Hong Kong’s biotechnology sector needs a more integrated and harmonised ecosystem to develop into Asia’s largest biotechnology fundraising hub, panellists said on the second day of Hong Kong Biotechnology Organisation’s (HKBIO) BIOHK2022 convention.
“From a regulatory perspective, Hong Kong is not integrated to a great extent with [mainland China], which is a major disadvantage,” Vijay Karwal, chief financial officer at AffaMed Therapeutics, said at the “Capital Market for Healthcare Post Pandemic” round table on Thursday.
Drug developers were seeing a separate environment and “work that you do here [in Hong Kong] doesn’t necessarily give you easy access into the mainland market, which is vastly larger”, Karwal said. There are a large number of governments at the provincial and municipal level that offer attractive incentives for investment in mainland China, which are “really not mirrored here at all”, he added.
“Hong Kong is still quite a way away from becoming a major global hub for biotech research and development,” Karwal said.
The bourse operator added that it would implement more reforms and look for ways to cater to the funding needs of large-scale advanced technology companies that are at an early stage of product commercialisation.
The coronavirus pandemic and economic uncertainties have given investors some “roller-coaster” experiences over the past three years, said Lake Bleu’s Li, and the biotechnology sector had seen some capital outflows. Investors’ risk appetite had also been hit by rising interest rates, but the fundamentals of the industry are very solid, he said. And now, “gradually the risk appetite is coming back”, Li added.
China’s reopening and Beijing’s various stimulus packages, coupled with a slower inflation in the US, suggested that market sentiment would improve next year, he added.