The funding round for Avistone Pharmaceuticals was led by Vivo Capitals. Other investors that also participated include Bain Capital and Primavera Capital.

The investment will support the combination of Avistone with Pearl Biotechnology to create a fully-integrated targeted oncology platform.

Dr. Hepeng Shi, Chairman, CEO, and Founder of Avistone told the media, “Avistone is a science-driven, innovative biotechnology company committed to the discovery and clinical development of first-in-class and best-in-class drugs.

“We are thrilled for our company, team, and product pipeline to be recognised by such well-established global life sciences investors as Vivo Capital, Bain Capital, and Primavera Capital. We look forward to leveraging their resources and capabilities to realize our vision to become a global oncology leader that provides more effective treatment options and improves quality of life for patients around the world.”

Avistone Pharmaceutical, which is based in Beijing develops precision oncology therapeutics with a strong focus on lung cancer treatments.

Shan Fu, Managing Partner and CEO of Greater China for Vivo Capital told the media, “The deal exemplifies Vivo’s investment capabilities in both innovation and private equity transactions in China, as well as extraordinary collaborations both internally, led by Drs. Hongbo Lu and David Liu, and externally, joined by Bain Capital and Primavera Capital.”

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Impact of Covid-19 on the biotech industry
The Covid-19 pandemic’s impact on the biotech industry will be the widespread and long-lasting. The biotech industry had an instrumental role to play in the development of Covid-19 vaccine, that too in record time. But the pandemic’s role in shaping the industry won’t fade away even as the vaccines are administered across the globe.

Over the last two decades, we have witnessed a number of epidemics, be it SARS in China, Ebola in Africa, or the Covid-19 epidemic, also in China. What has changed now is people are aware that the possibility of another pandemic in the near future is moderate to high. Covid-19 pandemic caught us off guard. The healthcare sectors in many countries were stressed beyond imagination.
Given the advancement of technology, there is also a chance we could possibly predict where the next pandemic will break out and even develop a cure to prevent casualties. The biotech industry needs to need to prepare for adverse events because they will happen.

More broadly, what Covid-19 has done is that it brought biological science to the attention of healthcare workers, agencies, governments as well as the general public. So, biotech companies and their ecosystems are expected to continue to scale up rapidly and keep riding the wave in the near future.

Rise of the biotechnology sector
Buoyed up by advances in science and technology and the Covid-19 pandemic, the biotech sector attracted record levels of investment through 2020 and into early 2021. VC investment in biotech companies across the globe grew by 45 percent in a year, taking the 2020 global total to $36.6 billion. While the US was on the top when it comes to investments, Europe was not far behind followed by China. Particularly in Europe, funding size grew at more than twice the rate than in the US, according to McKinsey. While in China, the number of funding rounds increased fourfold when compared to Europe and the US.

Deals such as partnerships, joint ventures, licensing agreements also doubled between 2019 and 2020 to reach $170.6 billion. During the period, we witnessed biotech companies partnering with big pharma companies, other biotech companies and a broad range of other organisations. Many big pharma companies have also acquired biotech companies to sustain their portfolio strategy while also pursuing pipeline and top-line growth.

Biotech companies across the globe raised $34.3 billion in 2020 by going public, an increase of 186 percent on the previous year. It is, without doubt, IPO activity has grown faster than any other category of fundraising. While most of the biotech companies that went public were located in the US, companies in other parts of the world such as China, have also seen significant growth in the past few years.

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Blockchain is a decentralised shared ledger that can store various forms of information (e.g. records of transactions, computer code, archive entries, digital content). Because the ledger is entirely decentralised, i.e., no central `authority’ vouches for its authenticity, it is not only essential that everyone has the same version of the ledger, but also that no one can tamper with it. This is where the power of blockchain resides. It makes adding new entries to the ledger significantly costly—by means of complex computational problems that need to be solved—so that tampering with the ledger would effectively be infinitely costly. As a result, no central authority is needed to maintain and update the ledger.

Coming from nowhere, with no support aside from its users, the incredible development of Bitcoin, and its rapid growth in popularity as well as in value (e.g. from USD 2,000 to USD 17,900 between June and December 2017) has led to the wildest fantasies. In the context of booming Fintechs and across-the-board ‘uberisation’, companies have been seeking to make sense of upcoming disruptions caused by the blockchain technology. Use-cases have been identified in finance, supply chains, insurance, pharmaceuticals, government, military, etc.

Yet, such sudden infatuation tends to happen, with every new technology. Technology basically blinds us to the point that we forget that it is nothing without usage. Emerging technologies (think laser, 3D printing, and even PCs) often remain for decades ‘solutions without a problem’, as none of usages initially envisaged end up making sense. It is when the right usages finally emerge (optical disks, for instance), that they become suddenly disruptive. Instead of speaking of ‘disruptive technologies’, we should really be speaking of ‘disruptive usage’.

So what does this mean in relation to blockchain?
The many envisioned usages—exchange of financial assets, micro-lending, food and shipment tracking, digital identity, smart contracts, e-government, drug authenticity checks, etc.—are all very interesting, but none of them effectively require blockchain—a well-functioning, secured platform would work just as well. For all these use cases, it is easy to find existing, similar activities that do not involve blockchain to any extent. In fact, it could be argued that blockchain is sometimes so poorly understood that it has become a new synonym for ‘digitisation’.

If all could be done without blockchain, what would be the advantage of doing things with a blockchain?
Blockchain is secure, but so are the many banking, financial, and public services we use every day. The (only) real advantage of blockchain is that it is completely decentralised and does not require pre-existing trust. But there is a catch. First, there are limits to the ‘trustlessness’ of the system; only what is happening on the blockchain is guaranteed. For anything else (swapping Bitcoin for $, tracking physical goods, etc.), you have to trust that the other side of the deal will indeed happen. Secondly, the ‘trustless’ environment comes at a significant cost: for it to be fully decentralised, secured, and not require trust, blockchain requires a ‘proof of work’ to make it impossible for anyone to tamper with the ledger. This means thousands and thousands of ‘miners’ carrying out simultaneously highly intensive computer calculations so that one of them wins the right to add a new entry in the ledger. All the rest is basically wasted. Many studies have pointed out that Bitcoin is exceedingly wasteful: a single Bitcoin transaction leads to a consumption of several hundred kWh of energy, enough to power a house for a couple of weeks or run a fridge for a whole year. Clearly, a well-designed ‘traditional’ platform would be much more efficient (and just as secure). While attempts have been made to overcome this issue, removing the ‘proof of work’ creates problems of its own. Indeed, for the system to remain secure, it has to remain infinitely costly to tamper with it. The only way to decrease this cost is to establish (or assume that there is) some form of trust in the system and/or decrease its degree of decentralisation.

Bearing this cost in mind, what are the key usages of blockchain?
Only two really stand out: when one does not want to use a middleman or when one would like to use a (trusted) middleman, but one cannot be found. While the first usage is clearly fringe, the second is the source of the actual blockchain disruption.

While predicting the future is always difficult (especially in the case of emerging technologies), considering the current and foreseeable state of the technology, it is unlikely that any sizeable company will find blockchain of significant interest for its core business (though they might rebrand existing services as ‘blockchain’ anyway). Likewise, any small or emerging structure that may have no choice but to use blockchain (for lack of a trusted intermediary or authority) will most likely eventually, as they grow, find it more fitting to use a more centralised platform.

However, the critical point is that blockchain does not need to be used for it to be disruptive. The simple threat that it might be used might be sufficient to disrupt existing markets and undermine established businesses.

In fact, blockchain might even be the last piece of the ‘digital disruption puzzle’. Indeed, digital disruptions, whether related to content, services, and, tomorrow, manufacturing, all require a trusted, central intermediary/platform (e.g. Facebook, Airbnb, eBay) to develop on a significantly large scale. Until such a trusted intermediary emerges, disruption has to wait. Blockchain helps kick-start things much more rapidly and on a much smaller scale—any niche, regardless of how insignificant it may appear, can be explored. While blockchain is unlikely to be used to compete head-on with established businesses, it will do so sideways, exploring new usages, new ways to do things, with new actors and stakeholders. Incidentally, disruption might not be visible for a long while, until it appears that the activities of established businesses have themselves become a niche in a much wider market they no longer control, just like it happened with the music industry,still pursuing high-quality audio with DVD-A and SACD, when all people wanted was low-fi MP3 to take on the go), or the hotel and taxi industries with people renting couches or sitting in a stranger’s car.

To sum up, change is coming, but not in the way we envisage it. In this brave new world it has unleashed, blockchain might not even play a significant role—who uses peer-to-peer networks now that Netflix and Spotify exist? Meanwhile, it is time to take a good pair of sunglasses to finally see blockchain for what it actually is: a niche technology whose very existence might nonetheless disrupt even the most established players, by facilitating market entry.

But the fact that anyone can enter a market does not mean that they will. It is for established players to radically change their business models to ensure that they remain tomorrow the central players of a much wider ecosystem.

About Thierry Rayna

Prof. THIERRY RAYNA, PhD, is a professor of Innovation Management at École Polytechnique, within the Department of Innovation Management and Entrepreneurship, and a researcher at the CNRS i3-CRG (Management Research Centre, Innovation Interdisciplinary Institute).

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June 3, 2015: Institute of Finance & Management subsidiary of aafaq Islamic Finance, a leading provider of Islamic finance products and services in the UAE, has recently signed a memorandum of understanding (MoU) in London with the University of Bolton’s Centre for Islamic Finance, an initiative designed to facilitate research and promote the understanding of Islamic Finance through lectures, conferences and a joint professional certificate in Islamic Banking.

Under the terms of the MoU, both parties have expressed their full commitment in the continued advancement and growth of Islamic Finance—collaborating on a series of projects and initiatives that includes conducting and commissioning joint research in the field of Islamic Finance; develop and promote a new Islamic Banking Professional Certification program and host and organise an annual Islamic Finance-based event.

H H Sheikh Faisal Bin Saoud Al Qassimi, Board Member of aafaq Islamic Finance, shared that the signing of the new MoU proves to be both timely and strategic as global financial experts continue to laud Islamic Finance’s continuing growth. The new alliance between aafaq Islamic Finance and the University of Bolton’s Centre for Islamic Finance represent a cooperative framework that looks towards encouraging more development in Islamic Finance on regional and international levels, particularly in the fields of education, research, capacity building and consultancy.

Dr. Mahmoud Abdalaal, CEO, aafaq Islamic Finance, said, “We are extremely excited with this new partnership that we have forged with the University of Bolton’s Centre for Islamic Finance. aafaq Islamic Finance is confident that this strategic new alliance will successfully be able to drive in more awareness on the many benefits and advantages offered by Islamic Finance. Through our partnership with the University of Bolton’s Centre for Islamic Finance, we are looking towards commissioning more research and studies while also laying the foundation for an international certification program for Islamic banking professionals.”

The Chairman of the Centre for Islamic Finance and the first Chancellor of the University of Bolton, The Baroness Morris of Bolton said, “I am delighted we have signed this MoU and look forward to working with aafaq in encouraging more development in Islamic Finance. This collaboration will help to strengthen the University’s close ties to the UAE and builds on our core strength of working together with leading and innovative industry practitioners.”

The Centre for Islamic Finance was launched in 2012 at the University of Bolton to facilitate research and create a better understanding of Islamic Finance through the holding of key lectures, conferences and the offer of short course programs.

Professor Mohammed Abdel-Haq, Director of the Centre for Islamic Finance and former Global Head of private banking at HSBC Amanah, welcomed the enthusiasm and vision of aafaq and looked forward to working together with aafaq to help drive a better understanding of the benefits and advantages of Islamic Finance.

“We have students studying with us at Bolton for their PhDs in Islamic Finance from around the world and have established a reputation which attracts respected speakers and supporters such as Norman Lamont, the former Chancellor of the Exchequer. Our work with a Company of such quality as aafaq, a leader in Islamic Finance in the UAE, will help us to broaden our research and to reach and educate more people working within the sector,” concluded Professor Abdel-Haq.

Press Release

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Camille Paldi

April 28, 2015: Beximco Pharmaceuticals Ltd, Bangladesh Export Import Co. Ltd., Mr. Ahmad Solail Fasiuhur Rahman, Beximco (Holdings) Ltd. v. Shamil Bank of Bahrain E.C. [2004] EWCA Civ 19, the defendant Beximco Pharmaceuticals Ltd. and the other borrowers entered into a murabahah agreement with the plaintiff.  The defendants defaulted and after a series of various termination events under the agreements, the plaintiff finally brought the case to court and made an application for summary judgement. The defendants argued that the murabahahagreements were invalid and unenforceable because they were in actuality disguised loans charging interest (Asutay and Hasan, 2011: 56).

According to the appeal case, the court ruled that an Islamic finance contract could not be governed by shari’ah law in the UK. Even if so specified in the contract, the judge further ruled, in fact, that shari’ah law is not a recognisable form of law containing principles of law capable of governing a commercial dispute in the UK.

Lord Justice Potter stated in Paragraph 2 of the judgment, ‘It is not in dispute that the principles of the glorious shari’ah referred to are the principles described by the defendants’ expert, Mr. Justice (retd) Khalil-Ur-Rehman Khan as: “…the law laid down by the Qu’ran, which is the Holy Book of Islam and the Sunnah (the sayings, teachings and actions of Prophet Mohammad (pbuh). These are the principal sources of the shari’ah.  The Sunnah is the most important source of the Islamic faith after the Qu’ran and refers essentially to the Prophet’s example as indicated by the practice of the faith. The only way to know the Sunnah is through the collection of hadith, which consist of reports about the sayings, deeds, and reactions of the Prophet.”’

Lord Justice Potter, in this judgment, recognises the definition of shari’ah law stated by Mr. Justice Khalil-Ur-Rehman Khan. However, Lord Justice Potter stated that shari’ah law, which in his opinion is more of a religion than law, could not apply to a commercial banking transaction in the UK.

The judge declined to construe the wording of the clause as a choice of shari’ah law as the governing law for the following reasons. First, Article 3.1 of the Rome Convention (which by s.2 (1) of the Contracts (Applicable Law) Act 1990 has the force of law in the United Kingdom. It contemplates that a contract ‘…shall be governed by the law chosen by the parties’ and Article 1.1 of the Rome Convention makes it clear that the reference to the parties’ choice of law to govern a contract is a reference to the law of a country. Lord Justice Potter further argued that the reference to a choice of a ‘foreign law’ in Article 3.3 suggests that the Convention as a whole only contemplates and sanctions the choice of the law of a country: c.f. Dicey and Morris on The Conflict of Laws (13th ed.) vol. 2 at 32-079 (p.1223) and Briggs: The Conflict of Laws at p. 159.’

Lord Justice Potter stated that shari’ah law is not a national system of law and is classified as a non-national system of law such as ‘lex mercatoria’ or ‘general principles of law’ and therefore cannot apply to a commercial transaction in the UK.

Colon (2011:425) states that even though the Rome Convention has been replaced by Regulation (EC) No. 593/2008 of the European Parliament and the Council of June 17, 2008 on the Law Applicable to Contractual Obligations (Rome I), the conflict of law rules remain the same.

In this appeal case, English law was confirmed as the governing law and it was further confirmed that English law does not recognise shari’ah law as a valid source of law to govern a commercial contract. Furthermore, even if shari’ah law were recognised under English law, under the conflict of law rules applicable in England and Wales, according to this judgment and the new Rome I, English law would prevail as the governing law must be the law of a State.

Colon (2011:425) points out that according to Beximco, under English law a murabahah agreement may be treated the same as an interest-bearing loan, which ironically was part of the initial claim that based on the governing law clause, the murabahah agreements were invalid and unenforceable because they were in truth disguised loans charging interest (Asutay and Hasan, 2011: 56).

In fact, the adjudication of the dispute by an English court guarantees turning the murabahah agreements into loans charging interest.

Beximco interpreted the contract in light of the commercial goals that it served to accomplish, as English law requires (Colon 2011:426) and in line with the common law, interpretational approach as explained by Asutay and Hasan.  This strict approach decimated the Islamic finance transaction (2011:431).

Camille Paldi is CEO of Franco-American Alliance for Islamic Finance

Earlier Columns:

Islamic finance and the halal industry

Japan has Islamic finance in the pipeline

Islamic insurance: The next global trend

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