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Chinese Billionaire Backs New U.S.-China Drug Development Company

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Chinese entrepreneur Qi Jinxing spent 19 years building his real estate company in Hangzhou into a billion-dollar enterprise. Now the self-made billionaire is taking another gamble on a risky bet: he’s backing a specialty pharma company that will operate in both the U.S. and China, aiming to draw on experience and drug licensing opportunities in the U.S. and lower cost drug development in China.

“The return on investment may not be as good as real estate but I believe the benefits are beyond financial rewards,” Qi said through a translator by phone from Hangzhou.

The new company, Ascletis, is headed by Jinzi Wu, a Chinese scientist who most recently was head of HIV drug research at GlaxoSmithKline (NYSE: GSK). Wu has also worked as a scientist at Novartis and Aventis (now Sanofi-Aventis) and has a PhD in cancer biology from the University of Arizona. Wu will split his time between Research Triangle Park, N.C. and Hangzhou.

The company plans to license promising drug compounds from U.S. and European companies and develop them for the Chinese market. It will focus on cancer and anti-infective drugs.

Wu stressed that there are still no effective treatments for many cancers, and that infectious diseases like drug-resistant tuberculosis are a serious issue in China. “The TB drugs we are using now were invented in the 1960s and it takes 9 to 12 months to treat a patient,” Wu explained.

As the Chinese middle class grows –it’s now 300 million people -- it is seeking better health care. The market for medicines in China is growing as well.

Qi sees the biotech investment as an opportunity to have a positive impact on the lives of people in China and globally. “I believe the investment in biotech has benefits beyond financial rewards, like reducing suffering in patients.” Qi acknowledges the risks of drug development but said he plans to tap his deep pockets to support the company. So, does he see himself as a sort of Bill Gates, who made his money in Microsoft before turning his attention to philanthropy? “I share the same dreams as Bill Gates, but I am not as rich as him. I want to be the Bill Gates of Hanghzhou’s Jian-Gan district (which has a population of 700,000 people).”

Plenty of foreign pharmaceutical firms operate in China, and there are some home grown Chinese drug developers, including Hutchison MediPharma (see story Ancient Secrets , backed by Hong Kong billionaire Li Ka-shing. But this may be the first Chinese investor-backed drug development company to operate both in the U.S. and China. Wu acknowledges there have been some failed attempts to mix China-based investors with American-trained scientists like himself. But he has known Qi for a long time through his wife’s family and says the two share common values and trust. The hard part will be getting the right drugs into clinical tests and out on the market.