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Pharmaceuticals

As China and Canada feud, vaccine maker gains favor of both

CanSino will supply COVID-19 vaccine to Chinese military while running Canadian trials

CanSino Biologics claims to be the first to publish peer-reviewed data from a clinical trial of a COVID-19 vaccine.    © Reuters

DALIAN, China -- Racing to develop a vaccine for the novel coronavirus, Chinese biotechnology company CanSino Biologics has pulled off the feat of establishing warm ties with both China and Canada at a time of fraught relations between the two countries.

CanSino grabbed headlines in May when it said its vaccine generated neutralizing antibodies in first-phase trials -- claiming to be the first to publish peer-reviewed data from a clinical trial of a COVID-19 vaccine. Then the Tianjin-based company announced in late June that it had received the green light to supply the Chinese military. The Central Military Commission, which gave the go-ahead, apparently liked the vaccine enough even while it was still in development.

CanSino co-founder and Deputy General Manager Qiu Dongxu told a forum in Suzhou this month that third-phase trials will begin soon, Reuters reported. The tests will be advanced with the National Research Council of Canada as the biotech company and the federal organization eye the North American country's large pool of positive cases.

The tie-up comes at a sensitive time. Beijing indicted two Canadians on espionage charges in June, apparently in retaliation for the 2018 arrest of Huawei Technologies Chief Financial Officer Meng Wanzhou in Canada on suspicion of financial fraud.

How did CanSino, with its strong ties to the Chinese government and military, manage to forge a partnership with Canada? Through its executives' overseas connections.

Co-founder and Chairman Yu Xuefeng, who holds a Ph.D. from top Canadian institution McGill University, spent years at French drug company Sanofi and climbed the corporate ladder there to become a senior executive at the vaccine development division in Canada.

Yu saw firsthand on a visit to China how its biomedical industry lagged that in Western countries and saw the growth potential. CanSino was founded in 2009.

A technician works at a manufacturing facility of Chinese vaccine maker CanSino Biologics in Tianjin,China.   © Reuters

The company has at least five senior executives who returned to China after building careers overseas, including one who served as senior vice president at U.K.-based AstraZeneca. These foreign-trained scientists raised China's lackluster pharmaceutical industry to a new level.

CanSino has also won over the Chinese military's research arm. In 2017, the two partners became the first in China to bring an Ebola virus vaccine to the market after jointly developing it. They are working together again on the coronavirus vaccine, leveraging the military's vast study data on viruses and infectious disease prevention as well as its deep pockets.

Just over a year after going public on Hong Kong's stock exchange in March 2019, CanSino is ready to raise more capital. It filed a prospectus this May to list on Shanghai's Science and Technology Innovation Board, or STAR market, to procure 1 billion yuan ($143 million) for capital spending. Production facilities now under construction in Tianjin are set to churn out 100 million to 200 million doses a year by early 2021. These vaccines will be first supplied to China as well as Canada, where it is conducting trials, the company said.

Confirming efficacy is one challenge. The Ebola vaccine remains the only product CanSino has ever commercialized -- and it is supplied for the Chinese government's reserve rather than as an everyday item.

CanSino has bled red ink for years, posting a roughly 156 million yuan net loss and no revenue for 2019. Even with Beijing's support, the company's future might hinge on its coronavirus vaccine.

Twenty-three vaccines are in human clinical trials around the world, with Chinese involvement in nine, according to the World Health Organization. Early accumulation of data apparently helped speed development efforts backed by Beijing.

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