TIANJIN, North China — When Ebola ravaged West Africa in 2014, it quickly became clear that a vaccine was urgently needed. As the death toll rose to over 10,000, and Europe and the U.S. began reporting cases, the only hope seemed to be a vaccine based on a four-decade-old Ebola strain, which was still not ready for the market.
Then, out of the blue, little-known Chinese company CanSino Biologics announced that it would be able to mass produce a vaccine based on the 2014 Ebola strain that could save millions of lives. Soon, CanSino — which did not have a single product on the market — was discussing emergency response plans with the four biggest players in the vaccine industry.
The man who made it all possible was Yu Xuefeng, who founded CanSino in 2009 after more than two decades of experience at international biotechnology companies. “When we went to the WHO [World Health Organization] meetings, nobody knew who we were,” Yu, 54, tells Sixth Tone at CanSino’s lab in Tianjin. “I was giving a presentation, and they were very impressed that we made this happen.”
Last year, China became the world’s second-largest pharmaceutical market after the U.S. in terms of spending on medications. Pharmaceutical sales in China are projected to hit $167 billion in 2020, up from $108 billion in 2015.
One of the key drivers of this growth is the development of the domestic biomedical industry, which once produced subpar generic drugs but is now making headlines for its competitive products and attracting enormous investment. This success can largely be attributed to native Chinese who forged careers abroad and have now been lured home to develop the Chinese industry. Yu is a shining example.
Following the success of CanSino’s Ebola vaccine — based on work by a Chinese military research institute — the Tianjin-based company has garnered enormous investment from local equity funds and well-known foreign players, including an investment firm primarily backed by U.S. pharmaceutical giant Eli Lilly.
For Yu, leaving China for a career abroad was an easy decision. A 1988 graduate of the prestigious Nankai University, Yu taught at his alma mater before being accepted to a Ph.D. program at Canada’s McGill University in 1991. But before leaving China, he was required to reimburse the government for his university education — and though his monthly salary of 100 yuan was considered substantial back then, the 10,000-yuan price tag was still out of reach. Yu managed to raise the money with help from his family, but he says the policy only drove him farther away from his home country.
Yu Xuefeng poses for a photo at CanSino’s facilities in Tianjin, April 10, 2017. Denise Hruby/Sixth Tone
Yu received his Ph.D. from McGill, brought his wife to Canada, and started a family there. He quickly climbed the career ladder at vaccine company Sanofi Pasteur, becoming the youngest department director at the time.
Staying in Canada had been a no-brainer; returning to China was a tougher choice. In almost any conversation, no matter the topic, Yu manages to crack jokes. His laugh is contagious, but when he tries to explain why he didn’t visit his home for 10 years, his voice takes on a somber undertone of anger at the country’s policy toward its university-educated elite at the time. “It really upset me,” he says of the fee he was charged when he tried to pursue his studies in Canada.
Ultimately, it was Yu’s sense of duty that led him to return to China permanently and start CanSino in 2009. While investigating opportunities for Sanofi Pasteur in China, he realized that the nation’s vaccine research was solid, but that domestic companies lacked the know-how to effectively commercialize their products. All that was needed, he says, was someone with the right experience to bridge the gap between scientific study and the commercial market. “I felt like it was an obligation,” he says.
If Chinese scientists had faced the stick when they tried to leave in the ’80s and ’90s, they were now being treated to the carrot upon their return. The Chinese government had realized that the domestic pharmaceutical industry needed experts like Yu and embarked on a charm offensive to lure them back home.
Ongoing incentives have included substantial investment in the sector — China’s average annual growth in biomedical research spending is now more than 18 percent, or around $370 billion — as well as the establishment of science parks, prestigious awards, and lucrative recruitment initiatives. Yu was selected for one of the latter, the Thousand Talents Program, which offers generous packages to scientists who move to China.
CanSino’s other co-founders were also native Chinese who had spent almost their entire careers abroad. On a personal level, leaving their families behind to return to China was difficult, they said — but professionally, it was hard to turn down the offer. The pharmaceutical giants they had been working for would have no trouble replacing them with new talents, but in China, they’d be making invaluable contributions.
With almost 20 million newborns in China each year, the market potential was vast. But more importantly, the vaccines were desperately needed to protect people from debilitating diseases. “Vaccines keep people from suffering,” Yu says matter-of-factly. Had there been a viable Ebola vaccine in 2014, it could have saved more than 11,000 people.
Yu and his fellow foreign-trained CanSino co-founders are a major investment draw. “Those talents not only bring technical capabilities that are much needed, but have the ability to bridge China with Western investors — strategic or financial,” Franck Le Deu, senior partner at consulting firm McKinsey & Company’s Greater China Practice, tells Sixth Tone.
But as the market matures, recruiting top talent is becoming increasingly difficult. Although Tianjin’s government has been supportive of CanSino, the company’s location on the outskirts of a city known for heavy air pollution often deters promising graduates.
The Ebola vaccine that put CanSino on the map is now awaiting a final efficacy trial that can’t be conducted until there’s a new outbreak of the disease — which is only a matter of time, experts say. The CanSino vaccine now has several competitors in the market, though the company maintains that its product has the advantage of being based on the most recent virus strain. It can also be safely kept in a commercial fridge, while other vaccines must be stored at -80 degrees Celsius, which could prove a hurdle in developing nations with inadequate infrastructure.
The company has also begun working on vaccines for more common diseases, including tuberculosis and meningitis, with four new vaccines now in the final stages of clinical trials. Soon, Yu and his 160-person staff will be able to produce 100 million vaccine doses annually at their state-of-the-art lab and research facility now under construction.
A researcher smiles behind laboratory equipment at CanSino’s facilities in Tianjin, April 10, 2017. Denise Hruby/Sixth Tone
Among the company’s current projects is a potentially groundbreaking vaccine that would protect against pneumococcal bacteria, which causes life-threatening diseases like meningitis and pneumonia. The most widely used pneumococcal vaccine today, Prevnar 13, made pharmaceutical giant Pfizer more than $6 billion in 2014. However, Prevnar 13 only protects against 13 of the bacteria serotypes — or distinct variations — most common in the West, out of more than 90 known serotypes worldwide. CanSino hopes to develop a vaccine that would work against all serotypes.
Of course, there are plenty of rivals hoping to beat CanSino to the punch. “The risk/reward profile of health care investment remains a high one,” Le Deu says. In 2015, Pfizer, Merck & Co., Sanofi, and GlaxoSmithKline controlled more than 85 percent of the global vaccine market, making it hard for smaller players to compete. “Pipelines have to deliver, the company will have to manage the scaling-up phase in a very competitive environment … and some pure Chinese companies are also going to succeed,” he adds.
But being the underdog doesn’t scare Yu. “If you think of Huawei, nobody knew who they were a few years ago. But now, everybody knows them. The pharmaceutical market is changing more slowly, but it is changing,” he says, passing a local street dog that he had vaccinated to make sure it doesn’t pose a health risk to his employees.
“If you can make one blockbuster product,” says Yu, “you completely change the market.”
Editor: Jessica Levine.
(Header image: CanSino researchers work at the company’s laboratory in Tianjin, April 10, 2017. Denise Hruby/Sixth Tone)