The first 2010 meeting of U.S.-China Business Connections (UCBC) held in January at the Metropolitan Community and Technical College in Minneapolis, Minn. was attended by a capacity group that filled the packed meeting room. 
 
Addressing the group was Dr. Hui Hu, whose impressive background makes him imminently qualified to discuss investing in U.S. and Chinese medical startups.  Hui grew up in China where he attended Beijing University, received his PhD in Physics from the University of Utah in 1989, was professionally trained in the United States, developed products at GE Medical, had numerous publications and has launched and sold startups in the United States and China.
 
At the beginning of his presentation Hui stated that it is important for entrepreneurs and investors to set the right expectations whether operating in the United States or China.  The primary goal is to be able to commercialize innovations and not to become a giant.  It takes a lot of luck to succeed and the success rate is very low.  The rate of success increases substantially when a new venture is complementary to or can partner with a much larger, established firm but such arrangements are difficult to set up. 
 
As Hui continued with his presentation he stated that innovation can take several forms and identified them as market pull (unmet need) vs. innovation push (solution searching for problem), noting that the market pull is preferred everywhere.  There are also differences in an existing/replacement market vs. a new market.  Innovations that replace solutions in an existing market have less market risk, thus are generally preferred. However, experienced investors/innovators also realize that a new market represents high risk but also provide high rewards when successful.  Another distinction to keep in mind is in whether you are operating in a developed region like the United States or a developing region like China since the United States is more performance/feature-driven while China is more cost-conscious.
 

Hui then provided detailed examples of innovation commercialization in developed vs. developing regions with companies with which he has been personally involved.  He noted that innovations tend to be accepted/commercialized in developed regions first and then in developing regions later.  Some innovations are less likely to be accepted in developed regions due to timing/need mismatch and may have better chances in developing regions.  He noted that some innovations out of favor in the United States may have chances to succeed in developing regions since the market there is still open for new comers.  This is especially possible if the established competition here has not been established and the markets/distribution are segmented there where the patent base is larger and the growth rate is high.  Hui went on to state that the unmet need may be quite different in developing regions which favor innovations that substantially reduce cost and certain diseases are more prevalent there which may be effected by local environment and government policies.
 
Continuing with this presentation, Hui noted that some innovations deserve parallel commercialization with a short delay between developed and developing regions which he illustrated with several business models.  This approach allows for entering the market of a developing region faster since clinical trials there may run faster as the patient population is larger and such trials may run faster than the FDA process in the United States.
 
According to Hui, about 40 percent of trial funding from the pharmaceutical industry has moved to Asia with a commitment to success in developing regions. Hui is the Founder and CEO of a Seattle based company called VPDiagnostics, which provides precision risk profiling for atherosclerosis management and stroke prevention.  While the company is conducting a NIH-funded multi-centers clinical trial to be submitted for FDA approval for the U.S. market, it plans a similar trial for China market right now. 

In the final part of his presentation, Hui discussed how improving Translational Research in developing regions.  One of Hui’s involvements is a U.S. non-profit organization called GlobalMD, which brings together FDA and SFDA (the Chinese counterpart of FDA) as well as medical Key Opinion Leaders in United States and China.  For example, it organizes an unprecedented summit of Sino-American Symposium on Clinical and Translational Research this summer in Beijing, which will include prominent leaders from the National Institutes of Health, the Chinese Academy of Medical Sciences, and approximately 600 clinicians and researchers at over 300 hospitals.  The education and communication events like this will bridge the sophistication gap in translational medicine between developed and developing regions.
 
Concluding the presentation was a question and answer session.
 
February UCBC Meeting
 
The topic of the UCBC monthly breakfast meeting will be Chinese Financial Industry Partnerships to be presented by Pieter Tsiknas with Merrill Lynch.
 
UCBC meetings are held at Minneapolis Community & Technical College, 1501 Hennepin Avenue, Wheelock Whitney Hall, Room L3000 (3rd Floor), Minneapolis, MN 55403. 
 
The fee is US$25 per person.  UCBC members and college students are free.  To register, e-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call Jim Smith at 612-865-6543.

For free parking at the MCTC Ramp, please mention your name for the UCBC meeting to the parking staff. The MCTC parking ramp is located at 1420 Hennepin Avenue (north side of Hennepin Ave). Additional information on parking: http://www.minneapolis.edu/parking.cfm