November 4, 2002
Volume 80, Number 44
CENEAR 80 44 p. 23
ISSN 0009-2347


PROFILE

DOING BUSINESS FOR SCIENCE'S SAKE
The Shenzhen Research Institute in China supports academic research in Hong Kong

8044covmat

OPEN FOR BUSINESS Chan (right) and Ye in front of a kiloscale reactor, an expensive piece of equipment that is usually not part of a research lab. The instrument is essential to produce commercial quantities of research compounds for customers. PHOTO BY JEAN-FRANÇOIS TREMBLAY


Running a business seems to come naturally to natives of Hong Kong. To finance his ambition to conduct world-class chiral chemistry research, Albert S. C. Chan has set up, on behalf of Hong Kong Polytechnic University, a lab that can be used for commercial as well as academic purposes. The lab is located in Shenzhen, a Chinese Special Economic Zone adjacent to Hong Kong and a mere two-hour drive from Chan's Kowloon office.

"No drug development laboratory in Hong Kong is as complete and well-equipped as this one," he said while proudly guiding a tour of the new lab. Chan, one of only 12 Hong Kong members of the Chinese Academy of Sciences, heads the department of applied biology and chemical technology at Polytechnic University. The Shenzhen Research Institute, as the lab is known, was inaugurated in April at an event attended by the mayor of Shenzhen as well as Nobel Prize winners Ryoji Noyori (from Japan) and K. Barry Sharpless (from the U.S.).

A graduate of universities in Japan and the U.S., the cosmopolitan and multilingual Chan perceived that Shenzhen, a new and relatively affluent city not known for academic excellence, was the ideal location for his project. Space can be bought more cheaply in Shenzhen than in Hong Kong. And the talent pool is better: It is far easier to bring Chinese scientists and students into Shenzhen than into Hong Kong.

On Chan's advice, Polytechnic bought an entire 22,000-sq-ft floor in a commercial building in Shenzhen's High Tech Industry Park. Chan and his colleagues then turned the space into a first-class research facility.

It was not that expensive. For instance, he purchased Chinese-made equipment whenever possible. "In terms of appearance, it doesn't look as good as a U.S.-made one," Chan says of the lab, "but it is eight times cheaper." All the key instruments, especially those used in chirality research, are imported. The initial investment was about $5 million.

CHAN LAUNCHED several legal entities, two of them for-profit, to share use of the facilities. He is most fond of the Open Laboratory of Chirotechnology, which he wants to turn into a world-class center of academic excellence. "That is the one that I really wanted," he says. But one must pay the bills, and that is what the Institute of Materia Medica and the Institute of Modern Chinese Medicine (IMCM) are there for.

Tao Ye, an enthusiastic Anhui province native, is the associate director of Materia Medica. He says that the company's customers are pharmaceutical makers in China and abroad. Materia Medica provides chiral compounds--building blocks used in combinatorial chemistry or key intermediates--to foreign companies involved in drug discovery. Within China, Materia Medica helps Chinese producers of pharmaceutical ingredients improve their production processes or develop new ones.

Now a resident of Hong Kong, Ye lived in the U.K. from 1989 to 1998. He obtained a Ph.D. in chemistry from Queen's University of Belfast in 1993 and has a background in total synthesis. A budding entrepreneur who attended several international trade shows over the past year, Ye claims interest in Materia Medica is encouraging.

By employing Chinese scientists, the Shenzhen venture can conduct low-cost research. This is not exploitation, the principals insist. "We pay people very well by Chinese standards, but it's still very low compared to the United States," Ye says. At the same time, Materia Medica applies standards of confidentiality consistent with those in Western countries, he says.

An emerging commercial entity, Materia Medica now employs only 10 people, but it is hiring throughout China. The Shenzhen Research Institute's contacts with Chinese academics are helpful in locating promising candidates, Ye notes. When it is fully staffed, the Shenzhen facilities will be able to support the research activities, both commercial and academic, of about 80 people--about 50 staff and 30 students.

Another of Chan's commercial arms at the Shenzhen lab is IMCM, which develops, on a contract basis, commercial products based on traditional Chinese medicine. IMCM conducts pharmacology and toxicology studies and runs an animal lab where tests are performed on mice and rabbits.

Should his Shenzhen project succeed, Chan says he will not benefit financially. His purpose in setting up the commercial entities was to finance academic activity. He says he cannot depend on government funding because public priorities can change suddenly. With the Hong Kong economy in precarious shape, he fears that the government will cut research funding to make up for declining tax revenues.

But Chan is moving cautiously. He says he doesn't want to spend money that is not yet in the bank. For the time being, only 15 students are based in Shenzhen. He will recruit more as revenues from the commercial enterprises grow.

And this won't take very long, Chan believes. The Shenzhen institute is conveniently located next to Hong Kong, performs research at attractive prices, and is managed by reputable scientists. It's a winning combination.



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