapeutic Effect Concentrated at Tumor
NimotuzumabAffinity-Optimized™ mAb
High Affinity anti-EGFR mAbs
Activity of Nimotuzumab is Concentrated at Tumor
Activity of High Affinity anti-EGFR mAbs is dispersed across all
tissues, causing toxicity
Tumor(High EGFR)
Tumor(High EGFR)
Nimotuzumab – Mechanistically Differentiated
Erbitux® plus Radiation
Nimotuzumab plus
Radiation
Vectibix® plus BSC
BSCAlone
Rash - Grades 3 and 4
25%2 VERY RARE 62%3 0%
Rash - All grades 87% 9% 90% 6%
Rad. Dermatitis—Grades 3 and 4
49%5 VERY RARE NA NA
Pruritus 16% VERY RARE 57% 2%
Hypomagnesemia – all grades
55%4 VERY RARE 39% 2%
Nausea 49% 22% 23% 16%
Diarrhea 19% 9% 21% 1%
Constipation 35% 14% 21% 9%
Vomiting 29% 14% 19% 12%
1 Information from four completed trials; data collection ongoing.2 FDA Action Letter, June 2008 3 STEPP trial – 2008 – 29% post-preemptive treatment
4 Erbitux® Package insert. Revised: 11/20085 Article in Press: Giro C et al, Radiother Oncol (2008),
doi:10.1016/j.radonc.2008.09.007
Erbitux® and Vectibix® Have Significant Toxicities
> Affinity-optimized™ nimotuzumab has potential for significantly improved therapeutic window relative to Erbitux® and Vectibix®
• Lower affinity for normal cells (skin and kidney) vs. Erbitux®1
• No evidence of Grade III/IV kidney toxicity (hypomagnesemia)2
• No evidence of Grade III/IV skin toxicity2
> There is no clinical evidence of serious toxicity in chemoradiation regimens (RT+CisPt) with addition of nimotuzumab
• With Erbitux®, 20% treatment discontinuation in combination CisPt/RT regimen previously reported3
> The only anti-EGFR mAb tolerable for chronic use – therapeutic window crucial - and the drug of choice for combination Chemo+RT
1 Internal unpublished data2 Nimotuzumab integrated global safety database3 Erbitux® Package Insert
Nimotuzumab – Uniquely Positioned Anti-EGFR mAb
NSCLC Palliative Phase I/IISingle-armPatients unsuitable for radical therapy
ASCO June 2008 & Preliminary data on 2nd cohort
Substantial radiological responses and meaningful clinical responses in each cohort. Median survival of three cohort equals 60 weeks.
Brain Metastases from NSCLC
Randomized Phase II RT +/- nimotuzumab
Preliminary analysis (EORTC/NCI/AACR October 2008)
CR+PR+SD 92% vs. 44%OS 7 months vs. 2.5 months
H & N Stage III & IVA unresectable(BEST trial)
Multi-modal 4-arm Phase II CT/CRT +/- nimotuzumab
Marketing Approval by Health Regulatory Authorities in India
Significant tumor response rates (CR/ORR) compared to RT alone and to CT + RT alone.
Nasopharyngeal Randomized Phase II RT +/- nimotuzumab
Marketing Approval by Health Regulatory Authorities in China
CR 91% vs. 52% at 17 weeks
H & N (locally advanced)
Phase II single-arm100 and 200 mgs
In publication Twenty patients (83%) – CR or PR. The median overall survival (n=24) was 51.7 months.
Glioma GBM Stratum
Phase III RT +/- nimotuzumab
Interim analysis of 65/80 patients to complete the trial
Overall survival placebo+ RT = 8.67 months
Nimotuzumab + RT = 16.43 months
Clinical Evidence >30 Trials in Ten Tumor Types
Multiple randomized trials ongoing in 2009
DIPGPhase IIIrecruitment completed
Adult GliomaPhase IIIrandomized, controlled
PancreaticPhase IIb/IIIarandomized, controlled
Europe
GastricPhase IIrandomized
Other indications planned
Japan and Korea
Brain Metastases (NSCLC)
Phase IIrandomized, controlled
Non-Small Cell LungPhase IIrandomized, controlled
DIPG Phase IIOpen label
North America
Nimotuzumab – Path to Approval in Major Markets
Nimotuzumab – Preferential Positioning
Indication5 yr
Survival
European Patients
Japanese Patients
NA Patient
s
Glioblastoma 25% 12,600 1,000 4,800
NSCLC 15% 229,000 52,000 166,000
Brain Mets (NSCLC)
15% 71,000 16,200 52,000
H&N 60% 98,000 15,000 42,000
Esophageal 16% 48,000 14,000 16,000
Gastric 25% 171,000 114,000 29,000High Unmet Need – Low 5 Year Survival
Large Markets – More than 1 million patients globally
Target indications driven by mechanistic and clinical observations
Nimotuzumab – YM Global Marketing Rights
YM BioSciences nimotuzumab marketing rights
Japan
Korea
Australia/New Zealand
North America
Southeast Asia
Europe
Africa
Licensee Territory Date Market Approval Indication
S Korea Jun-05 not filed
SE Asia Nov-05 Indo, Philippines Glioma (08)
Japan Jul-06 not filed
India, PK Jun-04 India H&N (06)
Nimotuzumab – Business Development in Asia
Why Asia?
> Early revenue for company
> Additional resources for development
> Broaden label faster, some conditions endemic in Asia
> Open minded executives. Less influenced by cross pollination in US and EU companies
> Broaden company revenue base
> An excellent method to build Canadian based companies!
Ongoing trial Completed trial
Indication Phase I Phase II Phase III Sponsor
Pediatric Diffuse Intrinsic Pontine Glioma Phase III trial reporting mid-2008 Oncoscience AG
Adult Glioma Oncoscience AG
Pancreatic Cancer Oncoscience AG
Head & Neck Cancer YM BioSciences
Pediatric Glioma (High Grade) Phase II data submitted to EMEA Oncoscience AG
Pancreatic Cancer Oncoscience AG
Pediatric Diffuse Intrinsic Pontine Glioma YM BioSciences
Colorectal Cancer YM BioSciences
Non-Small Cell Lung Cancer YM BioSciences
Japanese Safety Study Daiichi-Sankyo
Pharmacodynamic Study YM BioSciences
Esophageal Cancer CIM / Eurofarma
Squamous Cell Carcinoma of the Head & Neck Innogene Kalbiotech
Gastric Cancer (Advanced, Recurrent) Daiichi-Sankyo/Kuhnil
Pediatric Brain Stem Tumors YM BioSciencesExpanded Access Program - USA
Nimotuzumab Clinical Trials
> YM BioSciences is a biopharmaceutical development company engaged in commercialization of products principally for cancer patients. We have 33 employees and are based in Mississauga, Canada
> Portfolio consists of two late-stage products: Nimotuzumab, a monoclonal antibody for cancer and AeroLEF®, an opioid product for acute post-operative pain
> Recent management changes implemented to aggressively advance development of the portfolio
• Net cash ~$52 million*, Net cash/share ~ $1 – No debt – No impaired assets
• Burn rate for FY’08 ~$17.5 million**• Shares outstanding: ~ 58 million*** / ~ 71 million f.d.• NYSE/Alternext – YMI; TSX – YM; AIM - YMBA
* Estimate as @ September 30, 2008 ** To increase with clinical activity*** 2.5 million of these are subject to milestones including partnership and Phase III initiation of AeroLEF®
Investment Summary
S. Korea
Japan
Australia
Singapore
Indonesia
EU
USA
Canada
advancing drugs effectively
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
Impact of Regulations:How They Affect People on the GroundImpact of Regulations:How They Affect People on the Ground
Moderator: John Kelly, MaRS LandingValerie Bell, Bell Alliances InternationalAshley Roberts, CantoxXuefeng Yu, sanofi pasteurPaul Jones, Jones & Company
Moderator: John Kelly, MaRS LandingValerie Bell, Bell Alliances InternationalAshley Roberts, CantoxXuefeng Yu, sanofi pasteurPaul Jones, Jones & Company
Bio-Pharmaceutical Bio-Pharmaceutical Regulations in ChinaRegulations in China
China Biotech landscapeChina Biotech landscape
Biotechnology is one of the seven key Biotechnology is one of the seven key technologies for the national science technologies for the national science and technology medium- and long-and technology medium- and long-term development plan (2006-2020)term development plan (2006-2020)
Multiple sources of FundingMultiple sources of Funding• MOST, DOH, NDRC, Local GovernmentMOST, DOH, NDRC, Local Government
S&T Industrial Park attracts most of S&T Industrial Park attracts most of the new Biotech industries the new Biotech industries
Distribution of S&T Industrial park Distribution of S&T Industrial park
Policies to regulate and promote Policies to regulate and promote BiotechnologiesBiotechnologies
Strategy for Biotech and Bio-Industry Strategy for Biotech and Bio-Industry development 2006-2020development 2006-2020
Bio-safety ActBio-safety Act Regulations for Human Genetic Regulations for Human Genetic
Resource ManagementResource Management Regulation on Biological Safety Regulation on Biological Safety
administration of Pathogenic administration of Pathogenic Microorganism Laboratories Microorganism Laboratories
Current Status of Biotech Industry in Current Status of Biotech Industry in ChinaChina
MNCs move in fastMNCs move in fast• Drug Discovery: R&D Centers + CRODrug Discovery: R&D Centers + CRO• MNCs began to acquire local Biotech Companies: GSKMNCs began to acquire local Biotech Companies: GSK
Local Biotech less innovativeLocal Biotech less innovative• Biotech > 90% on bio-similar productsBiotech > 90% on bio-similar products
Weak in “D”: Bioprocess and Development Weak in “D”: Bioprocess and Development Barrier and less trust to Foreign companiesBarrier and less trust to Foreign companies The Status is changing fastThe Status is changing fast
• MNC’s China strategyMNC’s China strategy• Significant amount of new Start-ups by oversea Significant amount of new Start-ups by oversea
returneesreturnees• Some local Biotech companies start recruiting top Some local Biotech companies start recruiting top
management from oversea. management from oversea.
Regulatory Challenges Regulatory Challenges
Government regulations lag behind the industry’s Government regulations lag behind the industry’s
needsneeds
• Significant delay for IND and NDA approvalSignificant delay for IND and NDA approval
• Regulatory authorities are mainly from academia, lack of Regulatory authorities are mainly from academia, lack of
experience to handle the biotech industry needs experience to handle the biotech industry needs
• Lack of coordination between government agencies, unclear Lack of coordination between government agencies, unclear
roles and responsibilitiesroles and responsibilities
• Different quality standard and interpretation of quality Different quality standard and interpretation of quality
standardstandard
• Barriers for new biotech products developed outside of China Barriers for new biotech products developed outside of China
OpportunitiesOpportunities Strong Support from GovernmentStrong Support from Government
• Strategy, Policy, FinanceStrategy, Policy, Finance Unique resources: Diseases and PatientsUnique resources: Diseases and Patients
• Strains, Blood samples, Patients and Subjects, Strains, Blood samples, Patients and Subjects, Talent PoolTalent Pool
• Scientists, Technicians, Logistic manpowerScientists, Technicians, Logistic manpower Low cost with high efficiencyLow cost with high efficiency
• Ph.D and Post-doctor 350-500 Euro/mPh.D and Post-doctor 350-500 Euro/m CRO CRO
• Animal Test: Rodent, Canine, Monkey, 11 facilities got AAALAC Animal Test: Rodent, Canine, Monkey, 11 facilities got AAALAC accreditationaccreditation
• Genomics, proteomics, pharmacology, pharmacokinetics, Genomics, proteomics, pharmacology, pharmacokinetics, toxicology, Pilot, etc.toxicology, Pilot, etc.
Increasing Medical needs, Future MarketIncreasing Medical needs, Future Market• 800M Euro in 2007, >30%/year800M Euro in 2007, >30%/year
Consultants in
Human Health,
Toxicology &
Regulatory Affairs
www.cantox.com
CHINESE FOOD REGULATORY REQUIREMENTS
Ashley Roberts, Ph.D.Cantox Health Sciences International
From Research to Revenue IV: Capturing Business Opportunities in Asia
Mississauga Living Arts Centre, Mississauga, OntarioDecember 3, 2008
www.cantox.com
Consultants in
Human Health,
Toxicology &
Regulatory Affairs
INTRODUCTIONS
• Great interest in China from food, food ingredient and supplement manufacturers– Market expansion– Market size– Westernization– Changing dietary patterns
• Barrier to market– Knowledge of regulations– Requirements– Previous approvals (JECFA)
www.cantox.com
Consultants in
Human Health,
Toxicology &
Regulatory Affairs
CHINESE REGULATIONS
• Food laws established in 1949
• Revised in the 80’s– Food hygiene– Safety of imported foods
• Food Hygiene Law finalized in 1995– “To ensure food hygiene, prevent food
contamination or harmful substances from injuring human health, safeguard the health of the people and improve physical fitness”.
www.cantox.com
Consultants in
Human Health,
Toxicology &
Regulatory Affairs
FOOD HYGIENE LAW (1995)
• Law consists of 9 chapters and 57 articles– Hygiene for all foods– Food additives– Containers– Packages– Utensils– Equipment used for foods
• Production facilities also covered
• Covered by national, provincial and municipal governments
www.cantox.com
Consultants in
Human Health,
Toxicology &
Regulatory Affairs
FOOD HYGIENE LAW (1995)
• Outlines regulatory requirements for approval of domestic and imported products– Food additives– Novel foods– Functional foods– Supplements
• Individual regulations
HealthFoods
www.cantox.com
Consultants in
Human Health,
Toxicology &
Regulatory Affairs
FOOD ADDITIVES AND NOVEL FOODS APPROVAL
Unique System
• Positive list published in “Food Additive Hygiene Standard”
• Requires approval from Ministry of Health (MOH)
• Testing of food ingredient (analytical)
• Testing of food ingredient (toxicity)
• Results must be included in application
• Overseas, applicants need a representative officer or authorized agent
www.cantox.com
Consultants in
Human Health,
Toxicology &
Regulatory Affairs
HEALTH FOODS
• Require registration with the State Food and Drug Administration
• Can carry a health claim– No reference to treatment or cure of
disease
• Needs to be sold overseas for a period of 1 year
• Determine specific testing
• Examine manufacturing site (GMP)
• Approval valid for 5 years
www.cantox.com
Consultants in
Human Health,
Toxicology &
Regulatory Affairs
CONCLUSIONS
Marketing Acceptance
• Regulatory requirements for supporting safety
• Testing of materials (analytical/toxicology)
• Prior approvals required
• Chinese representative assistance
• “regulatory acceptance”
www.cantox.com
Consultants in
Human Health,
Toxicology &
Regulatory Affairs
BOOK CHAPTER
• CHINESE APPROACH ON REGULATING FOOD ADDITIVES, NOVEL FOODS, FUNCTIONAL FOODS, AND DIETARY SUPPLEMENTS
• Nutraceuticals and Functional Foods Regulations in the United States and Around the Worldhttp://www.elsevier.com/wps/find/bookdescription.cws_home/715494/description#description
181181181
INTELLECTUAL PROPERTY PROTECTION IN CHINA:
Best Practices
知识产权的保护在中国 :最佳做法
Paul JonesJones & Co. 钟保禄律师事务所 Джоунс и Ко.
www.jonesco-law.ca
Research to RevenueThe Biotechnology Initiative
December 3, 2008
182
简介 - Introduction
• Many foreigners believe that their intellectual property cannot be protected in China
• Consequently they are reluctant to register their IP rights in China
183
简介 - Introduction
• China has IP laws that meet international standards
• Chinese courts do enforce IP rights, and particularly IP rights held by foreign parties
• To a large extent the threat to IP from counterfeiters can be costed and managed
184
简介 - Introduction - 假冒伪劣 - Counterfeiting
“… a tumultuous period in which the rigid hierarchies of colonial times finally dissolved, replaced by the more fluid social order of a democratic commercial society. Self-fashioning and self-advancement slowly became a viable way of life…”
Stephen Mihm, A Nation of Counterfeiters, p.24
185
法院及知识产权的实施Courts & IP Enforcement Lego Case - 英特莱格公司( INTERLEGO . AG ) v. 可高(天津)玩具有限公司 ,
Beijing 2002
Lego was successful under design patent and copyright law
Beijing Higher People’s Court stated:
可高公司的产品确有抄袭之嫌,但同时也应看到英特莱格公司的上述玩具积木块艺术创作程度确实不是很高,与典型的实用艺术作品在艺术创作程度上尚有一定差距,一审法院出于平衡利益关系的考虑,作出上述认定是合理的,本院予以支持。
(While the Kegao Company’s products really have the smell of plagiarism, we should also consider that the level of artistic creation in the English Interlego Company’s products is not really very high and there is a certain disparity between it and typical practical works of art. The court of first instance struck a balance a reasonable balance of the interests and we will support it.)
186
简介 – Introduction – 政府 - Government
1. Unitary State – 31 “Provinces”• Each level of government can exercise the same
powers as the national government • if there is no conflict with the laws of a superior
level of government
2. Consultative Administration• Broad consultations on new laws• Reluctance to be the nail that sticks out
187187
最佳做法 – BEST PRACTICES
1. Register your IP• Trademarks
- as many classes as possible
- develop Chinese character version of mark• Patents
- Do both invention and utility applications- Search Chinese language prior art
• Copyrights- Consider registration to improve damage claims
188
商标在中国 – Trade-marks in China
麦当劳 – McDONALD’S (mai dang lao)
Mai – cover up, bury – 埋- buy, purchase – 买- step, stride, advanced in years – 迈- wheat, a surname – 麦- sell – 卖- arteries and veins – 脉
189
商标在中国 – Trade-marks in China
麦当劳 – McDONALD’S (mai dang lao)dang – equal, ought to, just at, work as, deserve, manage, sound of a
gong – 当- keep off, block, a fender, gear of a car – 挡- political party, the Party (Communist) – 党- earring, eunuch – 垱- crotch – 裆- proper, match, treat as think, that very day, to pawn – 挡- manure pit – 凼- loose in morals, a marsh – 荡- delay – 宕- outspoken – 谠
190
商标在中国 – Trade-marks in China
麦当劳 – McDONALD’S (mai dang lao)lao – scoop up from a liquid, get by improper means – 捞
- enclosure for animals, jail – 牢- work, reward – 劳- old, tough, dark – 老- waterlogged – 涝- bake in a pan – 烙- kind of farm tool – 耢- fruit jelly – 酪
191
商标在中国 – Trade-marks in China
麦当劳 – McDONALD’S – wheat should work
Other Possible Names:卖凼涝 – to sell something that has been
waterlogged in a manure pit
买挡捞 - to buy in order to prevent someone scooping something (perhaps improperly)
192
辉瑞商标的问题 Pfizer’s Trade-mark Problems
Pfizer – VIAGRA
最出名的药物万艾可 ( 伟哥、威而钢 )
193193
最佳做法 – BEST PRACTICES
2. Prepare a Business Plan for China• Select what will be made in China carefully – perhaps
withhold the most innovative or high-margin products, or separate functions so that no one manufacturer makes the whole product
• Make sure that your project is economically feasible – for you and potential partners
• Build monitoring and enforcement costs into your project feasibility plan
• Know your limit on losses from the project in advance, do a thorough risk analysis
194194
最佳做法 – BEST PRACTICES
2. Prepare a Business Plan for China
• Pricing and Channels of Distribution
– For products with broad consumer appeal in China many purchases are made in small retail shops – difficult to monitor and police
– Consider developing a stripped-down, low-cost version of the product for sale in China
195195
最佳做法 – BEST PRACTICES
3. Audits – Know What is Going to China• What are the key commercial elements?• How are they protected?
– Invention patent – utility patent – design patent – copyright– trade secret– trademark
• How valuable are they? Are they older items that have largely become known?
196196
最佳做法 – BEST PRACTICES
4. Find the Right Partner in China
• Retain advisors experienced in China
• Conduct searches through networks, look for introductions
• Attend trade conferences in China, get to know your options and the differences in your industry in China
197197
最佳做法 – BEST PRACTICES
4. Find the Right Partner in China – cont’d.
Conduct Due Diligence:
• Insist upon the right to make background checks on key people and the company
• Conduct checks on the reputation of the local area.
• Hire outside investigators, and use them
• Audit the other side - Carefully evaluate any property contributions by your Chinese partner, disputes over property valuation have plagued joint ventures
• Some prefer partners with foreign trained key personnel
198198
最佳做法 – BEST PRACTICES
4. Find the Right Partner in China – cont’d.
Conduct Due Diligence:
– Know if there is any state interest in the other party
• Does the other party need higher authorization to enter into the contract?
• Does the other party truly own the assets that it is contributing, or does the state still have an interest in the assets – e.g. Danone and the Wahaha trademark – “ 娃哈哈”
199199
最佳做法 – BEST PRACTICES
5. Structure the Deal Carefully
• License, technology transfer, co-operative joint venture, equity joint venture, WFOE?
• What is Plan B – if things don’t work out?
• How to get your money out of China – dividends, payment for services, royalties
– Withholding taxes on royalties now 10%
200200
最佳做法 – BEST PRACTICES
6. Develop a Good Contract
General Items
– Do not use your standard form agreement for North America
– Consider preparing for enforcement in China with a civil law form of contract in Chinese
– Do not rely on the other party as to the legal validity of the terms
– Negotiate in good faith and disclose material facts – required by Article 42 of the Contract Law ( 中华人民共和国合同法 )
201201
最佳做法 – BEST PRACTICES
6. Develop a Good Contract – cont’d.
– IP Issues • Carefully describe the scope of the grant – for
example – territorially what is China?
• Rights to improvements – remember the restrictions on grantbacks
• How will access to the IP be controlled, monitored?
202202
最佳做法 – BEST PRACTICES
6. Develop a Good Contract – cont’d.
– Non-Competition Provisions
• Know the provisions of the 劳动合同法 – Labor Contract Law
• Use side agreements with key personnel
• Draft the scope of the restrictions with precision
• Draft the liquidated damages provisions carefully
203203
最佳做法 – BEST PRACTICES
6. Develop a Good Contract – cont’d.
• Technicalities:– Contract should be in Chinese, or at a minimum, bilingual
– Identify the Chinese party in Chinese characters, as copied from its certificate of incorporation;
– translations vary tremendously and Chinese companies often use short forms of their names in Chinese
204204
最佳做法 – BEST PRACTICES
6. Develop a Good Contract – cont’d.
• Technicalities:
• Specify exact terms of payment and performance
• Ensure that that each page is signed and that the contract is properly signed and sealed. Are two signatures required?
• Make provision for inspections and audits, possibly including for the components or inputs, and use them
205205
最佳做法 – BEST PRACTICES
6. Develop a Good Contract – cont’d.
Law, Forum and Venue:
– Generally China does not enforce foreign judgments, U.S. judgments in particular
– Specify a choice of law that matches your exit strategy
– If you are based outside of China, consider using arbitration, China is a party to the New York Convention on Arbitral Awards
206206
最佳做法 – BEST PRACTICES
6. Develop a Good Contract – cont’d.
Law, Forum and Venue:
• Be careful in choice of arbitrator and arbitration rules, CIETAC has had serious problems recently
• Consider negotiating for the right of discovery - alternatively make plans to collect and retain written records
• Alternatively chose a foreign law, such as Hong Kong, but accept a Chinese court. Chinese courts will try to enforce foreign laws when the parties specify in the contract
207207
最佳做法 – BEST PRACTICES
6. Develop a Good Contract – cont’d.
Law, Forum and Venue:
• Specify a choice of venue, the Chinese party is unlikely to agree to come to North America, in part because of cost considerations, consider Singapore law and venue, or Hong Kong SAR
• There is now an agreement between Hong Kong SAR and Beijing on the reciprocal enforcement of judgments
• If possible chose a Chinese venue in which you have other investments
208208208
最佳做法 – BEST PRACTICES
7. Monitor your IP after Closing
– Inside and outside of China – some are now shipping labels and product separately for assembly in other countries.
– Register trademarks with General Administration of Customs. They can act ex officio in seizing suspected counterfeit goods.
– Visit trade shows, eBay, small commodities markets in key areas of China, wholesalers, key retailers, places where legitimate products are made and sold
209209209
最佳做法 – BEST PRACTICES
7. Monitor your IP after Closing
• Don’t forget internal monitoring
– Implement plant security measures
– Ensure that new employees are trained on security and confidentiality in Chinese
– In supplier’s plants have a representative on site
210210210
最佳做法 – BEST PRACTICES
7. Monitor your IP after Closing
• Don’t forget internal monitoring
- Use surveillance equipment or firewalls on web sites
- Ensure that proper security protocols are in place for trade secrets
- Conduct regular training on security measures
211211
最佳做法 – BEST PRACTICES
8. Develop your 关系 (guanxi) or relationships– Customs officials– Provincial and city authorities– Embassy – Chinese and foreign based trade associations– Local Administration for Industry and
Commerce 工商行政管理局
212212212
INTELLECTUAL PROPERTY PROTECTION IN CHINA:
Best Practices
知识产权的保护在中国 :最佳做法
Paul JonesJones & Co. 钟保禄律师事务所 Джоунс и Ко.
www.jonesco-law.ca
Research to RevenueThe Biotechnology Initiative
December 3, 2008
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia
THANKS TO OUR SUPPORTERS
From Research to Revenue IV:Networking ReceptionFrom Research to Revenue IV:Networking Reception
From Research to Revenue IV:From Research to Revenue IV:Capturing Business Opportunities in AsiaCapturing Business Opportunities in Asia