A Chinese biotech outsourcing company (CXO) with military ties recently purchased a large piece of land in Florida to build a monkey breeding and quarantine facility.
Florida newspaper Citrus County Chronicle reported on Sept. 22 that JOINN Laboratories, a Chinese CXO pharmaceutical company, purchased a 1,400-acre parcel of land in Levy County in July for $5.5 million to build the facility for primates, mostly experimental monkeys.
However, the site is designated as forestry or rural residential zoning, while Levy County only allows research laboratories in its industrial zone. Stacey Hectus, the county’s planning and zoning director, said that JOINN had been told the site was not suitable for its intended use before the purchase.
“They asked to rezone the property but I stated that a request such as that would not be looked upon favorably by staff because of compatibility and spot-zoning,” Hectus told Citrus County Chronicle. Moreover, because the land was more than 50 acres, the rezoning application needs to be reviewed by the state.
An Epoch Times reporter called the headquarters of JOINN Laboratories in China for comment on what they planned to now do but did not receive any response.
Lab Monkey Shortage
The land purchase comes at a time when China’s contract research organizations (CRO) have been facing a shortage of lab monkeys amid soaring prices.
According to Chinese media reports, the price of an experimental monkey in China has risen from more than 40,000 yuan (about $5,500) to more than 120,000 yuan (about $16,600) in less than two years, prompting CROs to scramble for lab monkey resources.
In April, prior to the land purchase, JOINN Laboratories spent 1.805 billion yuan (approximately $250 million) in China to acquire two lab animal breeding companies. The acquisitions sent stock prices soaring, as the two companies altogether owned roughly 20,000 experimental monkeys.
Chinese Military Background
According to public information, JOINN Laboratories’ founder and chairwoman Feng Yuxia has a U.S. green card. Feng and her husband Zhou Zhiwen, co-founder of the company, both graduated from the Academy of Military Medical Sciences (AMMS) with a degree in pharmacology. Feng worked at AMMS’ Institute of Pharmacology and Toxicology from 1992 to 1995, whereas her husband worked as a researcher from 1989 to 1993.
Zuo Conglin, the general manager of JOINN Laboratories, also graduated from AMMS and worked at the Institute of Aeromedical Research of the Chinese Air Force from 1989 to 1996.
Founded in 1995, JOINN Laboratories is believed to be the first drug safety evaluation company in China and received good laboratory practice (GLP) certification from the FDA of the United States in 2009. It is expanding its operations in the United States and globally while claiming to serve as a bridge assisting Chinese pharmaceutical companies going abroad.
Development and Acquisitions in US
According to Bloomberg’s corporate information, JOINN Laboratories California was founded in 2013, and JOINN Biologics US, also based in the San Francisco Bay Area, was founded in 2018. They offer comprehensive services for all phases of drug development.
Their parent company, JOINN Laboratories, claims on its website that it is a leading clinical and non-clinical CRO.
From May to December 2019, JOINN Laboratories completed the acquisition of the preclinical CRO business of Boston-area Biomere, paying $27.3 million, 100 percent cash. Chinese state media commented that it was the lowest cost and most effective way to enter the North American market.
Biomere is one of the top three preclinical CROs in New England and one of the few preclinical CROs in the region to conduct primate trials, with a client base that includes major pharmaceutical companies such as Shire, Novartis, and Abbott.
Following the acquisition, JOINN California expanded Biomere’s preclinical CRO business from the East Coast to the West Coast, took over Biomere’s former customers, and developed new markets.
US Executive Order on New Biotech Goals
This comes as the U.S. government has recently stepped up measures to protect bioeconomic security.
U.S. President Joe Biden issued an executive order on Sept.12 aimed at “advancing biotechnology and biomanufacturing innovation for a sustainable, safe, and secure American bioeconomy.”
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“We must safeguard the United States bioeconomy, as foreign adversaries and strategic competitors alike use legal and illegal means to acquire United States technologies and data, including biological data, and proprietary or precompetitive information, which threatens United States economic competitiveness and national security,” it stated.
Two days later, on Sept 14, the White House held a summit with various departments, to discuss key steps to advance the executive order, with funding of more than $2 billion, “to lower prices, create good jobs, strengthen supply chains, improve health outcomes, and reduce carbon emissions.”
Following the release of the order, the Sept. 15 acquisition of Nasdaq-listed F-Star by China Biopharma failed to get approval by the Committee on Foreign Investment in the United States (CFIUS), and the acquisition of U.S.-based Snapdragon by Chinese company Calypso was terminated on Sept. 18, due to tightened regulation by U.S. authorities.
Two weeks later, China’s CXO concept stocks all experienced setbacks.
In fact, when the U.S. Department of Commerce placed two subsidiaries of China’s Wuxi Biologics on the unverified list (UVL) back in February this year, the Chinese bio-outsourcing industry was worried that it might become another industry targeted by the United States following U.S. sanctions on China’s chip industry.
The two companies on the UVL list are suspected of reselling export-controlled products or using them for military purposes.
Similar to the situation of China’s chip industry, Chinese biotech and pharmaceutical sectors are highly dependent on imported equipment and overseas business. In 2021, at least six CXO companies in China reported that markets abroad accounted for more than 70 percent of their total revenue. Most of these CXO companies also have overseas R&D or manufacturing facilities.
Zhao Xilong, a senior investment advisor at HSBC Investment Advisory, told Chinese state media that China’s biotech and pharmaceutical companies rely heavily on overseas markets, putting themselves in a “risky” situation.
Article cross-posted from our premium news partners at The Epoch Times.
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