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Thursday, April 17, 2008 | When Chinese-born biochemist Zhenping Wu arrived in the United States to work in San Diego’s budding biotechnology sector 20 years ago, he never would have imagined that he would eventually be drawn back to his homeland by better opportunities to satisfy his passion for developing new drugs.

Wu, former senior director of research at San Diego-based biotech firm Phenomix, moved to Shanghai last week, becoming the latest in a wave of veteran Chinese biotech researchers who have left San Diego for higher salaries, promotions and enticing research prospects in China. Foreign-born researchers who eventually return to their home country, like Wu, are known as “sea turtles” in the biotech industry.

These researchers were initially drawn to San Diego because of well-funded research opportunities at universities and handsome salaries offered by pharmaceutical companies here. But with China’s life science industry booming due to a combination of inexpensive talent, a large patient population willing to ingest experimental drugs, and a range of government incentives, many Chinese-born, San Diego researchers, like Wu, are heading home.

Wu and others who have left or are leaving to China say they can earn more money, be promoted to supervisory roles, and train high-caliber junior talent recruited from Chinese universities, when they make the move.

Wu is undergoing just such a transition. In San Diego, Wu was a leading researcher at Phenomix and Pfizer beforehand, but in China he will ascend to the rank of vice president of development for a Chinese-based cancer and immune disease drug discovery company called Hutchison Medipharma. The company is owned by Li Ka-Shing, the 11th wealthiest man in the world, according to Forbes magazine.

“There have been at least 40 to 50 Chinese-born researchers who have left San Diego in the last three to five years,” said Zhu Shen, an active member of the Sino-American Biomedical Pharmaceutical Professionals Association, a non-profit that connects Chinese scholars and professionals living in Southern California. Shen, who also heads her own biotech consulting company, BioForesight Inc., based her estimate on the number of Chinese researchers that have left the association in recent years.

Despite the departure of these researchers, members of the San Diego biotech industry, like Shen, warn against worrying about a prospective brain drain. Instead, they say San Diego biotech executives should be creative in using opportunities in China to expand their own business.

“On the one hand we’ve lost some outstanding researchers, but on other hand this could generate future opportunities for people staying in San Diego,” Zhen said. “There is the potential for future partnering collaborations, and increased access to bigger markets overseas that companies here may not otherwise be exposed to.”

For Wu, the managerial experience he gained in San Diego made him an appealing asset to Chinese companies like Hutchison Medipharma that struggle to find candidates who can navigate international drug approval regulations and lead a team of researchers.

“Chinese companies want people with managerial experience, and know what it takes to meet U.S. regulatory standards, but someone like that is not that easy to find in China, they have to lure them back from the U.S. or Europe,” said Ming Guo, vice president of manufacturing at Ascenta, a clinical-stage company that develops cancer drugs in both San Diego and China.

“But these companies can’t give them the salary that they give to locals. They have to give them more money, or at least a comparable salary to what they would earn here,” said Guo, general manager of Ascenta’s Shanghai research and development center.

The Chinese Talent Pool

Beyond reaping the financial benefits of possessing scarce skills in the Chinese biotech market, Wu is also excited about the pool of Chinese entry-level scientists with advanced degrees in biology and chemistry eager to become engaged in drug innovation, but don’t charge nearly as much for their work as an American scientist.

“There is an opportunity to do groundbreaking research in China now because of a huge talent pool,” Wu said. “There are many recent graduates who are excited to do drug innovation in China, and it’s possible to hire them at a fraction of the cost you would pay in the U.S.”

While veteran biotech researchers like Wu stand to make more money and enjoy a promotion in China, scientists without his level of experience who are trained in China serve as a source of cheap labor for the large companies that employ them.

“In China, you can pay $500 a month for an entry-level scientist with a master’s degree. Here you would have at least $4,000 a month for someone of that caliber,” said Robert Chang, former president of Applied Biotech Incorporated, a diagnostics company with a subsidiary that performed manufacturing in China.

Historically, the Chinese pharmaceutical industry has been largely focused on the production of generic drugs, and steered clear of creating new and novel products. But with recent government emphasis on drug innovation, excitement among local entry-level researchers to perform the necessary investigational work has also climbed.

A 2004 study says that novel products only represent 3 percent to 7 percent of China’s biotech market.

“Since they have very few chances of participating in truly innovative clinical research, young doctors take these opportunities very seriously and are willing to work additional hours on top of treating patients to do drug research,” said Joanne Chen, chief operating officer of Fountain Medical Development Corp., a New Jersey company that conducts clinical trials in China.

Hutchison Medipharma, Wu’s future employer, has successfully attracted not only scientists with Western training, but also the attention of Western-based companies like Eli Lily and Merck.

The Allure of Pure Patients

Pharmaceutical companies of this scale are increasingly turning toward places like China because they can save time and money by testing their drugs and medical devices on Chinese rather than American patients.

Dan Zhang, Fountain Medical Development Corp. president, said the concentration of patients at hospitals, and the specialization of medical centers throughout China, can greatly accelerate the pace of a clinical trial, and reduce the costs of enrollment.

“Once you get approved to conduct clinical drug trials, enrollment is very fast. On average you can complete a clinical trial at least four times faster in China than you can in the U.S.,” Zhang said.

Representing one-fifth of the world’s population of 6 billion people, the country naturally has more patients, Zhang added.

The results of clinical trials held in China can also be more meaningful than trials held in the United States because patients in China are not exposed to as many drugs as American patients, making it easier for scientists to identify whether the effects they are seeing in a subject’s body are a legitimate response to the drug they are testing.

As a result of an ongoing migration of rural Chinese citizens to urban centers, Chinese metropolitan hospitals have experienced an influx of fresh patients whose bodies have not been exposed to many prescription drugs, particularly Western drugs. These city newcomers make for ideal targets for clinical testing, and play a role in attracting top-notch scientific talent to China.

“China has more treatment-naive patients than the United States,” said Zhang, using an industry term that describes patients who have not ingested a lot of prescription drugs and medicine. “Partly because so many patients in rural China have difficulty accessing a quality healthcare system, so now that they have arrived in cities, those patients want to access it now.”

According to an analysis completed by the Financial Times in 2007, China is one of the fastest growing locations for clinical trials, with 510 trials underway or completed at the time of the analysis, having passed India, which had 471 trials.

China’s biotech and biopharmaceutical industry grew 30 percent annually between 2000 and 2005, while the pharmaceutical industry as a whole grew only 19 percent, according to a different 2007 study.

The Safety Standard Question

With drug production for global markets on the rise in China, pharmaceutical watchdogs based in the United States are growing increasingly alarmed due to differences in Chinese and American regulatory standards.

“In general, China is way behind us in developing a proper regulatory system for human trials and manufacturing standards,” said Sidney Wolfe, director of health research for nonprofit consumer advocate Public Citizen. “The implications of this for the public are that it is more likely that drugs coming from China will present more problems.”

Wolfe cited the recent recall of Baxter International Inc.’s blood thinner, heparin, which was manufactured in China and linked to 62 deaths and hundreds of allergic reactions in the U.S. and Germany.

Chinese biotech and pharmaceutical industry executives assert that drugs made in China must meet the same safety standards as those made in the United States in order to be sold here, but this assurance is not enough to appease the concerns of scientific integrity advocates.

“In theory, simply because the work is being done abroad, doesn’t mean that the regulatory standards have been reduced,” said Merrill Goozner, who heads the Integrity in Science Project for the Center for Science in the Public Interest, a food, health, and science watchdog in Washington, D.C. “We have systems in place to double check and make sure that our standards are met, but the problem is that the FDA has been systematically underfunded and deregulated for the last three decades and has no capacity to effectively monitor what is being done abroad.”

Earlier this week, Health and Human Services Secretary Mike Leavitt said the Food and Drug Administration plans to open an office in China to increase oversight of products made for American consumption.

While U.S. oversight is poised to increase, biotech research in China shows no sign of slowing down, as the Chinese government continues to offer strong financial incentives to help the country become a magnet for the industry.

Zhangjiang High Tech Park in Shanghai is one of the numerous industrial parks built by the government throughout China. The park is home to Sundia MediTech Company, Ltd., a biotech outsourcing company started by Xiaochuan Wang, a former scientist at Neurocrine Bioscience in San Diego.

“The government has offered a 5-year, 50 percent tax break policy to attract high tech investment programs, such as IT and biotech … Sundia got that tax break,” wrote Tang Ming, chief operating officer for Sundia, in an e-mail. Sundia is one of approximately 1600 companies based in Zhangjiang.

Ming said that while many of the companies based in the park are large multinationals, most of them are start-up companies like Sundia, started by returnees to China.

Correction: The original version of this story mispelled Zhu Shen’s name. We regret the error.

Please contact Joaquin Sapien directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.

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