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Bridge to innovation

Why Chinese biopharmas are building beachheads in Boston

While Zai Lab Ltd. has joined the ranks of Chinese biotechs making a splash on NASDAQ, less noticed may be the first wave of China-based players moving into Boston to jump-start their push into novel drug development.

This year has seen Chinese pharmas like Qilu Pharmaceutical Co. Ltd. and Luye Pharma Group Ltd. open R&D operations in the East Coast life sciences hub, viewing the city as a gateway to top-tier translational science and scientific talent as well as potential partners.

According to eight Chinese executives and investors contacted by BioCentury, scientific talent is the primary draw to Boston.

And while investors are pouring huge amounts of capital into China-based companies, domestically discovered innovative assets remain rare, and therefore expensive. Setting up R&D in a region that is richly supported by both VCs and NIH funding means the innovative translational opportunities are plentiful, even if they don’t come at a discount.

“In terms of innovative drug discovery and research, there is still a gap between China and the Western world,” Lijun Wu, an entrepreneur-in-residence at Atlas Venture, told BioCentury. “That is probably one of the major reasons a lot of Chinese companies are setting up shop in the Boston area.”

The companies say they aren’t looking to Boston as a short-cut to snatch up technologies and transfer them back home. Instead, they are viewing their new subsidiaries as the heart of their innovation strategies. Assuming initial success, each of the five companies that spoke to BioCentury has plans to expand.

Moreover the Chinese executives and investors expect to see more domestic Chinese companies follow this group of first movers into Boston.

Boston advantage

June’s entrance of China FDA into the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH) is widely viewed as a watershed in the government’s wave of regulatory, reimbursement and data exclusivity reforms to create a globally competitive life science ecosystem in China.

The reforms, coupled

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