Profile: Opening the gateway to China

Peter Abrahamson doesn’t mind admitting that his company is targeting the newly rich.

The Shanghai-based CEO of listed WA product marketer Helicon, Abrahamson has on-the-ground knowledge of the growing might of China’s middle classes, who have money to spend and are demanding the best.

That includes the best in healthcare in a country with no national health scheme but a hospital infrastructure that is booming.

“A tertiary hospital like the Royal North Shore or the Royal Prince Alfred (in Sydney) might have 200 beds,” Abrahamson says.

“The bigger hospitals in China, the class three hospitals, might have 1200 beds. They are state of the art, brand new, very well resourced, have paperless systems and they treat hundreds and hundreds of patients a day.”

The concept of medical insurance is starting to appear in China, Abrahamson says, but most currently pay out of their own pocket. And they are demanding the best.

“They can afford it and they want the best. The doctors give them a choice: you can have this or that and this is how much it costs. All of the multinationals are there charging Western prices and going very well.”

Helicon is not about to compete with the multinationals, who all have their own manufacturing facilities and sales staff on the ground, or with the enormous generic medicines market.

“If you think of the number of Chinese people who are taking antibiotics or analgesics every day, it’s massive,” he says. “But they work on extremely fine margins and there is no way that a foreign company like ours could even think of competing in that area.”

What Helicon is doing instead is identifying niche areas of need, and finding a registered product to fill it. In what the company calls special situation opportunities, Helicon is looking at areas like intensive care, emergency medicine, oncology and cosmetic surgery and finding gaps that a Western product can fill.

In July, Helicon had its first licensed product approved for sale in China, the skin regeneration kit ReCell, developed by Professor Fiona Wood and Avita Medical (formerly known as Clinical Cell Culture).

Helicon doesn’t make any products itself and calls itself a speciality pharmaceutical marketing company.

It has licensed four products so far: ReCell; a collagen-based implantable sponge impregnated with the antibiotic gentamicin called Collatamp G, licensed from UK-US pharma EUSA Pharma; Volplex, a succinylated gelatin-based blood plasma substitute from Maelor of the UK; and a wound dressing with a potent bacteriostatic agent for surgical site infections from MedWrap.

“We are in the ICU area and are actively looking for more products there; surgical infections are a huge market in China in particular; and then the cosmetic surgery area,” Abrahamson says. “So we have a strategy there for surgeons. We are also actively seeking products in the oncology area – drugs and diagnostics.”

Collatamp has recently been licensed and Helicon is preparing a product dossier for submission to China’s State Food and Drug Administration (SFDA). This is a long and detailed process and is expected to last 18 months.

To assist in the complex process of gaining regulatory approval, Helicon has appointed a regulatory partner called ChinaGate, which works with the likes of Bayer, 3M and Organon.

---PB--- Registration and the SFDA

Helicon was founded in 2003 by Dr Saliba Sassine, also founder of Biotech International, now known as Brisbane’s Agenix, and WA biotech Phylogica.

“He set the company up after a visit to China, where he was blown away by the extraordinary growth that was happening there,” Abrahamson says. “He saw the opportunity and he decided to develop a model where he could bring in Western-registered and proven medical products to the China market.”

Abrahamson himself has been in pharmaceuticals for most of his career, most recently as managing director of Allegan in Australia and as regional vice president, based in Hong Kong.

A non-executive director of the company is another well-known figure in the Australian pharma and healthcare sector, Dr Arthur Emmett, chair of the Asthma Cooperative Research Centre and former chair of Metabolic.

The company has also recently appointed its first China-based employee, Dr Chen Qi, a medical doctor and surgeon who has headed up sales and marketing teams for Roche and Lilly.

“He brings very valuable experience in how you do business in China, from product knowledge – he’s a very valuable addition,” Abrahamson says. “We have also appointed a business development manager in Switzerland and her role is to identify these small to medium-sized companies, and there are lots of those in Europe and in the US, and here.”

At this stage of the company’s development – it listed on the ASX last September – Helicon is focusing on registered products that are proven in the market somewhere.

In time, however, it will probably begin to look for products earlier in the development phase, as these can prove interesting and sometimes even cheaper.

“The way the model works is that someone else takes the R&D risk, we own the license for China and we use third parties that are specialists in the area to do the registration,” he says.

That registration is a difficult area. China’s SFDA has had a major shake-up in recent years and drug approvals have slowed for the time being. “The SFDA is now part of the Ministry of Health,” he says.

“(Registration) used to be a fairly grey process where certain envelopes used to change hands, and then in 2004 the government really started to focus, in the healthcare area, on corruption. Now they have brought in a new system which is very similar to the US FDA in terms of registration and the sort of data you need.

“You need to prove bioequivalence, you need to prove quality and so on. So it is all a lot more black and white than it used to be, which is great, but it has slowed down the system considerably.

“But I’d prefer to be working on a level playing field, and wait, and then once you have approval you know that it’s done properly.”