The Jackson Laboratory, the Bar Harbor-based biomedical research institution, is expanding its operations in China, which has emerged as the hottest country outside the U.S. for genetic research into diseases.

China is handing out millions of dollars in grant funding for research and offering easy access to medical data on its massive population, which has prompted biomedical researchers from all over the globe to flock there, despite China’s poor record of protecting intellectual property.

While Jackson Lab hasn’t applied for any Chinese grants, it is testing the waters by allowing members of its research staff to partner with other scientists at Chinese academic institutions on grant-funded research projects.

Jackson Lab is also building out a Chinese distribution network for its genetically modified laboratory mice. Founded in 1929, the nonprofit research institution is the world’s leading supplier of lab mice specially bred for scientific experimentation. Its research arm is funded almost entirely by sales of mice and by grants.

Analysts say there are tremendous opportunities in China to conduct genetic research that could lead to improvements in global health, but there are also risks. For example, China’s scientific ethics standards are not yet on par with other developed countries, and it has a notoriously poor track record when it comes to protecting intellectual property.

There has been “an explosion of biomedical research” in China since the country set its sights on becoming a world leader in certain critical areas of science, including genetic research, in recent years, said Ken Fasman, senior vice president of research at Jackson Lab.

While the U.S. still spends more money overall on biomedical research, China is catching up fast and could even eclipse the U.S. in annual research spending within the next 10 to 20 years, Fasman said.

“The rapid increase of investment at the national and regional level in China far exceeds anything in the West,” he said. “So if you want to be involved in the global community of biomedical research, you need to be paying attention to what’s going on in China.”

Even more important than the lure of funding is the fact that China’s huge population and highly centralized health care system make it possible for researchers to readily access medical data on tens of millions of patients, Fasman said. China is home to nearly 1.4 billion people, and the country’s health care system isn’t fragmented into thousands of local providers like that of the U.S.

That means researchers in China studying even the rarest of diseases will have a much better chance of accessing statistically relevant amounts of human data, Fasman said. When it comes to biomedical research, that data is even more precious than grant funding, he said.

To that end, Jackson Lab is moving forward cautiously on a handful of collaborations between its staff members and Chinese research teams, although it has so far turned down offers for more formal partnerships that would require Jackson Lab to maintain a lasting physical presence in the country.

The Chinese government has openly encouraged its own research institutions to collaborate with foreign researchers and has provided ample grant funding, even offering in some cases to build new lab facilities for joint projects.

A Jackson Lab scientist recently entered into a collaboration with researchers at Xi’an Jiaotong University in China’s Shaanxi province on a project that involves a precision medicine lab. Charles Lee, a former Harvard Medical School professor who runs a genomics lab at Jackson Lab’s research campus in Farmington, Connecticut, is leading the project.

The Xi’an Jiaotong lab, which eventually will staff up to 30 scientists, is focused on exploring potential cancer treatments using mice specially bred by Jackson Lab to have highly deficient immune systems.

Jackson Lab recently turned down another, more formal proposed partnership with Wenzhou Medical University in China’s Zhejiang province that would have included building a dedicated lab for Jackson Lab’s research. One of Jackson Lab’s scientists is still working with Wenzhou researchers on a study of eye disease genetics, however.

“We ultimately decided that we didn’t need an institution-to-institution level of collaboration,” Fasman said, adding that such partnerships still could be created in the future.

Regarding intellectual property concerns, he said the lab’s researchers always sign contracts with the collaborating Chinese academic institutions that set forth the rules of ownership for any intellectual property resulting from the research. Fasman said he doesn’t think those institutions would risk their reputations by violating the contracts.

On the mouse distribution side, Jackson Lab is boosting its Chinese presence in a more concrete fashion, according to Charles Miller, the lab’s director of customer support and international distribution. It has formed a partnership with the National Institute of Biological Sciences in Beijing and a logistics firm to develop a nationwide supply chain for its lab mice. Jackson Lab has developed over 11,000 strains of genetically consistent mice for use in a wide variety of biomedical testing applications, Miller said.

The mice are bred at Jackson Lab facilities in Maine and California, and then shipped by air to a Jackson Lab-owned quarantine facility in China, where they can then be distributed to labs in many areas of the country.

Monica He, director of international affairs at the Maryland-based trade group Biotechnology Innovation Organization, or BIO, said China is becoming a land of opportunity for biomedical companies and research institutions around the globe, but there are still lingering concerns about some of its policies.

“While recent regulatory policy reforms in China are expected to create enormous opportunities for global firms, it remains a complicated market for emerging biotech companies and multinational corporations alike,” He said. “China has proposed a series of policies to improve their innovation environment; when implemented they must provide a level playing field for domestic and foreign companies alike.”

In 2018, BIO requested that the Office of the U.S. Trade Representative place China on a “watch list” for its failure to adequately protect foreign-derived biomedical innovations such as patented drugs. It also criticized Chinese officials for their failure to adequately crack down on sales of counterfeit or substandard medications.

Jackson Lab already has accused one Chinese university of illegally breeding and reselling strains of mice that the lab developed. Filed in 2017 against Nanjing University, a Jackson Lab mice customer since 2002, the lawsuit has since been referred to arbitration.

Miller said Jackson Lab sells its mice all over the world, and protecting intellectual property is just as much of a concern in other countries as it is in China. He said Jackson Lab is committed to expanding its activities in China because “that’s where the next generation of breakthroughs will occur.”

“There’s a lot of innovation that’s happening in China, and we want to be a part of it,” Miller said.

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