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Making a stand for the real meaning of `biotech'

Monday, Oct 22, 2001, Page 18

The director of U-Vision Biotech Inc, Eric Tzeng, right, looks on while his company's research and development director, Chiu Sung-kay makes a point during an interview with the Taipei Times. PHOTO: CHIANG YING-YING, TAIPEI TIMES

Taipei Times: Could you give our readers an idea of what your company is about and some of its products?

Eric Tzeng: Let's try to keep this short. This company is basically a "drug discovery company." We are focusing on some herbal medicines, which some people call traditional Chinese medicine. But, the discovery of new drugs takes a lot of time, so [in the mean time] we plan to develop some tools [to bring in revenue for the company].

These tools are highly refined screening tools. Very accurate, very sensitive -- what we call microfabricated devices -- including some so-called bio-chips, DNA micro arrays, things like that help shorten the period of drug development. So, basically the company is focusing on this part. We are focusing on three areas: breast cancer, diabetes and wound-healing.

Chiu Sung-kay: Our emphasis is on discovering new ingredients from Chinese medicine. You know, people have years of experience using these medicines and they have learned how these medicines cure certain diseases. There is actually a big database there. So we just get the information from there and purify the useful components into a drug form.

TT: How did your company develop new products so fast? You only started a few years ago?

Tzeng: We had to develop some lethal weapons, some screening tools first. So we launched a few products. A DNA micro array -- that's a gene chip or bio-chip -- and we're also developing the EZ Spot, a universal chip. In the US last year they consumed 100 million of these.

[Unlike a computer chip, a bio-chip typically is used to detect diseases or for inspecting genetic or chemical make-up. Some are glass slides specially coated with a chemical to help detect certain bio-agents. Others are square plastic slabs the size of a business card on which a drop of blood or other chemical is placed for analysis. Then, a change in colors on the "chip" tells lab technicians what they want to know]

TT: What is the "lethal weapon" -- or your special product?

Chiu: It is a glass slide and we put a very special chemical on it. It's our own chemical, we developed it ourselves, and it is very sticky.

So, when you put on some DNA, it will appear as a very tiny spot and when it is magnified we will see many genes. Each patient that has a problem, we get their genes and see how their gene activity differs from normal [when they are not sick]. When you put [the genes] on our slide, you can see the difference. This change in color will tell us what is wrong with the patient.

That's very important. The old concept was that there is one gene for each disease, but we have found that there are multiple genes that control each disease.

The company is also able to take information gathered from patients and the results of the EZ spot tests and form it into a database for use by researchers.

TT: Is this much less expensive or faster than the old way of testing?

Tzeng: Definitely, much faster. We used to use a test tube to do one spot at a time, the new technique cuts down on time and money.

TT: A lot of companies in Taiwan are focusing on Chinese herbal medicine, just like you. What sets you apart?

Tzeng: Actually, there are many problems to work on. So far in Taiwan, companies are only interested in turning the herbal medicine into a powder to put into a capsule or into a nutrient drink or herbal tea, something like that. But that can only be defined as food. It cannot be validated by the FDA [US Food and Drug Administration] and you cannot make a lot of profit. If you can turn the herbal medicine into a drug, then you can make a huge profit, but if you just define the medicine as a food, you cannot make big money.

We need to use Western methods to prove that Eastern medicine is good and can be qualified by the USFDA. That's our dream.

TT: Why haven't companies looked into Chinese herbal medicine until now? Or have they?

Tzeng: Actually, in 1972, the NIH [National Institute of Health in the US, which also headed the Human Genome Project] had a division called "Alternative Medicine" and they spent a lot of time screening -- probably more than 50,000 herbs from different countries. But they found out they made a lot of mistakes. They emphasized single compounds, so they just tried to extract a single compound, but herbal medicine is usually a combination [of compounds].

The second mistake they made was not getting enough information. For example, Chinese herbal medicine has 3,000 years of history and collected information, and they did not gather enough information from the past. They also didn't translate [some of the medicines and cures' recipes] accurately. So, they didn't find any good matches from herbal medicines.

But now they are moving away from emphasizing only one single compound and allowing you to include a mixture. They want you to identify the structure and the properties of individual natural compounds -- they have changed the FDA guidelines for botanical drug products. So now everybody has the potential to find good [drugs] from herbal medicine. Many people believe herbal medicines have less side effects. Also, there are some diseases that conventional medicine does not cure, like AIDS.

TT: The expectations for biotechnology to become a major industry in Taiwan are very high. Can Taiwan live up to these expectations and why?

Tzeng: What is the next trend for biotech in Taiwan? We are very interested in drug discovery, but some companies in Taiwan are only interested in manufacturing. So, I don't think more than a few major biotech companies will survive in Taiwan.

The second question is: what kind of company can last? I think if the company has good basic research and all their research is market oriented, then I think they will be successful. But in Taiwan we have some very stubborn, very stupid companies that are just trying to copy the IT business [model] and make it into a biotech business.

When I first visited venture capitalists looking for investment, I found they liked to ask, "So for the coming six months what is your revenue? Can you break even within a year or within six months?" But the history of biotech in the US shows it is impossible to break even within three to five years, at least. You spend a lot of time and a lot of brain power researching a specific disease. So people invest in its potential and then harvest the profits long after that.

In Taiwan, they just want to know when harvest time is. They ask, "Where is your product, how will you earn money?" U-Vision already has a product, [the development process was fast] by US standards, but still does not fit in in Taiwan [as it is not yet a profitable company].

Also, now a lot of food companies and a lot of traders claim their companies are biotech companies. They purchase some hardware or some products to sell in Taiwan and call themselves a biotech company. They do manufacturing and purchase the materials in the US and package it in Taiwan and call this a biotech company, or make milk and call it a biotech product -- or even soy sauce!

TT: Are companies like that getting government money?

Tzeng: Yes. Actually, I'm a reviewer for research grants and the government will say, "Look that company is a big company so if we invest in them then it's not like throwing money down a black hole."

That's why sometimes I feel very lonely, very powerless, because the real start-up biotech companies need money, they need help from the government.

I remem0ber in 1997 when Chiu and I were at Stanford University. I saw the signs that said the Taiwan government was planning to invest US$5.9 billion to jump-start Taiwan's biotech industry. Up to now they have only spent about 20 percent of that money, and of this 20 percent, about 80 percent goes to venture capitalists.

TT: But aren't those venture capital companies supposed to find good biotech start-ups to invest in?

Tzeng: Yes, but they don't have very good project managers or reviewers. A lot of venture capital reviewers know nothing [about biotechnology]. I remember the first venture capitalists I met -- one-and-a-half years back -- and they just asked me about the kind of chip that can be put into a PC. He meant a chip, a silicon chip, he didn't even take the time to review [before the meeting] to understand more about biotechnology.

TT: So do you think most of the government money being made available is not going to biotech companies?

Tzeng: No, it's not really going to biotech companies. Most of the money goes to food companies or it goes to pharmaceutical companies, but they are manufacturing companies -- no research and development. So, sometimes I feel very lonely. But we are very stubborn. We think we can do it with a small amount of money. It is slowing us down, but it won't stop us.
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