Internationalisation of Hai Kang Biotech starts from patent licensing
"A patent often brings greater value than one could ever imagine," said Dr Terence L.T. Lau, Chief Operating Officer and General Manager of Hai Kang Life Corporation Limited (HKLife). Soon after the company set up, HKLife launched its first innovative biotechnology product, a H5 Avian Influenza Virus Detection Kit. With collaboration with the world’s top ten French biotechnology companies, HKLife has won international recognition from its success in fields ranging from advanced molecular biological techniques to the testing, certification, and development of medical, food safety, and animal disease diagnostics.
Founded in 1999, Hai Kang Life Corporation Limited was established as a biotechnology company and set out to commercialise research undertaken on the molecular diagnostics of infectious diseases.
Dr. Lau recalls the time when the avian flu first appeared, the company obtained technology licensing and research & development platforms of the top ten French biotech firms in order to diagnose the virus at early stages. Able to accurately detect the virus, the company successfully applied for a technological patent. This has lured a French biotech firm to work with HKLife and developed a complete kit for detecting the non-pathogenic or pathogenic influenza A subtype H5 virus. The technology was first patented in the United States Patent and Trademark Office and subsequently accepted in Europe, Australia, Japan, and Southeast Asia. It was eventually listed as an international standard in 2004.
“The company then applied these diagnostic skills and technology to food testing and veterinary medicine,” said Lau. “This all started with the patent from the French company and it has meant a continual increase in our business,” he added.
Dr. Lau pointed out that technology and intellectual property rights protection are the most important assets of a biotech firm, but ten years ago few companies were willing to expend resources on IP protection.
The company was fortunate enough to receive a HK$100,000 innovation technology grant from the Hong Kong government which was used to acquire the French IP rights and enabled HKLife to develop the H5 avian flu virus diagnostic kit. HKLife then patented its own development, a move that was the first step on the road to success for HKLife.
Beginning in 2000, HKLife started working on projects involving genetically modified organisms (GMO). According to Dr. Lau, there were no GMO testing laboratories in Asia, and so HKLife set up the first laboratory which fully concentrates on molecular testing and R&D, becoming the first laboratory in Asia to receive ISO 9001 and ISO 17025 certification for qualitative and quantitative GMO testing.
“The laboratory used PCR (polymerase chain reaction) and a nucleic acid sequence based amplification (NASBA) technology platform and offered microbiological and chemical testing services which are based on nucleic acid testing,” said Lau, adding “of these, the veterinary applications have been acknowledged and accepted by agriculture, forestry and aquaculture industries in Japan.
A biotechnology company in the course of products development usually involves IP rights trading and technology licensing in order to complete the innovation, Dr. Lau describes. He goes on to describe Hong Kong as an international city with abundance of talent to further its development as an IP rights business centre. For tech companies, large investments and demanding resources have to be put in in the ground of developing IP rights protection and transaction. Dr. Lau is pleased to see that Hong Kong is becoming an IP right business centre which could provide one-stop services. This would encourage more people to involve in R&D in the future. However he admits presently there is a predominance of learning by doing: “Biotechnology is a brand new technology and requires a lot of time to explain the new unique features of the innovation to the patent judge, the buyers and the patent attorneys”.
HKLife currently has a portfolio of more than 70 of its own patents, which includes a patent on the ‘kit for detecting non-pathogenic or pathogenic influenza A subtype H5 virus’; a process for detecting nucleic acid target molecules using an enzyme-linked probe capture assay; and a patent on a novel DNA chips system and its manufacture. “The cost of applying for just one patent is likely to be more than HK$10 million, but the future return on this investment is almost unlimited,” he said.
He describes that patent often brings greater value than one could ever imagine. For example, the Swiss pharmaceuticals giant Roche paid several million US dollars for the use of HKLife’s polymerase chain reaction (PCR) patent, and that technology has helped Roche earn far beyond the cost of the patent rights.
In recent years, HKLife has also developed its own innovation research and development of electric field assisted diagnostic chip (EFADchip®) technology. This application assists in diagnosing over 300 viruses of respiratory and digestive systems, meningitis, cholera and some cancers by extracting a sample of a patient’s blood or nasal mucus or any other body fluid is needed. “We hope that this new EFAD chip patented technology can be developed into a complete diagnostic platform and initiate a complete change in the current clinical and point-of-care diagnostic technology,” said Lau. “The company has been working with Guangdong Provincial Disease Control Center, carrying out clinical research and hoping that by early next year, we could launch our market promotion in mainland market and Hong Kong.”
Regarding how to choose between a firm’s own R&D and IP trading, Dr. Lau says it would depend on the operating principles of the company. He continued, if you choose your own R&D there is higher risk, but higher returns, and vice versa. HKLife is currently focusing on its R&D to provide first-class biotechnology products worldwide.
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