This story first appeared in China Report, MIT Technology Review’s newsletter about technology in China. Sign up to receive it in your inbox every Tuesday.

Last week, I worked with my colleague Antonio Regalado, our senior editor for biomedicine, to break a truly inspiring and honestly kind of wild story: Chinese scientists used gene therapy to restore hearing ability in children who were born deaf. You can read the full story here.

On Friday, Shu Yilai, a professor and practicing surgeon at Fudan University in Shanghai, shared results of the trial, in which young patients received injections of a virus that added replacement DNA to the hair cells in their inner ear. Four out of five participants have since developed the ability to hear. As we wrote, “Scientists in China say [they] are the first people ever to have their natural hearing pathway restored … The feat is even more remarkable because until now, no drug of any kind has ever been able to improve hearing.”

This is a phenomenal step forward in using gene therapy to restore human senses, and Antonio and I heard how important this is on a personal level from Qin Lixue, whose six-year-old daughter Yiyi is the third patient to participate in the trial. She told us about how Yiyi, who is in the first grade, “used to need other students to wake her up” at naptime at school because she disconnects her cochlear implant when she’s sleeping. Now, Qin told us, “she tells me she can hear the music that ends naptime and wake up by herself.”

But this remarkable result faces the same challenging calculations that plague a lot of medical solutions, both gene therapies and traditional medicine: they are used to treat a very specific and rare disease, so the market demand doesn’t justify the spending in R&D and mass production.

This particular gene therapy works only when the deafness is due to a lack of otoferlin—a protein that’s produced to transmit hearing signals from the ear to the brain. Only around 1% to 5% of cases of inborn deafness are caused by lack of otoferlin, so many more deaf children aren’t able to benefit from this therapy yet.

While costs aren’t a factor for experimental trials like the one Yiyi took part in, they will become more salient if the technology is to be introduced to the mass market. 

One thing that may help is government subsidies. In a bid to develop Shanghai’s competitiveness in the gene therapy industry, for instance, the municipal government has offered local companies sizable subsidies for developing new treatments; a company can receive up to $13 million a year for manufacturing an approved gene therapy product locally in the city. Other local governments in China have announced similar policies, which may attract more biomedicine companies into the field of gene therapy. 

Chinese authorities also may be more willing to spend in this area given the fact that, at least in this one application of gene therapy, the country has raced ahead of its competitors in the West. At least two Western companies have been working on treatments for the exact same type of hearing loss but have not achieved as much success as the Chinese team. “We are in a race. And we won. We have patients with hearing back! We are not in the same league,” Chen says.

Nevertheless, today gene therapy remains a relatively expensive and inaccessible option. Nova Liu, the founder of Shanghai Refreshgene Therapeutics, which financially backed the Chinese research on this gene therapy, estimated that a commercialized product could cost between $125,000 and $250,000. That’s cheaper than other gene therapies currently available (CAR T-cell therapy, which treats cancer, can cost more than $1 million) but significantly more expensive than a cochlear implant (which in China costs just over $10,000).

As Antonio summarized it for me: “Demonstrating that a gene therapy works is not the same as creating a successful medicine that helps people in the real world. For that, companies would need to carry out more studies, get approval, and finally sell the product for a profit. None of that is easy, especially in rare diseases where only a few patients can benefit from the treatment.” 

Some previous products that have shown to be effective in trials have indeed languished before they can be brought to market. This is the next battle that gene therapy will need to fight. 

Are you hopeful this new type of gene therapy for hearing can be commercially viable? Let me know your thoughts at zeyi@technologyreview.com.

Catch up with China

1. Li Keqiang, China’s former second-ranking leader, died of a sudden heart attack on Friday. But public mourning has been stifled online to avoid social unrest. (The Guardian)

2. California governor Gavin Newsom visited China last week to promote collaboration on climate actions. He took a ride in an autonomous SUV from BYD, China’s top EV maker. (CNN)

3. Hugging Face, the popular open-source AI platform, was blocked in China. (Semafor)

4. Nvidia was asked by the US government to immediately halt its export of advanced AI chips to China. (BBC)

5. Beijing set restrictions on opening new oil refineries in order to meet its target of capping total oil refinery capacity at 1 billion metric tons by 2025. China is currently the world’s largest crude oil importer. (Reuters $)

6. Same-sex marriage remains outlawed in Hong Kong, but the court has ordered the government to create an “alternative framework” within two years that recognizes same-sex couples’ legal rights. (AFP)

7. TikTok is asking managers across the world to rate more employees lower in performance reviews, which employees worry may lead to more layoffs. (Wall Street Journal $)

One more thing

China doesn’t have a coffee-drinking tradition, but modern coffee shops have still made their way to the Chinese cities and countryside. At a café named “Escape Plan” in rural eastern China, a fake road sign reads: “Americano isn’t bitter, life is.” Ouch.