China’s booming biotech, from a brain implant to drug discovery

[MUSIC PLAYING] IRA FLATOW: Hi, I’m Ira Flatow, and you’re listening to Science Friday. In March, China became the first country to approve an invasive brain computer interface beyond clinical trials. The implant, called NEO, is made by the Chinese company Neuracle Technology. It’s now available to some patients with limb paralysis due to a spinal cord injury.

So how soon will it be available worldwide? And is this the start of a major new industry? Joining me now to help answer some of the unknowns is Emily Mullin, a staff writer at Wired who’s been covering the brain-computer interface industry in China and the US. Welcome to Science Friday.

EMILY MULLIN: Thanks for having me.

IRA FLATOW: So, Emily, just how significant is this milestone for brain-computer interface technology?

EMILY MULLIN: I would say this is a pretty significant milestone, not only for China but also for the worldwide brain-computer interface field. It shows that China has caught up with the US in terms of BCI technology. And it also shows that these devices are commercially viable.

IRA FLATOW: Tell me a bit about the implant. Can you describe it for us, how it works?

EMILY MULLIN: Yeah, so as you said, this device is called the NEO. And it doesn’t go into the brain directly. It actually rests on top of the brain’s protective membrane, called the dura mater. And it pairs with a soft robotic glove to enable a gripping action for people who have lost the use of their hand.

The system was tested on about three dozen people in trials. And China has now started incorporating it into the country’s health systems, so we could see this rolled out soon to patients.

IRA FLATOW: How similar is this to other BCIs that other companies are currently developing?

EMILY MULLIN: Yeah, so one of the companies you might have heard of in the US is Elon Musk’s Neuralink. And Neuralink is developing this coin-sized implant with thin electrode threads that actually reach into the brain tissue. So that’s a little bit different than this device that China has just approved.

Now, there are other companies, such as Synchron, for instance. They’re based in New York. They are developing a little stent-like tube that actually fits into a blood vessel and is pushed up through the blood vessels so that it rests actually against the brain. So there are all sorts of designs that are being developed and being investigated for different uses.

IRA FLATOW: Yeah, that’s interesting. Could we see a bunch more similar devices approved in China soon?

EMILY MULLIN: There are several companies in China that are now developing brain-computer interfaces, so I think we are probably likely to see over the next couple of years more approvals like this. The government officially designated brain-computer interfaces as a strategic industry, and the country’s latest five-year plan lists BCI, or Brain-Computer Interface, as one of six key industries that are important to China’s future tech competitiveness.

So this is China saying, we are serious about the field. We are investing in it heavily. We’re really staking it out as an area we feel like we can be competitive in.

IRA FLATOW: And this is an important statement. China’s saying, we have arrived.

EMILY MULLIN: Yeah, absolutely. Here, in the US, there are a handful of companies that are testing these devices in clinical trials, but that process here in the US is a little bit slower. It seems like there are some talks between the FDA and device companies that are still ongoing, but certainly Neuralink and then Synchron, another company, developing a brain-computer interface, those companies are really poised to go into these bigger trials.

I think this will be an interesting test case for not just the US but also globally in terms of how viable this technology is commercially. But also from the patient perspective, how useful are these devices in everyday life?

IRA FLATOW: It’s interesting you say how useful are these devices in everyday life. What kinds of everyday-life applications are we talking about here?

EMILY MULLIN: Yeah, so most companies are focusing on applications for individuals with paralysis who have lost the use of their limbs. And Neuralink, for instance, they are developing a BCI to allow people to type on a computer, play video games with just their thoughts alone. So these devices, at least right now, are being imagined as an assistive device, tools for people to get back some of their independence.

IRA FLATOW: We always hear about stuff that works really well in the laboratory situation. How will we know if it really works out there in the real world for patients?

EMILY MULLIN: So one of the things about these devices is that most of them have to be calibrated before each use. I have visited a BCI trial participant, and actually a field the engineer comes to visit him every week and sets up the system so that he’s able to use it. He can’t actually turn it on and off by himself, and he can’t do the calibration himself.

So I think that’s going to be one of the things that is going to need to be figured out in this process of trials and in the commercial space is, will patients really be able to use them independently? How much are they going to need to rely on somebody else to use a device that’s meant to restore independence?

IRA FLATOW: Emily Mullin, staff writer at Wired. After the break, a look into what’s driving China’s biotech industry boom. Stay with us.

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Now, it’s not just China’s brain-computer interface sector that’s growing. The country’s entire biotech industry has skyrocketed in recent years. A decade ago, about 8% of new drug molecules were discovered in China. Now it’s over 40%.

And more clinical trials are now being conducted in China than in the US or Europe. And most recently, pharma juggernaut Bristol Myers Squibb signed a $15 billion deal with a Chinese company to acquire several early-stage drug candidates. Has the center of gravity in biotech moved from the US to China?

My next guest has been following the Chinese pharma industry’s meteoric rise. Doctor So-Yeon Kang is an assistant professor of health management and policy at Georgetown University in Washington, DC. Welcome to Science Friday.

SO-YEON KANG: Thank you for having me.

IRA FLATOW: Nice to have you. Tell us, what is driving this enormous growth of the Chinese biotech industry?

SO-YEON KANG: That’s a great question. And China’s rise in biotechnology is not just a random or overnight event. It’s the result of more than a decade of coordinated investment in science, research, and regulation in biotechnology industry. And I think it’s really a two-part story.

First, is that the way that the pharmaceutical companies develop drugs has changed a lot. So our traditional image of big pharma companies, like Pfizer hire an army of PhDs from biology or chemistry PhD and run their own lab, discover drugs, and patent them, develop the drugs, and commercialize them, so a one-stop shop model. But it changed a lot.

And they now, of course, do have their own laboratories. But also to search for the newer drug candidates, so they send these people to China, Singapore, South Korea to find the promising drug candidates. And second part is, again, China’s investment in this drug industry and the transformation of their ecosystem toward more innovation from manufacturing.

IRA FLATOW: Are there specific parts of the biotech industry where Chinese companies are excelling, so to say?

SO-YEON KANG: So China is known for sort of a “factory of the world” concept, so the primary supplier of generic drugs. But now they are really doing well in early-stage drug development. When you say early-stage drug development, it means that it includes the early-stage drug discovery and also the preclinical research and the phase I and phase II clinical trials.

IRA FLATOW: Why are they better at doing that?

SO-YEON KANG: That’s another important area that we need to explore and investigate further. But what I hear a lot is about their speed and cost. So starter companies, as you can imagine, like in a small startup companies, they run on very limited funding that they raised from venture capital firms. So they have limited time and limited amount of money, for example, like $20 million for 20 months, something like that.

And time is money, and they have to show the promise within that 20 months of the timeline. And if they fail, then they cannot actually survive because it’s kind of binary nature for the biotech companies. Survive, or fail.

And China now offers very cost-efficient models like it’s a lot easier to recruit the patients in clinical trials. And also they offer very favorable regulatory environment. And also they have built some very effective clinical trial infrastructure. So that combination of this pool of patients and also efficiency around the clinical trials and also the money involved in that really make attracting lots of starter companies to run these clinical trials in China.

IRA FLATOW: Yeah, so that’s an important point, companies getting additional money from the government, even if they fail at first.

SO-YEON KANG: Exactly.

IRA FLATOW: So how common is it for American or European companies to source early-stage drug candidates from China?

SO-YEON KANG: Increasingly more and more drugs are coming from these Chinese companies. So about half of the new drug licensing deals were about these drugs developed in starter companies in China. And also, like you just mentioned, the Bristol Myers Squibb, the recent licensing deal, they signed this licensing agreement with Hengrui Pharma in China for about $15 billion for 13 drug candidates across different therapeutic categories.

So it’s a huge deal, $15 billion–

IRA FLATOW: Wow, that is something.

SO-YEON KANG: –for 13 candidates.

IRA FLATOW: With the Chinese government willing to fund these companies and with the companies themselves, like Bristol Myers, making deals with China, how disruptive could China’s ascent in the biotech industry be to the global pharmaceutical industry?

SO-YEON KANG: That’s $1 million question, I’d say.

IRA FLATOW: It’s a lot more than a million, isn’t it?

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SO-YEON KANG: Billion dollar question, might be. Yeah, because that’s a topic debated a lot recently. Pharmaceutical companies, so they send people not because the drug is in China, but because that’s where science is, where the innovation is. They want to maximize their profit, also maximize the efficiency.

They naturally just pursue where the opportunities, where the promising candidates are developed. But for the big picture, like as you mentioned, the global pharmaceutical industry, we don’t how the other countries and companies can survive with this intensifying competition. But now we cannot ignore some geopolitical issues.

And also we have lots of uncertainty about, what would happen if the majority of drugs are coming from China through this licensing agreements, things like that? And also we don’t have the immediate answer to, what would be the consequence of this on the US pharmaceutical ecosystem and infrastructure and human capital?

IRA FLATOW: Yeah. Are we going to see less talent coming to the US and just staying in China to develop these new drugs?

SO-YEON KANG: That’s an excellent question too. And for example, previously, when brilliant people came to the United States for their PhDs or training and postdoc fellowship, they tend to stay in the US companies and also US ecosystem. And they really contributed to the innovation within our country.

But now the China’s biopharmaceutical industry, biotech industry itself has the capacity to develop their own talent and also to retain their talent and also to feed the next generation of the talents, too. That’s another area that we need to pay attention to as well.

IRA FLATOW: So we might soon see drugs that are created from start to finish in China reaching the US market, not just American companies buying early-stage candidates from Chinese companies.

SO-YEON KANG: Yes, I think that’s a fair concern because China, as you know, has this amazing manufacturing facilities and infrastructure. And even though it’s currently mostly focusing on generic drugs, and down the road, they may want to develop some sort of cell therapies and gene therapies and manufacture them within China. Then it means that they may just own this entire ecosystem from discovery, development to manufacturing and commercialization too.

IRA FLATOW: Could the American companies and the American government see that as a threat to the security of American pharmaceutical industry?

SO-YEON KANG: Oh, yes. We increasingly see these kind of policy debates and discussions around the role of China and also how to handle this kind of investment going to China from the US. And also there are discussion about banning some licensing deals with Chinese companies or certain companies in certain markets.

But that’s not something that any people or the stakeholders in this ecosystem want to see because, as I mentioned earlier, this is about innovation and science. And completely banning or disrupting the natural economy and also the economic behaviors, that can have unintended consequences on patients’ access to needed treatments. So that approach should be very, very careful, and we want to approach this as competition perspective, not as some trade war or any sort of banning the transactions in– yeah.

IRA FLATOW: What about the price of drugs? Could this drive down the price of drugs if China gets really to be one of the superpowers in the pharmaceutical industry? Or would it drive the price up because you might have a monopoly?

SO-YEON KANG: In theory, if we obtain the drugs developed in lower-cost setting, then we may want to see that the drug actual price lower than in the previous settings. But now we don’t have any evidence to support any direction.

And also, from the manufacturer’s perspective, they may not be the motivation for them to lower the price because, as I mentioned, Bristol Myers Squibb paid $15 billion. So it’s no lower than any other deals that they made with other American companies too. So for them, a lowering the drug price is not– I don’t think that that’s on their agenda.

IRA FLATOW: Is there room, then, for cooperation between the US and China, instead of viewing it as a competition? Or is it this just how business is done?

SO-YEON KANG: Absolutely. So there is lots of discussion about how to coordinate and harmonize these regulatory systems and also how to co-develop drugs. So there are ongoing, some parallel discussion about this.

But in the meantime, we need to pay attention to, how we can make this in the US system stronger? Because this innovation is a long game. And once we lose the resource and infrastructure, it’s really hard to rebuild. So what are the kind of consequences and implications of this shift on the US ecosystem as well as the local economy supporting this biopharmaceutical innovation?

IRA FLATOW: Thank you for being with us today.

SO-YEON KANG: Thank you very much.

IRA FLATOW: Doctor So-Yeon Kang is an assistant professor of health management and policy at Georgetown University in Washington.

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Before we go, we’re working on a segment about AI in the doctor’s office, and we want to know, are you a doctor? And have you used platforms like OpenEvidence? What do you think about other doctors using AI? Or are you a patient whose doctor used AI during your care?

Please tell us your story and your thoughts at 1-877-4-SCIFRI. This episode was produced by Shoshannah Buxbaum. I’m Ira Flatow. We’ll catch you next time.

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