Text/ Finance and Economic Health
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The 57-year-old Kingsley (1548. HK) former chairman Zhang Fangliang was arrested two years ago for "allegedly violating the regulations of Chinese law on import and export."
On May 2, 2022, Jinsrui announced that Nanjing Jinsirui received a notice from the Zhenjiang Municipal People's Procuratorate that the relevant investigation had been reviewed, and the procuratorate decided not to file any lawsuit against any unit or individual.
According to The Opinion of Kingsley China Counsel, the latest decision means that no prosecution proceedings and related reviews have now been concluded and that neither Kingsley nor any of its affiliates, Zhang Fangliang or any employees or former employees will be held criminally liable in connection with the investigation.
Not an isolated case
On 2 May, Kingsley also announced that Zhang Fangliang had been appointed as a non-executive Director of the Company, as well as a member and chairman of the Risk Management Committee and a member and chairman of the Strategy Committee.
China Customs' anti-smuggling department inspected the offices of Kingsley's companies in Nanjing and Zhenjiang, China. The investigation stemmed from "alleged violations of Chinese law on import and export", and on September 18, 2020, Kingsley was suspended for a short time.
During the investigation, Zhang Fangliang, who was also the company's chief executive at the time, was placed under residential surveillance in China, and three employees and one former employee of Kingsley, who had handled the company's import and export activities, were also detained for questioning.
On November 22, 2020, two months after the incident continued to ferment, Jinsrui issued an announcement that founder Zhang Fangliang was arrested on suspicion of smuggling prohibited goods under Chinese law.
Affected by this news, after the opening of the next day, Kingsley's stock plunged in a straight line. As of the close, the company closed at HK$10.74 per share, down 14.76%.
This is a company that is relatively special in the pharmaceutical industry, not only because its business operations cover more than 100 countries around the world, covering more than 5,700 pharmaceutical, biotechnology companies and scientific research institutions around the world, but also because it has a cross-disciplinary multi-business form, which is a platform-based and biotechnology company.
Kingsley's focus is on gene synthesis, biologics, immunotherapy and more. "Nearly 80 percent of Kingsley's business comes from outside Of China, with the most important markets being North America and Europe, and a global sales center in the United States." Liu Zhenyu, then president of Kingsley Life Sciences Business Group, once told the media.
Approval process for human genetic resources
With the Jinsrui incident, the industry also launched a discussion on the topic of "illegal use of human genetic resources".
In China, the collection, preservation, utilization and external provision of materials on human genetic resources (including human genomes and genes) engaged in medical research shall comply with the regulations on the administration of Chinese genetic resources and shall be managed by the Ministry of Science and Technology.
The Biosecurity Law of the People's Republic of China, which came into effect on 15 April 2021, emphasizes that "the collection of important genetic lineages of the mainland, human genetic resources in specific areas, or the collection of human genetic resources of human beings in accordance with the types and quantities prescribed by the competent department of science and technology under the State Council; the preservation of human genetic resources on the mainland; the use of human genetic resources of the mainland to carry out international scientific research cooperation; and the transportation, mailing, and carrying out of the country of materials on human genetic resources from the mainland shall be subject to the approval of the competent department of science and technology under the State Council".
In the "2018 Administrative License for the Collection, Collection, Sale, Export and Export of Human Genetic Resources Approved by the Ministry of Science and Technology" issued by the Ministry of Science and Technology, it was applied for by Ruijin Hospital affiliated to Shanghai Jiao Tong University School of Medicine and completed by Nanjing Legend Biological Company, Janssen R&D Co., Ltd. and Johnson & Johnson China Investment Co., Ltd., a subsidiary of Kingsley. A Phase II Developmental Study Evaluating BCA-Targeted LCAR-838M Chimeric Antigen Receptor T Cell (CAR-T) Therapy for the Treatment of Subjects with Relapsed or Refractory Multiple Myeloma in China was included.
The Office for the Management of Chinese Genetic Resources (hereinafter referred to as the "Genetic Office") established under the Ministry of Science and Technology is the specific examination and approval department. Passing the approval of human genetic resources is a necessary process for almost all innovative pharmaceutical companies to carry out clinical trials.
This approval process, the industry takes an average of three months, the declaration must have clinical approval, ethical approval, need to go through the online filling, online pre-acceptance, pre-conference, expert technical review, the Ministry of Science and Technology approval and other processes.
In accordance with regulations, on the basis of completing the above procedures, only when human genetic resources are transported out of the country can they obtain a certificate of the exit of human genetic resources materials and go through customs formalities.
The founder of a biotechnology company in Beijing once told Caijing Health, "We reported a project, and it took more than 3 months after getting the clinical approval before we got the approval from the Genetic Office." With one more pass, the entire clinical trial slowed down, and each phase of the clinical trial had to be declared. The genetic office is afraid of getting the blood samples and tissues out, and the amount of blood collected and biomarkers in each clinic are different, and they have to be reported every time. ”
The company submits online first, and after about a week or two, it is rejected or enters the reply; if it is rejected, it will not immediately notify the reason for the rejection, and it will take some time to receive the reason for the rejection. "There's not much cost to this approval, it's mostly time." A president of a biotechnology company in Jiangsu Province said.
A number of relevant enterprises believe that there is too little communication between the genetic office and the enterprise, and the staff is not enough, often after the enterprise reports the materials, it is found that the prepared information is not correct.
"I propose to change the current approval system to a filing system." The founder of the above-mentioned Beijing Biological Company suggested that the approval projects are "drawn", such as gene therapy is indeed more sensitive, but research projects such as diabetes, glaucoma, lung cancer, etc., there is no need for genetic approval. Overall, it needs to be more open.