Editor’s note: This story has been provided with permission from Interfax China. Interfax China pharma news is located at www.interfax.cn/news/pharma.

The Shanghai government will offer financing aid to biotech companies developing new projects, according to a government official at an industry forum on July 8.

"Most of the small and medium-sized biotech pharmaceutical companies in the country have financing issues," said [Dr.] Yu Ningni, director of the Pudong Science & Technology Development Fund Bureau at the ChinaBio® Investor Forum 2008 [in Shanghai]. "We have offered and will continue to offer all kinds of aid to those companies carrying out new research projects."

Yu is also the vice general manager of Shanghai Zhangjiang Biotech & Pharmaceutical Base Development Co. Ltd. (SZBPD), the executive board member of Pudong Science & Technology Venture Capital Co. Ltd. and the deputy director and secretary-general of the Bio Pharmaceutical Association of Pudong New Area.

The lack of research funds has always posed a large problem for biotech companies in China as the biotech sector is considered high-risk.

However, Yu said that investors are not too worried about the research and development capability of China's biotech projects. "What they are concerned is if companies can get enough funding to carry out their research processes to the end," Yu said.

"To minimize risks, it is very important to analyze a project thoroughly before investing money," Yu added. "We need investors that are equipped with international marketing experience and are committed long-term in helping to develop the sector."

SZBPD is mainly engaged in assisting companies that carry out research projects and wish to apply for national and local funds as well as in providing free consulting to biotech companies. The company, on behalf of the Shanghai government, focuses on investment in early-stage research projects.

One such fund that SZBPD is linking biotech companies to is the Zhangjiang Biotech Pharmaceutical Hatching Innovation Fund. The first stage will involve allocating RMB 20 million ($2.9 million) worth of funds to companies, according to Yu.

Biotech companies can also gain access to a different fund after a project is evaluated and deemed suitable by SZBPD, which will invest in the company in return for shares. In addition, the Pudong Science & Technology Development Fund, another government fund, will contribute five times the amount that SZBPD invested without conditions or payback. The maximum amount that the Pudong Science & Technology Development Fund will contribute is RMB 800,000 ($116,800) for every project.

"If a project has attained financial support from SZBPD, it will be easier for it to apply to other national or local government funds later on as SZBPD has already done a full evaluation of the project prior to investment," Yu pointed out.

"If you have a good idea and you want to develop it, you should come to us and we will help you to realize that," Yu noted.

Disclosure: none