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SARS: Too Soon to Celebrate?

By Bruce Einhorn As fears of the sometimes fatal severe acute respiratory syndrome (SARS) virus subside, Hong Kong is waking from an awful dream. The airport's immigration counter has lines again, as visitors start returning to the city. At the Grand Hyatt Hotel adjacent to the convention center in Wanchai, a buzz is back in the lobby. Around town, most residents walk the sidewalks without their once-constant face masks. It seems people believe SARS is fading into history.

That may be wishful thinking, says Jian Han, a Chinese scientist working in the U.S. Han, born in 1961 in the northeastern province of Liaoning, has a PhD from the University of Alabama in Birmingham, where he's now a professor of pediatrics. Han was in Hong Kong last week on his way back from the World Health Organization's SARS conference in Kuala Lumpur, where optimism about SARS coming under control was tempered by the realization that the battle against the virus has scarcely begun. "Everyone thinks it will be coming back," says Han.

SAMPLE HURDLES. That's one reason Han has been working on developing a new test that can help doctors quickly determine whether an ill patient has SARS. Han is the chief executive officer of Genaco Biomedical Products, a small company with offices in Alabama and the southern Chinese city of Shenzhen.

Working with a joint-venture partner, United Premier Medical Group, Genaco last week unveiled a diagnostic test that, in the company's words, "allows doctors to identify if a patient's acute respiratory infection is caused by the SARS virus or any of nine other common infections." Since it can test for 10 illnesses at once, Genaco's test can save time and money, Han claims.

Developing a SARS test hasn't been easy. Besides the usual problems with the science, researchers have to overcome a special hurdle: the difficulty of getting specimens. To make sure that the tests work, actual samples of the SARS virus are needed -- and they aren't easy to come by, given the dangers of SARS and the small number of cases outside Asia.

SECRET SOURCES. Han says that's what gives his company, with its presence in Shenzhen, an advantage. Most companies "don't have access to a lot of patient samples," Han points out. To get those specimens, "you need collaboration of physicians." The best samples are collected from what a patient coughs or sneezes out, but "collecting this is dangerous," Han notes, because it can easily infect the researchers. Other sources of the virus are sputum, stools, and blood.

Citing concerns in China, Han is reluctant to disclose how Genaco was able to get its specimens. Given how secretive the Chinese have been about SARS, the reticence isn't surprising. "They are very sensitive on disclosing where and how you get the samples," he says, explaining that he hopes to disclose the information soon, after clearing some government hurdles.

Han and his partners say his test will prove valuable, even if something of a miracle occurs and SARS really does disappear from the face of the earth. Even so, says Herbert Wong, executive chairman of UPMG, Genaco's partner, "We haven't seen the last of viruses. There will be new ones."

CHILLING RING. Until SARS came along, Han was focusing on his passion -- prenatal testing. His father, who died in 1984, was a well-known geneticist in China and one of the founders of the Chinese Medical Genetics Assn. Inspired by his father's work, the younger Han has been working for a decade to introduce in China the sort of screening for Down's syndrome that's now common in the U.S. His company sells inexpensive kits and software to help doctors do the "triple screen" that indicate whether a fetus is at high risk of Down's. Han is also the co-director of a technology center in Beijing connected to the government-funded Birth Defects Reduction Project.

Given China's reputation for forced abortions, that project's name has a chilling ring to it. And Han realizes that the work is controversial. But he insists that he's doing good. By introducing testing procedures from the West, he says he's helping to empower couples.

"In China, the physician usually gives a very direct order: If you have a Down's baby, you need to have an abortion," he says. Han says: "You should only tell the patients the information, not make the decision for them. That's what we try to teach the physicians."

TESTING, TESTING. Han is hopeful that the SARS outbreak will prompt China to put invest more into its health-care system. It's even possible that SARS will jump-start the biotech industry in China. But Han has his doubts, since China has a lot of catching up to do. "There are many biotech companies in China with me-too products and me-too technologies that have low entry barriers. The margins are low, and they're competing on price."

He points out that in the U.S., the big pharmaceutical companies show a lot of interest in the latest developments from small biotech outfits. "In China, you don't have a pharmaceutical industry with new-drug development capability at all," he says. Average research and development budgets in China are less than 2% of revenues, while in the U.S. they're in the double digits.

The result: More biotech companies will be doing work like Genaco's -- focusing on tests for illnesses. While Han and Genaco will face increased competition, the market should be big enough to share, because China has no shortage of disease -- with or without SARS. Einhorn covers technology from Hong Kong for BusinessWeek. Follow his weekly Online Asia column, only on BusinessWeek Online

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