East-West Biopharma Summit Road Trip

Silicon Valley - Nov 2022 

The final leg of the East-West Biopharma Summit Road Trip took place on November 11th, 2022, in Silicon Valley. This event was co-hosted by Jones Day, BioCentury, BayHelix, BioAroundWorld, and MSQ Ventures.  

The East-West Biopharma Summit Road Trip aims to improve the exchange of innovative ideas, the latest regulatory updates, and market growth opportunities in the biotech and pharma industries. The event brought together senior executives and high-ranking representatives from the east and the west to explore opportunities in the industry and share knowledge and experience. Moreover, it served as a platform for networking researchers, leading global-regional biopharma companies, investment firms, and other industry players. 

The road trip events were conducted in four cities - New York, Boston, San Diego, and Silicon Valley. Representatives from biopharma companies joined the event to discuss global collaboration, investment, and legal issues in the industry.  

The event kicked off with opening speeches from Tony Chen, Partner at Jones Day, and Echo Hindle-Yang, CEO & Founder of MSQ Ventures. They emphasized the importance of global collaboration in biopharma innovation and drug development and focused on closing the knowledge gap within the healthcare field. 

PANEL 1: CROSS-BORDER COLLABORATIONS AND ADVANCING GLOBAL DRUG DEVELOPMENT 

The panel discussion was moderated by Tony Chen, Partner at Jones Day, joined by Echo Hindle-Yang, CEO & Founder of MSQ Ventures, Ji Li, CSO & Director at AffaMed  Therapeutics Scott Liu Ph.D., Chairman & CEO of HanchorBio, Sue Xu, Partner at Amino Capital, Patricia Campbell Ph.D., IP Partner at Jones Day, and Christian Fulda, Partner at Jones Day. The panelists shared their perspectives on cross-border collaborations and discussed how it advances global drug development. 

Global Investment & Collaboration Challenges during the Pandemic 

Echo Hindle-Yang, CEO & Founder of MSQ Ventures, stated that 2022 has been the busiest and most successful year to date, as MSQ closed more cross-border global biopharma deal transactions than ever before. She emphasized that MSQ’s recent success was driven by an increasing amount of global-regional biopharma companies working together and leveraging each other's strengths to remain competitive in the market this winter. However, she noted that even though biopharma companies are willing to cooperate, cross-border collaboration still needs improvement. She stated that differences in countries' cultural, environmental, and political structures may be responsible for the present hurdles. Furthermore, Echo commented that Chinese biopharma companies are changing and are willing to invest in innovative drug development earlier in the pipeline. Additionally, she suggested that companies should remain open-minded when negotiating partnerships as this will foster more robust cross-border collaborations. 

Tony Chen, the moderator of the discussion, alluded that Chinese companies had changed, especially concerning their deal structure. He said that China biotech companies previously paid upfront fees to western companies for collaboration. In contrast, companies now focus on products rather than money when structuring their deals. He noted that this approach was best for business. And that when such products do well in the market, the partnering companies make significant profits for the drugs. 

Ji Li, President, CSO & Director at AffaMed Therapeutics, said Chinese companies are better than they were 5 years ago at picking up the right assets and negotiating better deals with multinational companies. However, he thinks that the current business environment is getting more challenging because the financial terms for collaboration are set so high. Ji suggested that companies consider the valuation of their assets thoroughly when negotiating deals.  

Furthermore, Tony pointed out that the Chinese government's VBP (volume-based procurement) policy of driving down the cost of drugs to the lowest price possible creates major hurdles for drug deal-making and licensing. He noted that drugs in China are typically sold at half or less of the U.S. price. He said this typically impacts negotiations negatively as multinational companies are not certain of getting sufficient returns on their investments through the NRDL policy (National Reimbursement Drug List). Tony suggested that deal negotiations would be more successful if drug protection strategies were implemented in China. Afterward, Tony said his firm helps companies optimize their portfolio to get the best deals in China. Additionally, he remarked that delays in patent licensing are a big obstacle to cross-border collaboration. 

Patricia Campbell, an IP Partner at Jones Day, stressed the need for biopharma to have solid "IP due diligence," especially before generating a patent portfolio. She also remarked that when biopharma companies generate ADC portfolios, they should have all agreements, including patent prosecution issues, properly sorted before licensing. 

Christian Fulda, Partner at Jones Day, remarked that Chinese companies are securing more deals with European biopharma. He noted that cross-border collaborations, especially with China, are important because European biopharma can benefit from China's large patient population, which can help lower the cost of drug development and hasten both the completion of clinical trials and enrollment of drugs. Additionally, he said European and Chinese biopharma have started exchanging innovative technologies. "On the other hand, we have assisted our Chinese clients in exporting biological manufacturing technologies to Europe. Recently, we transferred a unique technology to one of the largest biologics manufacturers in Germany. In this case, technology moved from east to west, contrary to what one would have expected based on historical precedent," Christain said. He noted that there are still some challenges concerning the transfer of COVID vaccine technology from the west to the east, especially from the legal perspective. 

Scott Liu, Chairman & CEO of HanchorBio, remarked that his company favored licensing-out global rights to biopharma companies for non-dilutive equity. He also noted that, unlike mainland China, the biopharma sector in Taiwan, like many other South Asian countries, is not so large. That said, they are not a major player in the biologics space. However, he emphasized that his company is taking steps to become a global enterprise and seek cross-border investments. 

Sue Xu, Partner at Amino Capital, noted that biopharma’s downturn in 2022 has led to dwindling cash reserves, which could impede the growth of budding biopharma companies. However, she also remarked that the present negative market situation makes these companies more willing to collaborate with partnerships. She stated that Amino capital can help companies with investments and secure lucrative deals even in the late stages of drug development. 

Global collaboration in the Life Science industry is essential. All the panelists agreed that there should be an adequate engagement of multiple stakeholders to achieve ultimate success and get the most out of partnerships. The COVID-19 pandemic's significant impact on collaborations has prompted companies to reevaluate traditional collaboration methods and find new ways to improve efficiency and maximize opportunities for global drug development. 

Legal Aspects of Licensing & Intellectual Property Rights Due Diligence 

According to Bing Liang, Partner at Jones Day who handles patent portfolio development, intellectual property (IP) due diligence is a critical component to ensure smooth transactions. She suggested that IP issues should be taken into consideration early to help withstand due diligence scrutiny to enable a strong foundation and future global investment opportunities. 

Patricia Campbell, who also works on patent prosecution counseling, highlighted the importance of looking thoroughly into underlying licenses. It is important to make sure the underlying licenses are problem-free now and down the road, if purchased by the biopharma company. Original licenses from start-up companies, for example, may include prohibitions that could result in significant unnecessary damages later. 

Christian Fulda, who facilitates deal-making and represents the legal side of pharma collaborations, commented that the movement of technology from east to west is a new trend, as evidenced by a deal he facilitated that involved a Chinese biomedical manufacturing technology adapted in Europe. "Collaboration aids in the transfer of technology while protecting intellectual property rights," he said. 

Despite the success of some biopharma companies, several public companies suffered losses during the pandemic and continued to seek global investment from family offices and other private investors. Sue Xu stated that they would be glad to enter into agreements with small start-ups with promising innovative technologies, such as AI-driven drug discovery. It cannot be emphasized enough that proper IP due diligence must be ensured in these transactions. 

The panel discussion was followed by two company presentations. Mike Yun Zhao, PhD., Director of Business Development at ArriVent Biopharma shared his insights into Business Development and Licensing Trends in Asia. Scott of HanchorBio shared his experience in Navigating the New Territory in Immuno-Oncology Through the Development of Multifunctional Fc-Based Designer Biologic.  

The event concluded with productive networking among the attendees. The event was a success with the collaboration of participating companies. The East-West Biopharma Summit will continue to forge flourishing partnerships and cross-border collaboration to facilitate innovative drug development.