George Baeder
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When European scientists needed to quickly understand the genetic structure of a deadly new strain of E. coli bacterium sweeping through Germany this past summer, they turned for aid to what might have seemed, at first blush, an unlikely
source: a company headquartered behind a truck repair depot in a former smuggler's village in Southern China.
Yet BGI, formerly known as the Beijing Genomics Institute, has quietly become one of the world's most powerful sequencers
of genetic structures, a key skill that will help diagnose disease and build biomarker maps that could lead to breakthrough
drug developments. Not only did BGI help European health officials decode the strands of the mysterious bacteria in a mere
three days, its analysis also concluded that this strand—which killed 17 people and sickened more than 1,000—was both new
and super-toxic.
Based in the Yantai district of Shenzhen, about an hour's drive from Hong Kong, BGI now houses the world's most concentrated
array of powerful genetic sequencers, and aims to become the "sequencer of choice" for drug firms and disease fighters across
the globe. It is also moving aggressively to develop a proprietary software platform that genetic scientists would call upon
to unravel genetic mysteries and speed development of new drugs. "We intend to build the platform the rest of the world's
scientists will use," explains Yang Huanming, one of BGI's founders. "Our goal is to sequence anything and everything in the
world."
At a time when the life sciences industry in the West is beset by patent cliffs, rising regulatory hurdles, and the declining
productivity of its research and development pipeline, China's life sciences industry is quietly gathering a critical mass
of skilled talent, and savvy and focused venture investors, all tied to increased support from the Chinese government. While
BGI remains a private firm, its top leaders candidly acknowledge they could not grow as quickly without the financial support
of the government, which has grown to recognize that the life sciences industry offers the nation breakthrough opportunities
in drug development and innovation.
New Investments in Life Sciences
Investments in new life sciences labs, biotechnology parks, and incubators fit nicely into its goal to see the nation transformed
from a low-wage manufacturing power to a source of high-value "indigenous innovation." China's next five-year plan will allocate
at least $1.5 billion to stimulate cutting-edge biological research. Provinces around the country are offering incentives
to expand the more than a dozen life science research parks that are already up and running. At the same time, policymakers
are looking at innovative ways to launch electronic medical records as a critical tool to manage patient needs, with an aspiration
to create a vast source of clinical data.
Today, firms like BGI are able to win support from the Ministry of Science and Technology (MOST) for some of their most ambitious
endeavors, even as they create partnerships with top domestic and foreign research laboratories. More than simply building
hospitals and funding labs, however, the Chinese government is using its so-called "Thousand Talents" program to actively
recruit top Chinese scientists and business experts who have trained in the West, incentivizing them to return to their homeland.
The effort to woo Chinese into returning home is taking place at a time when many Western firms are being forced to reduce
their spending on R&D. A survey published last fall by Monitor Group estimated that at least 80,000 Chinese-born, Western-educated
PhDs have chosen to return home after studying and working in Western pharma firms. With access to venture capital and business
experience in the West, they hope to leverage China's raw talent and cost-effective laboratories to rapidly develop and test
promising molecules.
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