Director for Strategic Planning, Quintiles,
Asia Pacific and Chairman of BioSingapore, Singapore
Singapore is the world’s third most innovative country in biotechnology1 (behind only the United States and Denmark), according to Scientific American magazine’s annual Worldview ranking for 2012,2 distinguished by its high government investment, political stability and a predictable regulatory regime. New Zealand and Australia were next highest ranked in Asia Pacific, at 9 and 10, respectively; Taiwan ranked 21, South Korea 22 and Malaysia 29. Singapore has been near the top each year since the magazine first began the rankings in 2009, when it ranked second.
Singapore offers a solid infrastructure for bio-entrepreneurship, with developments such as Biopolis, Fusionopolis and Tuas Biomedical Park. All of the world’s top 10 global biopharma companies have a presence in Singapore, and 15 blockbuster drugs are produced in the country, according to the industry association, BioSingapore.
Despite these substantial achievements, financial uncertainty remains in Singapore, with many companies facing challenges in achieving growth and managing costs, and as a result being potentially open to innovative approaches. Areas for future attention include the three main phases of drug development: basic research, translational research, and commercialization. In these areas, Singapore may be able to benefit from the experiences of its competitors in the Asia Pacific region, particularly South Korea and Taiwan.
Singapore biotech support and innovation
Among the many initiatives supporting biotech in Singapore, the country’s Agency for Science, Technology & Research (A*Star) has 14 public research institutes and more than 200 industry collaborations. In late 2012, A*Star and the Singapore Ministry of Health launched eight projects intended to improve understanding and treatment of diseases that are prevalent in Asia, covering topics such as eye research, genetic orphan diseases, and translational and clinical research.3 Another key program is the Singapore Biomedical Sciences (BMS) initiative, launched in 2000 to develop the biomedical sciences cluster as a key pillar of Singapore’s economy, alongside electronics, engineering and chemicals.4 Four agencies collaborate to develop the BMS cluster.
- The A*Star Biomedical Research Council funds public research initiatives
- he Singapore Economic Development Board’s (SEDB) Biomedical Sciences Group promotes private sector manufacturing and R&D activities while Bio*One Capital functions as the biomedical investment arm of EDB.
- he Ministry of Health’s National Medical Research Council funds and supports public research initiatives.
- he Standards, Productivity and Innovation Board (SPRING Singapore) supports Singaporean small & medium BMS enterprises through grants & productivity incentives. The agency has also launched the Medical Technology Accelerator in association with private investors to spur growth in the MedTech sector
The country provides multiple financial programs and packages, including the Research Incentive Scheme for Companies (RISC) and Initiates in New Technology (INTECH). Around 29 government organizations offer incentives and grants to investors. From 2011 to 2015, the Singapore government has committed SGD 16.1 billion (US$ 13.2 billion) to R&D, of which 40% has been allocated to biomedical sciences.5 Manufacturing output from this sector increased four-fold from SGD 6 billion per year (US$5 billion) in 2000 to SGD 27 billion (US$22 billion) in 2011.
In 2013, there will be an expansion of A*Star’s Growing Enterprises Through Technology Upgrades (Get-Up) program,6 aimed at boosting the global competitiveness of local technology-intensive enterprises. This program builds on earlier initiatives – from organizations such as the SEDB, SPRING Singapore, International Enterprise (IE) Singapore and the technical capabilities of A*STAR Research Institutes – to overcome local financial, talent and technology constraints.
Elsewhere in the Asia Pacific region, South Korea and Taiwan have worked to overcome similar constraints with a variety of approaches.
Learnings from South Korea’s novel ‘biocluster’ model
The South Korean government began promoting biotechnology in the mid-1980s, developing national policies through the establishment of the 1st Framework Plan for Biotechnology Promotion (Biotech 2000) in 1994.7 Investments in biotech R&D rose significantly in the 1990s and risen by 23% annually since the launch of Biotech 2000. As of 2010, biotech R&D investment totaled KRW 1,438.3 billion, up from 53.6 billion won in 1994, and KRW 246.2 billion in 2000.
Korea currently has 853 biotech companies. Korea’s biotechnology ranked 11th in the world in terms of publications of scientific papers, and 520 biotech patents were registered in the US by Korean entities between 2006 and 2010. Over the past 30 years, some 30 new drugs have been approved by the Korean regulatory agency, with 13 Investigational New Drug applications approved by the US FDA and EMA, and 70 new drug candidates and technologies out-licensed to 20 countries, and some 400 new drug candidates currently under development.8
South Korea is striving to be a global hub for clinical trials. The Korea National Enterprise for Clinical Trials (KoNECT) set up a partnership with Quintiles in 2011 to enhance clinical research standards and expand capacity. KoNECT’s mission is to meet increasing demand for clinical trials and raise national competitiveness by fostering human resources, developing core technology and building a sound infrastructure to become a global clinical trial hub.9
South Korea’s biotech plan is outlined in BioVision 2016, an ambitious approach to create a sophisticated research base, develop products and processes based on interdisciplinary science, and become one of the world’s top seven biotechnology powerhouses by 2016.10 Commercialization depends on regional ‘bioclusters’ with venture capital funding. Two complexes, Daegu Medivalley and Osong Biohealth Technopolis, are scheduled for completion this year, according to the current Advanced Medical Complex Comprehensive Plan.11
The country’s large, family controlled conglomerates known as the chaebol (or business associations), such as Samsung, LG, Hyundai and SK, took an early lead in diversifying into biotech. Major investors in this sector have included CJ (originally part of Samsung), LG Life Sciences and SK Pharma.12 Tongyang Securities lists the major Korean drug makers as including Dong-A, Green Cross, Yuhan, Hanmi, Daewoong, CKD, LG Life Sci, Celltrion, and SK Chemical. The chaebol conglomerates fund biopharma efforts at their own R&D institutes, where the model is for research directors to return regularly to academia with the goal of driving academic development of promising new technologies. Hyundai has had a biotech fund in place since 2000.13 Both Samsung & LG have their own advanced research institutes within renowned universities to tap on the academic research to create breakthrough technologies.
The South Korean government offers incentives for innovative pharmaceutical companies14 under the Special Act on Pharmaceutical Industry Development and Support, which gives these companies priority for state-funded R&D projects and tax incentives or preferential drug pricing.
South Korea in 2013
- Unique Traits: Chaebol diversifying into biotech
- Learnings for Singapore: Interesting commercialization model based on regional ‘bioclusters’ with venture capital investment; and close interaction between the chaebol and academia, to ensure availability of cutting-edge technologies.
Learnings from Taiwan: Leveraging a strategic geographic location
The Taiwan government has listed the biotech sector as an industrial development priority since the early 1980s.15 Government initiatives include the National Research Program for Genomic Medicine, and the National Science and Technology Program for Biotechnology and Pharmaceuticals. Another initiative is the National Development Fund under the Executive Yuan (the Cabinet).16 The long-term objective is for Taiwan to hold 3% of the world’s biotechnology market. More recently, Taiwan has been gearing up to boost start-up ventures, attracting Asian and global attention for investments, clinical trials and joint research projects.17 The country’s government has launched the Supra Incubation Centre (SIC), aimed at accelerating the growth of biotechnology companies and commercialization of new products. Taiwan has also set up the Taiwan Medtech Fund biotech venture capital fund.18
Taiwan claims a strategic location, near to China and straddling Northeast and Southeast Asia,19 a strong legal and IT framework, abundant venture capital, and an educated workforce (particularly in biology and IT). Compared with other countries in the Asia Pacific region, Taiwan takes a more entrepreneurial approach, with the government supporting several research institutes. Taiwan’s main biotech and biomedical R&D efforts occur at non-profit organizations, particularly the Academia Sinica, Development Center for Biotechnology (DCB), Industrial Technology Research Institute, National Health Research Institutes, and Animal Technology Institute Taiwan.20 All universities are involved in basic research, and new products are developed, with government funding, up to the preclinical stage and proof-of-concept, and then outlicensed to local Taiwanese biotech and device companies. There is an agreement in place that Phase III trials will take place in China.
In its 2012 Taiwan Overview, Citi Research noted that in that country, drug developers currently contribute minimal revenue, but have potential for robust growth in coming years.21 The analysts identify local drug firms as including PharmaEngine, Medigen, TWi Pharma, and TLC. Taiwan’s drug developers typically seek overseas partners to bring their products to market, with the current model for Taiwan’s new drug development focusing on the development portion (animal studies and clinical trials) of the value chain. Drug developers often license-in clinical leads from international pharmaceutical companies or Taiwan-based academic and government institutions.
Healthcare was the best-performing sector in Taiwan last year, rising 66% and even on a market cap-weighted basis ranked 10th out of 24 sectors. Recent successful IPOs were among the key drivers to last year’s sector performance, In fact, the surge in IPOs is one factor that distinguishes the BMS sector in Taiwan from other markets in the region. In the past three years, Taiwan has seen 11 IPOs in the sector versus three in Korea and none in India. And although China had 35, the Taiwan BMS sector still significantly outperformed that of regional markets over the past two years. The availability of a vibrant BMS IPO market attracts many VCs & private equity to Taiwan which ensures high level of financing options for domestic BMS enterprises.
Taiwan in 2013
For Singapore: A Hybrid Model To Accelerate Innovation?
- Unique Traits: Focus on genomic medicine; and collaboration with neighboring countries to drive development as a sub-region.
- Learnings for Singapore: There is a role to lead biotech development in the ASEAN region as a whole.
Going forward, Singapore needs to leverage its many strengths in the biotech sphere, including strong government support and strategic geographic location, to take advantage of opportunities for expansion and innovation. There is potential for Singapore to adopt a hybrid model including learnings from South Korea and Taiwan. Among the unique features of South Korea that could benefit Singapore include Korea’s interesting commercialization model based on regional ‘bioclusters’ with venture capital investment; and close interaction between the chaebol and academia. From Taiwan, Singapore could consider adopting a high-tech research focus, coupled with increased co-operation with other Asia Pacific countries. There may also be opportunities to ride the wave of increasing licensing activity being seen in the Asia Pacific region as a whole, with a drive towards more innovative drug development, and industry consolidation in line with to that in South Korea, Taiwan, China, India, Australia and New Zealand -- all of which also receive substantial government support.22
There is also a need for Singapore to review regulations to allow the listing of Local BMS enterprises on the secondary exchange Catalist. This will help to increase VC activity in Singapore and expand the financing options available to the local BMS companies. Singapore should also try to attract Global SMEs with innovative technologies to undertake collaborations with Singaporean BMS companies. This will help to increase the pool of technologies that can be brought to market. Singapore could also benefit from building on the increasing regional emphasis on stratified medicine (personalized medicine, pharmacogenomics, observational studies and others) in developed Asian markets, with a focus on new therapies for traditionally Asian diseases23 — all with the goal of building a truly regional hub of biotech expertise and innovation.
About the Author
As the Director of Strategic Planning Asia Pacific, Simranjit supports the Quintiles Grow Asia strategy by leading the process to understand, synthesize and communicate market trends, client needs, and competitive intelligence in the region. He provides thought leadership on key market events and collaborates with the Global & Asia Markets leadership teams to incorporate market and competitive intelligence into strategic approaches for the region. Simranjit is responsible to identify business adjacencies within the region and collaborate with government agencies to bring selected opportunities to market. He has been instrumental in putting together Quintiles Asia’s strategic partnerships with the Korea National Enterprise for Clinical Trials (KoNECT), China Investment Promotion Agency (CIPA) & the Malaysia Biotech Corporation (MBC).
Prior to working for Quintiles, Simranjit spent 6 years as the Director of Healthcare Consulting at Frost & Sullivan. He successfully managed the Asia-Pacific Healthcare practice and implemented several strategic consulting projects for MNC pharma & medtech companies, government agencies & financial institutions in Asia. Simranjit also serves as the Chairman for BioSingapore & plays an integral role to develop the biomedical sector in Singapore.
Simranjit holds a Bachelors Degree in Biomedical Sciences from the National University of Singapore and Grad. Dip Bio-Entrepreneurship from the University of Pennsylvania (UPENN). He also has a Masters in Business Administration from the Graduate School of Business, University of Chicago.
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