Joseph Wong


On his book Betting on Biotech: Innovation and the Limits of Asia’s Developmental State

Cover Interview of March 07, 2012

A close-up

Chapter 5 opens with an anecdote, a true story.

A few years back I was giving a talk in Taiwan about the state of the biotech sector there. The government had just invested public money in a promising biotech start-up. Tens of millions of dollars were allocated to this one firm. It was promising because the firm had acquired a drug candidate from a major US biotech company. There was a still long way to go until a drug could make it to market, but investors hoped that the newly formed Taiwanese firm could take the candidate through clinical trials. The deal had generated quite a bit of buzz. Then someone in the audience asked me about the number of jobs that would be created with this new firm. As a start-up venture, I guessed that maybe 15 employment opportunities might emerge. The audience member then asked how I could possibly justify, never mind laud, a $20 million bet on a single drug compound made with public money when its positive impact on Taiwan’s economy was likely to be so minimal. I had no convincing answer. I was looking at the trees; he at the forest.

I still do not have a convincing answer to that question. That exchange, however, captures the myriad challenges of growing a biotech sector, and of first order technology innovation more generally. And it echoes the concerns people everywhere are expressing at this moment in time.

My close-up story of Asia is in fact much more global in scope.  Biotechnology innovation—and massive investments in innovation generally—is a long-term uncertain bet. We know this to be certain. It is an expensive endeavour. Few, if any, countries can claim a successful biotech industry to date. Venture capitalists are still unsure of how to evaluate prospects. Regulatory regimes remain underdeveloped and varied.

As such, it is not clear to the general public how billions of public dollars spent on basic science research—in the US, the NIH and NSF fund upwards of $30 billion per year on life sciences R&D—are generating any public goods of importance such as economic growth, job creation or even better health.

The sense of throwing good money after bad is severely deepened when one considers the current economic funk much of the advanced industrial world is in. People understandably want to know when we can expect returns on such lavish and conspicuous public and private investments. Those living under conditions of poverty seek an explanation of why billions are spent on drugs that, for instance, may (or may not) extend one’s life six weeks in late stage cancer—while tens of millions of poor people continue to die from illnesses we know how to cure but are unwilling to invest in.

That we do not have an answer affirms, on the one hand, biotech’s inherent uncertainties and the high-risk / high-reward tension in the business of biotech innovation, and highlights, on the other, just how unsatisfying this must appear to most.