Faced with the greatest global healthcare crisis in a century, the biotech industry has flourished during the pandemic, as demand for Covid-19 test kits, antiviral drugs and vaccines has skyrocketed. Because of its unique advantages, Hong Kong is ideally placed to capitalize on the boom in this sector.
Hong Kong is a natural home for biotech, with five universities inside the top 100 of the QS 2021 World University Rankings, and the medical schools of the University of Hong Kong and the Chinese University of Hong Kong ranked among the 50 best globally in the same rankings. Building on that strong academic base is the Hong Kong Innovation & Technology Commission (HKITC) and the biomedical research cluster at Hong Kong Science & Technology Parks Corporation (HKSTP), which together have backed hundreds of ventures including successful local biotech startups such as Acaderma Asia and Sanwa BioTech.
“HKSTP has given us tremendous support during our early years as a small-scale startup and provided us with an international platform to accelerate our success,” says Kelvin Chiu, CEO of Sanwa BioTech, a diagnostics solution innovator with an advanced microfluidic-technologies platform in Asia. Chiu says HKSTP and HKITC provide startups with several funding schemes, such as the Innovation & Technology Fund, on top of offering world-class facilities at existing sites and investing in new locations such as the Advanced Manufacturing Centre (AMC) in Tseung Kwan O Industrial Estate, which is slated to open in 2022. Sanwa BioTech will base its new manufacturing facility at AMC, and Chiu believes the move will help the company scale by expanding its manufacturing capacity to enable it to supply its diagnostic products to Asia and other markets around the world.
This dynamic support structure and generous funding environment has attracted a slew of international businesses, including ACT Genomics, an integrated biomarker solution leader in Asia for precision cancer management with operations in Taiwan, Japan, Singapore and now Hong Kong. In 2019, ACT Genomics decided to open a facility in Hong Kong due to HKITC and HKSTP “actively promoting the biotech industry,” says the company’s Chief Financial Officer Victor Chan. “When we started considering establishing a world-standard [next-generation sequencing] lab in Hong Kong, we got strong support from HKSTP in terms of site preparation, infrastructure and facilities,” Chan adds.
Chan says Hong Kong’s location, on the doorstep of mainland China and as an integral part of the Greater Bay Area economic zone, is another reason that biotech companies are flocking to the territory, not only for the potentially huge market, but also the chance for regional collaboration fostered by the city’s innovation agencies. “HKITC and HKSTP have provided a very attractive environment, both physically and intellectually, for partners to interact for further scientific and innovation advancements,” he says.
Outside of government support, Hong Kong’s world-class financial infrastructure is also proving a boon to biotech. With the focus on R&D, biotech startups rarely generate meaningful revenue, let alone profit, and this can prove an obstacle in raising capital. But a recent rule change by HKEX has made the city a mecca for biotech listings.
In 2018, HKEX allowed qualified biotech businesses to list on the exchange before earning revenue, and the resultant change has seen dozens of companies go public, including Innovent Biologics, CanSino Biologics and Alphamab Oncology. With billions of dollars raised and more companies looking to list, Hong Kong has, in less than three years, become the second-largest biotech fundraising center in the world after the U.S.