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UNCLAS SECTION 01 OF 04 GUANGZHOU 016392 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB, R, EAP/CM, EAP/PD, DRL 
STATE PASS USTR - STRATFORD, CELICO 
USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: ETRD EINV CH
SUBJECT:  Shenzhen High-Tech Company SiBiono on the Cutting 
Edge of Gene Therapy Treatment 
 
(U) THIS DOCUMENT IS SENSITIVE BUT UNCLASSIFIED.  PLEASE 
PROTECT ACCORDINGLY.  NOT FOR RELEASE OUTSIDE U.S. 
GOVERNMENT CHANNELS.  NOT FOR INTERNET PUBLICATION. 
 
¶1. (SBU) SUMMARY:  High-tech company SiBiono has received 
significant government support in its cutting-edge efforts 
to introduce new gene therapy medicines to treat serious 
diseases.  The company's key product, the State Food and 
Drug Administration of China (SFDA)-approved anti-cancer 
drug Gendicine, currently has sales totaling roughly USD 
3.75 million, but the company is apparently expecting 
business to grow as it constructs another facility that can 
increase production from 180,000 to 2 million doses a year. 
The drug had promising success rates in testing and in 
initial use and some experts have heralded its arrival, 
while others question if there was enough scientific 
evaluation performed before the drug was approved. 
Nonetheless the company has benefited from being the first 
to win SFDA approval; the company basically "wrote the book" 
on R&D and commercialization of gene therapy products in 
China and it was able to receive two patents covering 
Gendicine.  Recent reports about disgraced chip developer 
Chen Jin reveal the lengths some Chinese will go to be the 
"first" to achieve a breakthrough in China, however, and we 
can speculate that future Chinese innovators like SiBiono 
may receive extra scrutiny as a result.  END SUMMARY. 
 
¶2. (SBU) Econoffs recently visited Shenzhen SiBiono GeneTech 
Co. Ltd. (SiBiono), manufacturer of the world's first gene 
therapy medicine.  Econoffs, who were in Shenzhen with 
Embassy Economic Minister Counselor Robert Luke for other 
appointments, visited SiBiono to learn more about this 
privately-held high-tech company.  The group met with Fu 
Chiu, assistant to the president.  Fu, a polished speaker 
fluent in English, earned a PhD in molecular biology from 
the University of Chicago. 
 
¶3. (SBU) SiBiono, located in Shenzhen's Nanshan High-tech 
Industrial Park, was founded in 1998 by Dr. Peng Zhaohui. 
Peng has a joint PhD from a university in Xian and from 
Japan's Chiba University.  He worked at the medical school 
at the University of California at Los Angeles and at a 
biotech startup in San Diego in the mid-1990s before 
returning to China.  He launched SiBiono in 1998 with USD 
300,000 in seed money from the Shenzhen government.  Since 
then, SiBiono has received USD 5 million from private 
investors and more than USD 6 million in government grants, 
according to Western press reports.  Peng estimated in the 
Chinese press that one-fourth of the investment in his 
company's key drug came from "various government sources, 
including The Ministry of Science and Technology, the 863 
program (a State high-tech fund), and the Shenzhen municipal 
government." 
 
¶4. (SBU) SiBiono aims to become "the leading gene therapy 
pharmaceutical company in the world" and is committed to 
developing gene therapy products, according to company 
literature.  SiBiono's major accomplishment to date is its 
gene therapy medicine "Recombinant Ad-p53 Anti-cancer 
Injection," also registered as "Gendicine."  (Note:  In 
1999, gene therapy suffered major setbacks in the United 
States following the death of a patient in a clinical trial 
and other adverse results, causing the U.S. FDA to stop a 
number of trials.  This created an opportunity for Chinese 
researchers, who without the same regulatory rules were able 
to take ideas that originated in the United States but 
stagnated there; Gendicine, for example, is similar to a 
gene therapy treatment that was pioneered by Texas company 
Introgen Therapeutics Inc., but has yet to win FDA approval, 
according to Western press reports.  End Note.) 
 
A Tale of Two Drugs... 
---------------------- 
 
¶5. (SBU) SiBiono currently has two main drugs.  The first is 
its wide spectrum anti-cancer drug "Gendicine" which has 
been approved by the SFDA.  The second drug targets 
cardiovascular disease, but this drug has not yet been 
 
GUANGZHOU 00016392  002 OF 004 
 
 
approved by the SFDA.  Fu estimated that it will take two to 
three more years to get approval for this drug. 
 
...But Really A One Drug Wonder 
------------------------------- 
 
¶6. (SBU) While Fu talked briefly about the cardio vascular 
drug, Gendicine appears to steal the show at SiBiono. 
Gendicine began clinical trials in 1998 and by 2004 had been 
approved by the SFDA, making it the first gene therapy 
product approved for commercialization by a regulatory 
agency.  Gendicine has not yet been approved anywhere 
outside of China, but Fu said the company is working to gain 
approval in Europe and in other Asian countries.  As 
described in a Western press report, Gendicine combines a 
gene named p53, which suppresses tumor formation, with a 
modified common virus.  When the product is injected into a 
tumor, the virus carries the gene into cancer cells. The 
gene then prompts the tumor cells to "commit suicide." 
Gendicine works best on solid cancers (tumors) including 
breast cancer, according to Fu. 
 
¶7. (SBU) Sales of the drug total 30 million RMB 
(approximately USD 3.75 million), and by January 2006, 
Gendicine had been used to treat approximately 3,500 
patients with more than 40 types of cancers, according to 
company literature.  Side affects included fever, chills, 
pain at the injection site, discomfort, fatigue, nausea, and 
diarrhea. 
 
¶8. (SBU) Gendicine is manufactured in SiBiono's Shenzhen 
facility.  It takes approximately two months to make one 
batch of the drug, which equals approximately 8,000 doses. 
Fu said the company currently produces 180,000 doses a year 
in its main Shenzhen facility, but is constructing another 
facility that can produce 2 million doses a year.  Western 
press reports notes that the new facility is valued at USD 
20 million.  A typical treatment for a patient is one dose 
per week for 6-8 weeks, though Fu said in certain extreme 
circumstances several doses per week have been administered. 
 
¶9. (SBU) The drug is normally administered after 
chemotherapy and radiation treatments have already been 
performed.  Indeed, Fu stressed that patients tend to 
respond well to a combination of Gendicine and other more 
traditional treatments.  According to Fu, one dose costs USD 
420, which is not covered by insurance.  While Gendicine 
treatments are available throughout China, it is most 
readily available in Beijing hospitals such as the Tumor 
Hospital and the 301 Military Hospital.  Fu commented that 
convincing doctors to adopt new treatments can be difficult 
because some doctors (and patients) are reluctant to accept 
new therapies.  Fu said that foreigners have come to China 
to have the treatment and that some take the drug home with 
them to continue treatments on their own. 
 
¶10. (SBU) The company reported that the six-year survival 
rate of a group of twelve patients treated for laryngeal 
squamous cell carcinoma at middle or late stages is 91.7%. 
Another clinical trial in which Gendicine was administered 
to patients with head and neck squamous cell carcinoma 
showed that the response rate to Gendicine in combination 
with radiotherapy was 93%; 64% of patients showed complete 
regression and 29% showed partial regression, according to 
company literature.  (Note: Head and neck squamous cell 
carcinoma is the second most common skin cancer after basal 
cell carcinoma, according to Chinese press reports.  End 
note.)  Professor Zhang Shanwen of Beijing Cancer Hospital, 
the chair of Gendicine's phase II clinical trial, told the 
Chinese press that in combination with chemo- and 
radiotherapy, Gendicine improved treatment efficacy more 
than three-fold. 
 
Is Only Chinese Approval Good Enough? 
------------------------------------- 
 
¶11. (SBU) Some scientists have asserted that a looser 
regulatory environment in China led to the SFDA's approval 
 
GUANGZHOU 00016392  003 OF 004 
 
 
of Gendicine.  A scientist at the China branch of a foreign 
drug company said in a 2005 Chinese press report that the 
fact that China is the only country to have approved 
commercialized gene therapies makes one question whether 
China has done enough scientific evaluation.  Peng refuted 
the allegation in the article saying that the SFDA approval 
for Gendicine is a result of a carefully designed product, 
the clinical trial plan, the availability of huge patient 
resources, and the low costs of doing clinical trials in 
China.  According to Chinese press reports, the average cost 
incurred per patient during clinical trials in the U.S. is 
about USD 50,000, while Gendicine's trials cost only a 
fraction of that.  The CEO of a state-backed biotech company 
in Beijing that is developing gene therapy told a U.S. 
business magazine that he fears that if Gendicine turns out 
to be ineffective, people will lose faith in all gene 
therapy. 
 
Beating The Competition Has Its Rewards 
---------------------------------------- 
 
¶12. (SBU) Fu estimated that there are approximately ten 
other Chinese companies working on similar drugs.  The 
director of the Gene Therapy Center at Beijing Haidian 
Hospital estimated in a Western press report that two dozen 
Chinese companies are developing gene-therapy drugs.  The 
SFDA has approved three other gene therapy drugs, but 
SiBiono's was the first to get approval. 
 
¶13. (SBU) One benefit SiBiono had in being the first company 
to receive approval is that, according to company 
literature, SiBiono was the main contributor in drafting the 
"Guidance for Human Gene Therapy Research and Its Products" 
which was officially issued by the SFDA in March 2003.  The 
guidance provides national guidelines for R&D and 
commercialization of gene therapy products in China.  Fu 
noted that the guidelines were basically written by SiBiono 
because by being the first company to win approval, his 
company showed they had the most knowledge of the process. 
 
Staff and Training 
------------------ 
 
¶14. (SBU) SiBiono has a staff of roughly 70 people. 
According to Fu, one-third of the company's employees are 
medical doctors or have PhD's.  Ten percent have work and/or 
study experience abroad, according to company literature. 
Fu said most of the company's researchers trained at either 
the Number One or the Number Four military medical 
universities.  He said the company does not have a hard time 
retaining MD's or PhD's, but that skilled workers are hard 
to retain.  As a result, the company is currently 
considering various "perks" to retain workers. 
 
IPR Concerns?  Not Really 
------------------------- 
 
¶15. (SBU) According to company literature, SiBiono has 
applied for six patents, two of which have been issued and 
cover Gendicine and its production methods.  SiBiono has 
trademarked Gendicine and SiBiono worldwide in both Chinese 
and English.  When asked if SiBiono was concerned about 
applying for a patent -- which requires a company to 
publicize the procedure -- Fu said the company was not 
overly concerned because SiBiono holds the core technology 
which is "not easy to discover."  (Note:  A U.S. business 
magazine published a story in March 2006 in which it 
reported that the CEO and president of U.S. company Introgen 
said that he believes that his company's patents cover 
Gendicine -- a view that owner Peng disputed in the story. 
End Note.)  Fu elaborated that the company tries to use the 
legal protection provided by the patent to protect the drug. 
On a somewhat related note, Fu mentioned that there is a 
high-priced black market for the drug on the internet.  He 
speculated that these drugs may be coming from hospitals 
because so far the drugs they have discovered on the illicit 
market have been real. 
 
 
GUANGZHOU 00016392  004 OF 004 
 
 
Comment: China's Race to the Technology Finish Line 
--------------------------------------------- ------ 
 
¶16. (SBU) While Econoffs have no reason (nor the scientific 
background) to question the efficacy of Gendicine nor the 
process by which it was approved, recent events in other 
scientific fields in China reveal the dark side of Chinese 
innovation.  The recent case of disgraced chip developer 
Chen Jin illustrates the lengths some Chinese scholars will 
go to to be the "first" to achieve a breakthrough in China, 
even if it involves cutting corners or outright deception. 
(Note: Chen became a national hero in 2003 when he said he 
had created one of China's first digital signal processing 
computer chips; Chen was disgraced, however, when it was 
recently revealed that he had faked his research and simply 
stolen his chip designs from a U.S. company.  End Note.)  We 
can only imagine the pressure that "returnees" such as Chen 
and Peng must certainly face to quickly make major 
contributions to the motherland, and the government's desire 
to quickly publicize these accomplishments.  It would not 
surprise us if after the Chen case all future Chinese 
breakthroughs are given an extra dose of scrutiny and if 
SiBiono's next round of innovations take a bit longer to be 
approved, which might not necessarily be a bad thing. 
 
DONG