Science in the Triangle

Executives of a Chinese biotech company flanked former Gov. Jim Hunt at the Hamner Institutes for Health Sciences Wednesday, when Hamner executives and Gov. Beverly Perdue announced a deal with the largest medical research park in China.

Newsummit Biopharma will set up shop at the Hamner in Research Triangle Park as part of the deal. The Shanghai-based contract research and manufacturing company could prove instrumental in funneling Chinese investment to North Carolina - just as Hunt’s more than two dozen trips to Japan helped bring operations of about 160 Japanese companies to the state by the time he finished his fourth term as governor in 2000.

The $5 billion in investments from about 100 Chinese companies that Ren Jun, founder and chief executive of Newsummit, projected for the next two years might be wishful thinking. But Perdue expressed high expectations for the partnership between the Hamner and China Medical City, a research park the Jiangsu provincial government is building about three hours north of Shanghai.

“Strong relationships between China and North Carolina are key to the economic prowess of North Carolina,” Perdue said. The deal between the Hamner and China Medical City, she added, is the linchpin in how North Carolina can get more competitive in biotech, an industry that is one of the state’s top economic development priorities.

The emphasis on collaboration with countries that are popping up on the state’s radar screen is a sign of a global economy.

Fifty years after the establishment of RTP, one of North Carolina’s economic engines, biotech and pharmaceutical companies are increasingly moving jobs from the U.S. to countries with lower labor costs, such as China and India. Also known as R&D offshoring, the business pactice finds fertile ground overseas. Chinese government, for example, is investing billions of dollars in establishing research parks like China Medical City to attract offshored R&D jobs, said Rick Williams, the Hamner’s chief business officer.

China Medical City provides U.S. biotech and pharmaceutical companies access to the Chinese market, Williams said. But only the quality standards, expertise and credibility of, say an RTP, will allow China Medical City to become a global competitor that can market products anywhere in the world, including in the U.S., he added

That’s where Newsummit comes in.

Founded about nine years ago, Newsummit provides contract drug research and manufacturing services. But the company also has an investment arm, which buys the rights to develop drugs discovered by biotech companies or scientists at Chinese universities. After testing and finetuning the medicines Newsummit usually sells them to large drugmakers, which may bring the finished product to market.

At the Hamner, Newsummit plans to test licensed Chinese or U.S. medicines in animals. Part of the company’s new U.S. headquarters in RTP will be a $5 million bioprocessing and experimental animal facility. Ren Jun expected to start operations here with 10 employees.

He said he is negotiating with Quintiles Transnational in Durham, the world’s largest contract drug researcher, to farm out clinical testing.

New technologies would then be incubated in China - Newsummit is one of China Medical City’s premier partners - and finally marketed internationally, Ren said.

With a partnership that opens channels to Jiangsu, one of China’s richest provinces, North Carolina economic developers may have a chance to attract further investments, from China’s central government or Chinese companies interested in establishing U.S. beachheads.

Hunt, who said he visited Newsummit’s Shanghai headquarters two years ago and has his photo hanging in the company’s lobby, considered the partnership so promising, he issued a challenge to the Perdue administration and Keith Crisco, North Carolina’s new commerce secretary, at the end of Wednesday’s press conference at the Hamner.

By 2035, North Carolina should have 300 Chinese companies, Hunt said.