At first glance, tiny and crowded Hong Kong may not look like an obvious destination for developing next-generation gene therapies, for all its financial firepower and international complexion. Delve deeper, however, and its distinctive and differentiated offering becomes ever more apparent.
“While Hong Kong’s biomedical ecosystem certainly still lags behind more established life sciences hubs in terms of supply chain depth and production scale, it offers particular benefits that support the innovation goals of outfits like ours,” affirms Hua Zhang, vice president and chief scientific officer at SPH Biotherapeutics, the cell and gene focused research affiliate of Shanghai Pharma.
For instance, “the city provides open access to global knowledge resources and scientific literature, unrestricted procurement of international equipment and reagents, and a seamless digital infrastructure, all of which are difficult to replicate in the mainland due to internet restrictions and cross-border regulatory hurdles,” he explains.
So, although conducting R&D in the special administrative region can be comparatively expensive, “for any company that can be insulated from financial pressures thanks to strong backing from a parent company, it is likely to be a step nonetheless still worth taking,” he reasons.
Hybrid Operations
Indeed, a growing number of Asian biotechs are now going as far as to establish hybrid operational structures intricately designed to leverage the complementary strengths of both Hong Kong and mainland China. GenEditBio, a technology platform company and a therapeutic developer specializing in gene editing serves as a case in point. “We took a deliberate decision to anchor our upstream research and early development activities in Hong Kong, where we have established a dedicated scientific team supported by strong institutional infrastructure,” details the company’s co-founder and chairman, Professor Zongli Zheng.
Then, for downstream processes such as manufacturing scale-up and later-stage development, GenEditBio tends to collaborate with Contract Research Organisations (CROs) and Contract Development and Manufacturing Organisations (CDMOs) in mainland China, which offer greater depth and capacity at scale. “This dual-centre approach enables us to move efficiently through the value chain while maintaining scientific rigour and operational flexibility, thus establishing a competitive advantage over our peers,” he elaborates.
Shanghai Pharma, through its affiliate, mirrors this setup, drawing a clear distinction between functions performed in Hong Kong and those managed from the mainland, enabling the company to pursue innovation with agility while remaining fully compliant with regulatory expectations.
“Our Hong Kong team remains lean, flexible, and focused exclusively on research and early-stage development. We are not subject to local regulatory oversight for advanced therapy medicinal products, which allows us to move swiftly without encountering procedural bottlenecks,” confides Zhang.
Manufacturing and regulatory execution, however, remain centralised in Shanghai, supported by dedicated quality assurance and quality control infrastructure. “This arrangement, pairing the intellectual openness of Hong Kong with the operational gravitas and heft of Mainland China, has served us well and remains integral to the advancement of our ten active development programmes across paediatric and adult haematological malignancies, as well as solid tumours,” he adds, noting that the organisational model frees up the Hong Kong-based team to operate with singular focus on discovery and preclinical development while simultaneously leveraging the regulatory maturity and manufacturing scale of the parent organisation in the hinterland.
Sweet Spot in a Globalised Marketplace
Other actors, meanwhile, forecast a privileged role for the Chinese entrepôt in international biomedical supply and development chains because of the prevailing governing formula of ‘one country, two systems.’
“The special administrative region’s unique status positions Hong Kong as an obvious strategic interface between mainland China and international markets, and a credible and connected node in the global biopharmaceutical ecosystem,” reflects Dr Gina Jiang, managing director of the Hong Kong Institute of Biotechnology (HKIB). “In the near term, it can serve as a launchpad for Chinese companies aiming to diversify globally. Longer term, it might equally support multinational firms seeking to enter China through a more familiar, internationally aligned regulatory environment,” she conjectures.
Professor Pengtao Liu, managing director of the Centre for Translational Stem Cell Biology (CTSCB) agrees. “Hong Kong’s exceptional value proposition is that is serves as a gateway simultaneously providing dual access to international markets, and the extensive clinical resources of mainland China, which is, of course, the locus of a disproportionate volume of cell and gene trials,” he observes.
For Chinese cell and gene-focused biotechs, in particular, it can make a lot of sense to maintain a Hong Kong footprint, as the entrepôt offers the strategic logistical advantage of allowing therapies produced and tested locally to be exported internationally without many of the restrictions placed upon those manufactured on the mainland.
This becomes especially pertinent given the current pricing structures in force. “Most China-based biotechs will, at some time or another, be looking to spread their wings and expand internationally because of price controls on the mainland, which cap the price of therapies like CAR-T at RMB 1.2 million (USD 167,000) per dose. This affordability challenge motivates many companies to explore markets where pricing structures might offer larger returns,” explains Jiang. “And, if you are seeking to penetrate established, more lucrative Western markets such as Europe and the United States, then routing your business via Hong Kong can be a logical, comparatively easy, and effective strategy,” she reasons.
Enhanced Chemistry, Manufacturing & Controls
Some CDMOs have already positioned themselves to try and capitalize upon this emerging dynamic. “Our vision was to build a facility that not only serves the local ecosystem, but also taps into cross-border product development by offering both regulatory alignment with international benchmarks combined with strategic proximity to the Mainland China market, including integration opportunities through the Greater Bay Area,” recounts Dr Camie Chan, CEO of Xellera Therapeutics, the first ever commercial facility in the special administrative region be granted a license for cell and gene manufacturing.
She anticipates increasing scope for business from Chinese cell and gene therapy developers, many of which have already conducted early-stage development through investigator-initiated trials (IITs) on the mainland, but who will still require upgraded Chemistry, Manufacturing and Controls (CMC) systems if they are ever to be eligible to pursue FDA or EMA approval.
The HKIB’s Gina Jiang reinforces this sentiment. “Possessing a facility that adheres to PIC/S standards for GMP represents a considerable advantage. Currently, there are 10 countries in Asia Pacific with regulatory authorities that are PIC/S members. This standard acts like a passport for multinational sponsors looking to conduct trials across multiple centres, including Hong Kong, Malaysia, Thailand, and Singapore, among others,” She explains. Crucially, China is not yet a member, leaving Hong Kong, as part of the club, serving more or less as a staging post where Chinese companies can conduct CMC locally prior to being able to export globally.
“Maintaining a footprint in Hong Kong furnishes us with a bilingual environment and documentation systems fully harmonised with global standards, while the region’s robust IP protections provide a secure framework for clients sharing proprietary processes and technologies,” claims Chan. “These combined assets position Xellera as a trusted partner for biotech companies aiming to bridge early innovation with commercial execution in a complex and increasingly globalised CGT environment and situate us at the forefront of ATP technology transfer between East and West.”
Moreover, thanks to a strategic partnership with another GMP-certified CDMO in Australia called Cell Therapies, the company can now offer seamless multi-site manufacturing and clinical trial capabilities straddling Asia-Pacific and Oceania. “With Hong Kong acting as our regulatory and CMC linchpin, we can design PIC/S-compliant client programs with built-in multi-jurisdictional flexibility,” she assures.
Continuous Convergence
What is increasingly apparent is that Hong Kong’s relevance as a next-generation biomedicine hub is inextricably bound to its geopolitical positioning and connectivity to the broader CGT landscape. Not only is much of its added value a direct consequence of the interplay between the Chinese megamarket and mature Western jurisdictions, but closer integration is seen by many market insiders as an essential prerequisite to the entrepôt being able to deliver upon its lofty ambitions.
“Further enhancing Hong Kong’s assimilation within the Greater Bay Area innovation ecosystem will be pivotal for sustaining the momentum,” counsels Professor Pengtao Liu. “For it is only through an accumulation of interactions across the scientific, entrepreneurial, and investment domains that sufficient a critical mass will emerge.”
“With its relatively small domestic patient pool, Hong Kong stands to benefit handsomely from enhanced integration with neighbouring markets,” agrees Lawrence Wong, general manager at Ferring Pharmaceuticals. “The logical next step in its development trajectory would probably be to explore how the city can effectively offer high-end and advanced medical services with expedited access of innovative therapies, not only for people in Hong Kong, but also those in need with the region including the Greater Bay Area, China and South-east Asia,” he posits.
Meanwhile ,the establishment of the Greater Bay Area International Clinical Trial Institute (GBAICTI), reflects one of many concerted efforts underway to better harmonize trial registration and regulatory processes.
“While cross-border product and patient flow still face various limitations due to differing standards, tangible progress is being achieved in putting in place the critical groundwork and entities like the HKIB are hard at work trying to facilitate regulatory convergence so as to ensure the region’s readiness for global engagement in cell and gene therapy,” insists Chan.
