TORONTO, Jan 7 (Reuters) - A more favorable investment environment is the only thing needed to turn China's growing biotechnology industry into a "fire-breathing dragon," experts said in a new study published on Monday.
The study, to be published online by the journal Nature Biotechnology, found that government funding and the return of native scientists trained abroad had created a sector that could benefit the global health industry.
However, difficulties attaining venture capital and getting products onto global markets could curb the sector's growth.
"There's a very well established health biotechnology sector in China," co-author Peter Singer of Toronto's McLaughlin-Rotman Centre for Global Health said in an interview. "Even though it's a young sector, they already have innovative products on the market."
"We liken it to a baby dragon, which is hard to ignore, and, as it grows, becomes increasingly hard to ignore," Singer added.
The study highlighted a unique gene therapy product, developed by Shenzhen SiBiono GeneTech Co, which is used in the treatment of head and neck cancers.
Other products included the only cholera vaccine available in tablet form, and ongoing work on an HIV vaccine.
The study was done through interviews with 22 small- and medium-sized innovative Chinese firms.
The researchers found that while government funding is provided for research, the private funding needed to take a product to the global market was lacking partly due to regulatory barriers, and concerns over quality control and intellectual property rights.
Lead author Sarah Frew, research associate at McLaughlin Rotman, said there was also some risk aversion among investors. "It's a bit of a chicken and an egg situation," said Frew.
"Investors aren't investing necessarily in the Chinese biotech sector because it's still a risky sector and it's still a bit unknown, so they're waiting to see the front-runners, but the front-runners can't globalize their products without further investment."
Despite the challenges, the study sees the Chinese innovative biotech industry, which makes up less than 1 percent of China's biopharmaceutical sector, as one that will move to the world stage within the next five years.
(Reporting by Leah Schnurr; Editing by Bernadette Baum)
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