YPAC Project - Final Report Template

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Dec 1, 2012 (4 years and 11 months ago)

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Biotechnology










KOREAN
MARKET RESEARCH REPORT;
BIOTECHNOLOGY

.















PREPARED BY SPIRE RE
SEARCH & CONSULTING
CO., LTD
.


June. 2006.









Spire Research and Consulting Co Ltd,

Website: www.spireresearch.com

Email: Justin@spireresearch.com

Tel:
82
-
31
-
908
-
7630

Fax:
82
-
31
-
908
-
7632





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TABLE OF CONTENT
S
:

TABLE OF CONTENTS
:

................................
................................
................................
..............

2

1.

Executive Summary

................................
................................
................................
......

5

1.1

Korean market size

................................
................................
................................
........

5

1.2


Key sectors

................................
................................
................................
...................

5

1.3


Key players

................................
................................
................................
...................

6

1.4

Market entry opportunities

................................
................................
.............................

6

2.

Industry Overviews

................................
................................
................................
........

8

2.2

Introduction

................................
................................
................................
..................

8

2.3

Regional Clusters

................................
................................
................................
...........

8

2.3

Strengths and weaknesses

................................
................................
.............................

9

3.

Market Sectors

................................
................................
................................
...........

12

3.1

Main sectors

................................
................................
................................
................

12

3.2

Biomedicine

................................
................................
................................
................

13

3.3

Environmental Biotech
nology

................................
................................
.......................

14

3.4

Bioinformatics

................................
................................
................................
..............

15

3.5

Nanobiotechnology

................................
................................
................................
....

16

4.

Market Growth

................................
................................
................................
...........

18

5.

Market Opportunities

................................
................................
................................
..

20

5.1

Sub
-
sectors and products

................................
................................
............................

20

5.2 Human Embryonic Stem Cell Culture
................................
................................
.................

22

6.

Market Barriers
................................
................................
................................
............

24

6.1

Non
-
Tariff barriers to potential market entrants

................................
..............................

24

6.2

Bioethics and Biosafety

................................
................................
................................

24

6.3

Complicated distribution channels

................................
................................
...............

24

6.4

Low awareness of Australian biotechnology

................................
................................
.

25

7.

Key Market Players and International Alli
ances
................................
.............................

26

7.1

Large players

................................
................................
................................
..............

26

7.2

Bio
-
ventures

................................
................................
................................
................

27

8.

Future Directions

................................
................................
................................
.........

30

8.1

Biomedicine

................................
................................
................................
................

30

8.2

Environmental
Biotechnology

................................
................................
.......................

30

8.3

Bioinformatics

................................
................................
................................
..............

31

8.4

Bioagriculture

................................
................................
................................
..............

31





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9.

Bibliography

................................
................................
................................
...............

34

10.

Appendix

................................
................................
................................
...................

35

10.1 Industry c
ontacts and associations

................................
................................
.................

35

10.2
List of companies and key contact

................................
................................
................

36

10.3 Listed private Companies

................................
................................
...............................

38

10.4
Biotech Companies Listed on KOSDAQ

................................
................................
...........

40

10.5
Biotechnology classification

................................
................................
..........................

41

10.6
Biotechnology industry classification

................................
................................
..............

43





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1.

Executive Summary

1.1

Korean market size



The Korean biotechnology industry’s output reached US$2.42 b
illion in 2004,
growing 35.7% annually in the
200
1
-
200
2

period and 16.3% in

200
4
. Korea’s
biotechnology industry accounted for 2.
6%

of the world market in 2004. Exports for
that year reached US$1.1 billion.



Although the
biotechnology
market is relatively
small at present, Korea aims to
increase its competitiveness to rank with the top seven countries in the field.
Biotechnology is one of the ten key industries selected by the Korean government
as

an

economic growth engine
.


1.2


Key sectors




The largest se
ctor is biomedi
cal

technology at 59.7%

of the total biotechnology
market
, followed by biofood at 13.1%. The other
key

biotechnology

sectors are
bioprocessing and machinery (8.9%), biochemicals (8.5%), bioenvironmental
technology (5.8%) and bioinforma
tics

(
3%).



The Korea Ministry of Commerce, Industry and Energy (MOCIE) has classified the
biotechnology industry i
nto 13

sectors (Please see the appendix for more details);


1.

Genetic engineering

2.

Protein engineering

3.

Other macromolecule engineering

4.

Cell and tissue

engineering

5.

System biology and bioinformatics

6.

Metabolic engineering

7.

Bioprocess

8.

Bioresource production and utilization

9.

Environmental biotechnology and bioenergy technology

10.

Nonobiotechnology

11.

Bioelectronics

12.

Biosafety and bioefficiency

13.

Other biotechnology



T
hi
s report
mainly
covers five sectors in
which
Western Australia

has competitive
advantages and business potential
.
They

are biomedical, environmental
biotechnology, agricultural biotechnology, bioinformatics, and
nanobiotechnology.





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B
iomed
ical,
biochemical,

bioprocessing and biofood

are four sectors with high
annual growth in the Korean market. These four sectors also have high research
funding and are in demand for research cooperation with more advanced
countries. WA companies in these sectors should be en
couraged to explore the
Korean market.

Korea is very advanced i
n the area
of stem cell culture and animal reproduction by
cloning technology. Korean scientists and research organizations are highly
-
sought
after by the U.S. and other countries for technolo
gy transaction and research
cooperation in these fields. The world market for stem cell culture for the biomedical
industry is potentially enormous at an estimated US$300 billion annually. Biotechnology
is a hot sector in the Korean stock market.


1.3


Ke
y players



Over 650 companies are operating in the biotechnology industry. The majority are
engaged in the development of medical and pharmaceutical products with
61%
of companies working on biopharmaceuticals and 39%
on non
-
biopharmaceuticals
.



Most of the

large key players are pharmaceutical companies or biofood
manufacturers. They include LG Life Science
,

Chongkundang,

CJ
, Samyang
Genex
, Daesang. There are also several hundreds small specialized venture
companies working on specific product development an
d research.



Government ministries are key players in important sectors that offer less
immediate potential for commercialization, such as the bioinformatics sector. The
Korean government is also a significant
supporter to

venture companies in
specialized
sectors that are seen as necessary to the overall biotechnology
industry.


1.4

Market entry opportunities



The Korean government places a priority on investments in three biotechnology
sectors:



Biomedical



Cell and gene remedies



Metabolism and enzyme engineeri
ng technology, processing technology



In order to promote the WA biotechnology industry, a dual approach to both the
Korean government and private companies is needed. Korea has a fairly low
awareness of the advanced strengths and capability of WA’s biotec
hnology
industry. Korean biotechnology companies, particularly in biomedicine, tend to




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look to the U.S.
A
, Japan and Europe for investment, research cooperation and
clinical testing.



More frequent attendance at exhibitions, trade shows, seminars, and active

information exchanges with biotechnology industry associations to promote WA
as an advanced and highly capable biotechnology industry should continue.



The Korea International Science & Laboratory Instruments Exhibition 2006
(ASSE/ANALAB 2006) will be hel
d in 27~29 June 2006. This is an exhibition devoted
to the field of high
-
tech analytical laboratory instruments, and showcases
biological scientific products and technologies. The exhibition center (KOTREX) is
located in the Daeduk R&D Special Zone, and is

an opportunity to track the latest
industry trends and develop new sales channels.



Overseas companies in Korea commonly use these market entry strategies:



License agreements:

The most common and lowest
-
risk. This requires a
partner who understands the pro
duct and market and has a well
-
established network.



Liaison office: Easy to set up, and a liaison office can do market research,
promotions, and liaise with government officers. However, a representative
office is not permitted to undertake trading in Kore
a.



FDI including joint ventures, M&A and Wholly Owned Foreign Enterprises
(WOFE): Joint ventures are one of the most common ways to enter Korea by
overseas companies. Recently, the WOFE approach has also increased.






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2.

Industry Overviews

2.2

Market Size

T
he Korea
n

biotechnology industry took off during the mid
-
1990s, growing to more than
600 biotechnology companies by the end of the decade, thanks to strong government
support and a biotechnology investment boom. The main R&D fields in Korea are
biomedical,

genetic materials, genetic therapy, DNA chips

and

histological technology
.
Major pharmaceutical corporations dominate the industry, along with smaller venture
capital supported businesses.

Measured by numbers alone, Korea’s biotechnology industry shows a

massive upswing
in the number of companies and scale of biotechnology investment. However, the
biotechnology industry in Korea lacks critical market mass and is short on certain
infrastructure and clinical test facilities. There is a general shortage of h
igh value
-
added
core technology in biotechnology research basics. Korea needs a global network to
overcome its current limitations in technology and personnel, and must focus on
international demand due to low domestic demand.

As of 2004, Korea’s biotechno
logy industry produced US$2.4 billion and exported US$1.1
billion with a world market share of 2.6%. In that year,
12,138 people

were working in
biotechnology industry
, 54.4% in R&D

and 45.6% in production.


Korean biotechnology industry overview
(2004)

P
roduction

US$2.4 billion

Percentage of GDP

0.5%

World Market Share

2.6%

Corporations

650

Employment

12,138

Exports

US$1.1 billion

Imports

US$673 million

Source: Ministry of Commerce, Industry and Energy, 2004 biotechnology industry statistics



2.3

Regional Clusters

Biotechnology centers are being developed across Korea in specialties determined by
their local characteristics. 16 biotechnology clusters have been fostered as innovation
clusters and serve as incubators for biotechnology companies
.









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2.3

Strengths and weaknesses

In the intensely competitive international race to biotechnology success, Korea is well
positioned in several sectors to become a world leader. Korea is using a ‘select and
focus’ strategy. The Korean government reco
gnizes the strategic importance of
biotechnology with strong policy support and official designation as a “high
-
tech core
industry of the 21
st

century”. Specific plans include an inbound biotechnology
investment promotion program for foreign companies and
an R&D complex for foreign
biotechnology companies exclusively.


Strengths

Korea has several significant competitive advantages in biotechnology:



Korea’s world
-
class IT infrastructure. High
-
speed information analysis for
screening and processing of incr
easing amounts of genetic information has
become crucial. IT capability is emerging as fundamental for faster production
and analysis of biotechnology data.





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Korea’s traditional strength in fermentation technology, giving Korea a
technological advantage th
rough related skills in recombinant DNA
technology, cell fusion and protein engineering.



Korea’s natural diversity of marine and land
-
based animal and plant resources
that support the development of the biotechnology industry.


Weaknesses



Korea’s local kn
owledge base remains weak. This knowledge base is essential
to the development of a strong bio
technology
, and can be gauged by the
number of patents and the number of genes recorded and preserved.



Few
Korean biotechnology companies have registered interna
tional patents,
and even fewer have established alliances with advanced global players on
patents. The patents and technologies already secured are still in a very early
phase of industrialization or commercialization.



Most of Korea
n

biotechnology venture
firms are not considered to be
commercially competitive. In 200
4
, there were over 650 biotechnology venture
companies in Korea. Most are small companies without viable business models.



There is inadequate local venture capital or funds focused on biotechno
logy,
creating a difficult funding environment for biotechnology start
-
ups.



Korea lacks clinical testing capacity, necessary for the largest sector,
biomedicine. It will be necessary to cooperate with advanced countries with
clinical testing capabilities t
o develop new drugs.

SWOT analysis of Korean biotechnology

Strengths

Weaknesses



World leading technology in animal
cloning and fermentation



Strong experience in development of
generic pharmaceutical products



Large pool of researchers in
biotechnology R&D



Strong experience in development of
new medicines, covering more than 20
years



Lack in experience in biotechnology
related businesses in the international
market.



Weak knowledge in basic science and
technology



Lack of expertise in genetic analysis
techno
logy



Lack of close cooperative programs for
industries and academic circles.





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Opportunities

Threats



Increasing awareness and interest from
both the public and government in the
biotechnology industry.



Targeting international markets for
Korea’s new formu
lations of drugs



Developing a large pool of bio
-
ventures
and good researchers



Convergence of internationally
competitive IT and chemical industries
with biotechnology



Strong support from government ministries
and local governments to bio
-
ventures
and proj
ect teams in academia and
business.



Emergence of China and India as cost
-
effective competitors for many
biotechnology products.



Reluctance of companies and investors to
aggressively invest in high
-
risk long
-
term
biotechnology.



High dependency on oversea
s countries
due to insufficient local clinical testing
capacity.



The entry and increasing influence of
multinational pharmaceutical companies
in the Korean market






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3.

Market Sectors

3.1

Main sectors

Korean companies produced US$2.4
2

billon biotechnology r
elated products in 2004.
Nearly half at 47% of total production, US$1.135 billion worth, was exported overseas,
and the remaining 53%, US$1.285 billion worth, was consumed domestically. Korea
imported US$673 million of biotechnology related products from o
verseas. This created
a positive total net market size of US$1.958 billion in 2004.

Biomedicine is the largest sub
-
sector in Korea, at 59.7%, followed by biofood with 13.1%.
The remaining significant sectors are bioprocessing and machinery (8.9%),
biochemi
cals (8.5%), bioenvironmental technology (5.8%) and bio
informatics

(3%).

Korea’s biotechnology industry is estimated to have imported about US$673 million
worth of biotechnology products in 2004. Most was biomedical products at 70%, with
bioprocessing pro
ducts and equipment making another 21% and biochemical
products 7%.


Korea exported about
US$1.13
5

billion of biotechnology products in the same year. The
top export items were biomedical products like lysine and amino acids, making 71% of
the total expor
t value.


Market size by sector
in 2004

(Units: US$ thousands, %)

Source: Ministry of Commerce, Industry and Energy, 2004 Biotechno
logy industry statistics



Production

Import

Net
total

MS%
(Net
Total)

Domestic

Export

Amount

%

Amount

%

Bio
medical

696,244

54.2%

276,832

24.4%

473,760

1,170,004

59.7%

Biochemical

117,964

9.2%

25,065

2.2
%

47,797

165,761

8.5%

Biofood

250,789

19.5%

805,284

71.0%

5,092

255,881

13.1%

Bio
e
nvironmental

111,573

8.7%

1,298

0.1%

2,000

113,573

5.8%

Bioelectronics

9,065

0.7%

7,087

0.6%

171

9,236

0.5%

Bioprocessing &
Machinery

33,448

2.6%

12,186

1.1%

141,542

174,
990

8.9%

Bio
e
nergy & resources

8,217

0.6%

674

0.1%

2,600

10,817

0.6%

Bio
informatics

58,122

4.5%

6,079

0.5%

15

58,137

3.0%

Total

1,285,422

100.0%

1,134,505

100.0%

672,977

1,958,399

100.0%





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3.2

Biomedicine

Initially, there were only a few biomedical players in Korea and the sector’s global
competitiveness was limited with low local patent developments forcing Korean
companies to license foreign patents. Korean pharmaceu
tical companies began to
focus on protein medicine, refinement and protein analysis to develop new medicines
for the domestic and international markets.
Biomedicine became the largest sector in
Korean biotechnology, both in the domestic and import markets.

It is the core sector
now, with two
-
thirds of the biotechnology industry and has a significantly higher growth
rate than that of the traditional pharmaceutical medicine industry.


The world protein medicine market is increasingly crowded as more companie
s race to
develop new drugs to met increased demand for a widening range of specific protein
medicines. Both government and the private sector have been eager invest more and
more into R&D to develop new drugs.


However, Korea’s
protein based medicine deve
lopment technology is still far behind
from those of advanced countries, especially in research and development of the
single clone antibody remedy. Protein medicine patents are still low. Biomedicine
is the
most important sector in Korean biotechnology, y
et in terms of market size, Korea’s
global presence is a paltry 1%.


While Korea’s 1% share is small, Korea has succeeded in development several
significant drugs through biotechnology. SK Chemical commercialized the drug
‘Sunpla’ to treat gastric cancer i
n 1999, the first biomedical drug development and
commercialization from a Korean company. SK Chemical’s success triggered a boom
in the biomedical sector. Other Korean biotechnology firms and pharmaceutical
companies went on to successfully release 11 new

or improved drugs in the next four
years. Korean companies expanded their market for these locally developed drugs by
obtaining approvals from foreign regulatory body. For example, LG Life Science
obtained FDA approval for the U.S. market for its new
drug

‘Factive’

in 2003. However,
the sales volume for these new or improved Korean drugs is limited due to a lack of
marketing experience in foreign markets.






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Korea Food & Drug Administration’s
approval of new medicines
(by end of 2003)

Product name

Company

Target diseases

Date of
approval
(y/m/d)

Applied Technology

Sunpla

SK
Chemical

Gastric cancer

1999.07.14

Platinum
-
based
molecular compounds

Kondron

Cellontec

Knee cartilage
cell regeneration

2001.01.30

Bioengineering

EGF external
liquid

Daewoong

Diab
etic foot
ulcers

2001.05.30

Bioengineering

Joins tablets

SK
Chemical

Arthritis

2001.07.05

Improving existing
compounds

Millican

Dongwha
Pharmaceutical

Liver cancer

2001.07.06

Radio therapeutics

Quroxin

Choongwoi
Pharmaceutical

Urinary tract
infection

2001.12.17

Antifungal

Factive

LG

Life Science


Respiratory organ
inflammation

2002.12.27

Antifungal

Aphytocine

Gujoo
Pharmaceutical

Arthritis

2003.05.03

Crude drugs

Pseudo
vacine

CJ

Pseudomonas
aeruginosa

2003.05.28

Vaccine

Camptobel

Chongkundang

Ov
arian cancer,
cell lung cancer

2003.10.06

Camptothecin, an
antitumor alkaloid

Source: Korea Food & Drug Administration



3.3

Environmental Biotechnology

The environmental biotechnology sector made up just 4.4% (US$92 million) of Korea’s
biotechnology indu
stry in 2004. Environmental biotechnology imports were even lower,
at 0.04% (US$210,000) of the total biotechnology imports for 2004. An estimated 74
companies are working in this sector. Environmental biotechnology is also a low
investment priority compar
ed to other ‘hot’ biotechnology sectors like biomedicine
and bioinformatics.


The Korean government has identified 18 key technologies and processes in this sector.
Water pollution control and water purification are considered the most important of
them, a
nd are in active R&D. The Korean government is keen to use micro
-
organisms to
solve environmental problems. In 2002, the Ministry of Environment organized a task
force to create a government funding program in R&D on contamination clearance.
With governmen
t support, the Korea Research Institute of Bioscience and
Biotechnology’s environmental biotechnology teams found the genetic mechanism for




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the sulfuric acid enzyme from sweet potatoes. Professor Yeong Suk Lee of Pohang
University of Science and Technology

(POSTECH) also reported on the mechanism of
heavy metal absorbance using yeast cells.


Environmental biotechnology technologies and processes

Clean technology

Process
-
related clean technology

Biological agrochemicals development

Bio
-
degradable materi
al production

Bio
-
based solvent technology

Environmental pollution control and

management technology

Air pollution control and processing

Water pollution control and processing

Soil pollution control and remediation

Waste processing

Environmenta
l measurement and analysis

Environmental assessment and control

Ecosystem restoration

Bio
-
energy technology

Bio
-
ethanol production I (Starch biomass)

Bio
-
ethanol production II (Lignocelluloses biomass)

Bio
-
diesel production

Bio
-
gas production

Bio
-
gas utilization

Bio
-
hydrogen production

Environmental Biotechnology

Source: Agency for Technology and Standards, 2004



3.4

B
ioinformatics

Bioinformatics tackles one of the most formidable challenges in science today, the
analysis of massive amoun
ts of data generated by biotechnology’s powerful new
research tools and techniques. Through bioinformatics, researchers can use ICT like
statistical solutions, graphical simulations, databases and analysis algorithms, to
organize, access, process, integrat
e and analyze data from multiple sources.
Bioinformatics is crucial to biotechnology.
However, t
he sector had a low level of
public awareness and investment in Korea until early 2000
.




The Korean government realized the importance of bioinformatics and b
egan
supporting this sector from 2001 onwards. The National Genome Information Center
(
http://www.ngic.re.kr
), with
staff

strength of 54 people, has been designated as the
national organization responsible for this se
ctor. The government also encouraged
several research centers such as ETRI and KISTI’s CCBB to form active cooperative
networks among government research organizations.






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This government
-
driven networking harvested some results in 2005. The Institutes of

Biotechnology and Information Technology (BIT) launched a consortium during the
"2005 international conference on Bioinformatics" held in September 2005 in Busan,
Korea. The founding members of the BIT Institutes Consortium are:


-
National Genome Research

Institute (NGRI)


-
National Agricultural Biotechnology Information Center (NABIC)


-
National Livestock Research Institute (NLRI)


-
Korea Basic Science Institute (KBSI)


-
Korea Research Institute of Bioscience and Biotechnology (KRIBB)


-
Electronics and Te
lecommunications Research Institute (ETRI)


-
Korea Society for Bioinformatics (KSBI)


-
Korea Institute of Science and Technology Information (KISTI)


The consortium’s aims are to establish an information network, support research
activities, avoid duplicat
e efforts, and facilitate the exchange of technology,
specialists and databases among member institutes. Dr. Young Hwa Cho was elected
Chairman of the Consortium.


A similar effort has been seen in private companies such as ISTECH (www.istech21.com),
OITE
K (www. oitek.com) and Smallsoft (www.smallsoft.co.kr). ISTECH, focusing on
bioinformatics, was incorporated in June 2000 in Korea with investments by four major
Korean investment companies. ISTECH has developed patented data mining
technologies for knowle
dge discovery from biological data towards utilizing genomics
and proteomics data for accelerating the drug discovery pipeline. ISTECH provides
integrated bioinformatics solutions for pharmaceutical companies in Korea. The
company leads the research collab
oration of major hospitals and national research
institutes in Korea into expanding the commercialization of molecular medicine and
systems biology.



3.5

Nanobiotechnology

Nanobiotechnology has attracted increasing interest during the past decade,
particu
larly in the fields of medicine, drug discovery and pharmacology. This area of
research has opened up new perspectives in analytics and therapy.
Nanobiotechnology is an interdisciplinary field based on the cooperative work of
biologists, chemists, physicis
ts, engineers, and medical doctors. Currently, the R&D
expenditure for nanobiotechnology in Korea accounts for only 5% of the government’s
biotechnology investment, as nanobiotechnology is in its early stage in Korea. The
government funding priorities in n
anobiotechnology are:

1) Diagnosis

2) Nanoscale control technology

3) Therapy





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4) Cancer research


Of the eight science
-
related ministries, the Ministry of Science and Technology (MOST) is
the biggest nanobiotechnology investor in R&D, followed by the Min
istry of Commerce,
Industry and Energy (MOCIE). In Korea, MOST is generally responsible for fostering R&D
in the basic sciences and the key foundation technologies for future biotech and
nanotech, while MOCIE focuses more on R&D towards industrial applicat
ions. The field
of nanobiotechnology is still in an emerging phase, and major applications of current
research will not be commercialized in this decade. This makes government ministries
the key driving forces in developing nanobiotechnology in Korea, as t
he private sector
is reluctant to invest in this mid
-
to
-
long term technology.





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4.

Market Growth

Korea's
domestic

biotechnology industry
generated

US$2.4 billion in 2004, up from
US$
2
.
1

billion in 200
3
, according to the Korea Institute for Industrial Econom
y and Trade
(KIET). The industry has recorded strong growth rates higher than 25% in the past few
years, with a 35.7% boom in 2001
-
2002 that

slowed to
9.8% and
16.
4
% in
2003 and in
2004.

Biotechnology market size (Unit: US$ million
)

0
500
1,000
1,500
2,000
2,500
2002
2003
2004
Production
Import
Export
Net Demand

Source: The Ministry of Commerce, Industry and Energy, 2004 bio
technology
industry statistics


Despite this high annual growth, Korea’s current global position in biotechnology is only
14
th

in the world
with a 2.6% share of the world market,
and Kor
ea’s local knowledge
base remains weak.


To promote Korea’s biotechnology industry, the
Korean government implemented a
master plan for biotechnology growth through a range of support programs. The
master plan targets market expansion to from US$2.4 billi
on in 2004 to US$6 billion by
year 2010.




Year


Production


Import


Export


Net Demand


2002


1,893


449


920


1,422


2003


2,079


513


994


1
,598


2004


2,420


673


1,135


1,958





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Korean biotechnology industry forecast


2003

2010

Competitiveness

14th in the World


7th in the world

Investment

US$530 million of total
governmental R&D investment
per year

US$786 million of total governmental

R&D investment per year

R&D Capability

60% compared to advanced
countries

85% compared to Advanced countries

Basic science: 14th of the
world

Basic science: 7th of the world

Bioprocessing: 70% compared
to advanced countries

Bioprocessing: 90% compa
red to
advanced countries

New materials: 40% compared
to advanced countries

New materials: 70% compared to
advanced countries

Industry

Bio
-
venture industry: Birth

Bio
-
venture industry: Early maturity

2.6% of the world market

10% of the world market

Employees: 11,013

Employees: 70,000

Source: Ministry of Commerce, Industry and Energy





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5.

Market Opportunities

5.1

Sub
-
sectors and products

Inline with global trends, the
public and private sectors are increasing investments in
the biotechnology industry.
However, there are five significant characteristics of
biotechnology that pose limiting factors on investors:



Long
-
term horizon on investment returns



High
-
risk for high
-
returns





Government regulations

due to ethical issues.



Global players’ scale of econ
omy



Basic technology requirement that is weak in Korea


To counteract these, the Korean government set investment priorities on specific
segments of the biotechnology industry:

(1) Priority sector: Biomedical industry



Modified new medicine
: structure
-
mod
ified new medicines



Original
new medicine:
diabetic/corpulence remedy, immunity
function controlling, cerebral paralysis



Creative
new medicine: new enzyme and acceptor

(2) Priority market: Cell remedy, gene remedy

(3)Priority technology: Metabolism enginee
ring technology, enzyme engineering
technology


The Ministry of Commerce, Industry and Energy (MOCIE) plans to invest US$2 billion over
the next 10 years or US$200 million annually on biotechnology R&D and infrastructure. In
2005, MOCIE invested US$189 mil
lion on biotechnology, divided into US$80 million on
R&D and US$109 million on infrastructure. In addition to MOCIE’s support, the Korean
government invested a total of US$730 million annually in the industry.


Korea also has several world
-
class competit
ive biotechnology products with high
potential for research co
-
operation and development with Australian companies. The
Ministry of Commerce, Industry and Energy
short listed

the 15 best Korean
biotechnology products that had ranked in the top five by worl
d market share in 2004.







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Shortlist of top
-
ranked Korean biotechnology products


No.

Product

Manufacturing
company


Competing country/
company


1

Animal growth hormone



LG life science


USA, Monsanto


2


Lysine (Amino acid)


CJ, Korean Basf


Japan, Aji
nomoto


3

Remedy cell for cell

replacement
therapy

Maria Biotech,

AG Korea


USA, Britain


4


Nucleic acid (food additive)


CJ, Daesang


Japan, Ajinomoto


5


Colzero (Functional food)


Eugene Science


USA, J&J


6


Hepatics B vaccine


Green Cross Vaccine
,
LG life science


Belgium, GSK and

USA, Merck


7


Medical operation material


Hans Biomed


USA, Life Cell


8


Ferment

machine


Ko Biotech


USA, NBS and

Germany, Braun


9

AIDS diagnosis kit


SD


USA, Abbott


10


Threonine

(Amino acid)

CJ


Germany, Degu
ssa and

Japan, Ajinomoto


11


Lactobacillus

Powder

Cell biotech


Denmark, Christian Hansen


12


Autologous Bone
-
cell Therapy

Cellontech


-


13


Chlorella

CJ


Japan, Taiwan


14


Combining gene in large
quantity


Bionia, Genotech,
Cosmo gene tech


USA,
Sigma
-
Genosys,

Germany, MWG, and

France, Genset


15


Potassium Clavulanate


Chongeundang Bio


Britain, GSK,

Austria, Sandoz, and

the Netherlands, DSM

Source: Ministry of Commerce, Industry and Energy (2004)


The Ministry of Agriculture and Forestry inv
ested US$79.2 million in 2005 to develop
animal organs that can be transplanted into humans. Korean academic and
corporate research output has reached world
-
class levels in human and animal
cloning and transplantations. The major achievements are listed be
low:







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Clone animal production (2003
-
2005)

Clone animal

Transformation process

Year

Research institution

Pig

Somatic cell cloning which
produce
gene of hematopoietic stem cell
(EPO)

2003

Kyungsang
University

Cat

Transplant a male somatic cell to an
egg

cell

2004

Sooncheon
University

Dog (SNUPPY)

Transplant a male somatic cell to an
egg cell

2005

Seoul National
University

Mice

Fertilization only with an egg cell
without sperm

2004

Macrozen

Source
:

Korea Research Institute of Bioscience and Biotechnology (KRIBB)



5.2 Human Embryonic Stem Cell Culture

Well
-
known Korean scientist, Dr Woo Suk Hwang, is at the center of a controversy over
his work in human embryonic stem cell development
and embryo cloning for animal
replication. The implications of this controversy have not been fully realized, and WA
companies entering the Korean biotechnology marketplace need to fully understand
the various opinions and outcomes of the Dr Hwang case.


D
r Hwang came to world attention for his work on stem cells and animal cloning. He
published several articles in the prestigious journal ‘Science’ with Gerald Schatten from
the University of Pittsburgh. Claims of ethical breaches in egg donations were made
in
November 2005, followed by allegations of fraud and conspiracy for Dr Woo and his
team. He is under investigation by the Korean government and has left his post at Seoul
National University.


Dr Hwang's work is a source of considerable pride in Korea as

he helped put Korea at
the forefront of the highly competitive biotechnology industry. There is widespread
public support for Dr Hwang, both in the general public and in the biotechnology
industry.


One view is that Dr Hwang is the victim of a conspiracy
by Korean and international
biotechnology and medical companies who are seeking his patents and work. Human
embryonic stem cell development is potentially highly lucrative with an estimated
US$300 billion annual market. Dr Hwang’s supporters point to the c
omplicated behind
-
the
-
scenes politics and business dealings in Korea that can prejudice government
investigations like the public prosecutor’s case against Dr Hwang.


Dr Hwang’s research is ethically controversial like much cutting
-
edge biotechnology
work.

Korea is a multi
-
religious society with large Buddhist and Christian (including




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Catholics) minorities. Korean Catholic groups have criticized Dr Hwang’s work on
human embryo duplication and animal cloning, while Korean Buddhist groups continue
to support
his work as potentially life
-
saving medical treatments. Chogyejong, the
largest Buddhist group in Korea, announced in March 2006 that it would raise US$60
million in research funds for Dr Hwang and his research associates.


It is not clear yet what the out
come of the controversy will be for Dr Hwang. He may or
may not continue his research in Korea, and is said to be considering moving his team
of more than 50 researchers to an overseas research organization. Industry observers
say that the current politica
l situation will probably prevent further work by Dr Hwang in
Korea. Supporters of Dr Hwang believe this indicates the behind the scenes blacklisting
and framing of Dr Hwang by commercial, political and academic opponents.


All sides agree that Dr Hwang di
d succeed in cloning ‘Snuppy’, the first cloned dog in
the world, produced by somatic cell reproduction processing by Dr Hwang and his
colleague, Dr Lee, at Seoul National University. ‘Snuppy’ was named the best product
of 2005 by the well
-
known science jo
urnal, Nature.


WA investors should be cautious with reports and conversations on Dr Hwang’s case,
with rumors and allegations reported as factual by opposing sides. Korean nationalism
and patriotism is significant in the Dr Hwang case, and foreign involve
ment in the
situation is viewed with concern.


The WA government should objectively investigate Dr Hwang’s case in
-
depth to
evaluate his team's achievements and the charges against them, in order to assess the
potential gain for WA in research cooperation
with Dr Hwang’s team.





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6.

Market Barriers

6.1

Non
-
Tariff barriers to potential market entrants


Healthcare products, including pharmaceuticals, medical equipment and processed
food products, are subject to a number of legal and regulatory requirements in K
orea.
These are overseen by the Korea Food and Drug Administration (KFDA) and its sub
-
agencies.

Over the past decade, the Korean government has moved to adapt its local
regulatory system to international standards and practices. However, some exporters
sa
y that non
-
tariff barriers remain in several areas like type approval for medical
equipment, excessive documentation requirements in registration procedures, and
discriminatory practices regarding certain medical devices under the Korean health
insurance r
eimbursement scheme. Non
-
tariff barriers on lab equipment and instruments
are relatively low, except for some general type approval requirements.


6.2

Bioethics and Biosafety

Korea’s Act on Bioethics & Biosafety (2004)

bans

human cloning, cross
-
species

ex
periments

and
allows research for therapeutic purpose on

frozen eggs that are
unused from fertility treatment,

and somatic cells nuclear transfers
. In 2001,
Korea
ratified the Act on Cross
-
border Movement of Living Modified Organisms to implement
the Carta
gena Protocol on the Convention on Biological Diversity, requiring safety
checks and government authorization for the manufacture of GMOs.
Labels for
genetically modified organisms

have been required since 2001 and are less popular
with Korean c
ustomers

al
though Korea’s international agricultural product imports
(mainly from the U.S.) contain a substantial percentage of GMO crops and foods.


6.3

C
omplicated distribution channel
s

Korean pharmaceutical companies largely focus on the distribution of imported
medicines rather than R&D. Other advanced countries’ pharmaceutical companies
have a comparative advantage over Korea for R&D, but Korean pharmaceutical
companies have a longer history and advantage in distribution channels.


The complicated distribution
channels in Korea’s biomedical industry appear to
present a formidable barrier to foreign companies entering the market. Korean
companies have their own domestic distribution channels to hospitals, pharmacies and
wholesalers, so foreign pharmaceutical comp
anies should ally with local companies to
use their extensive distribution networks.





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6.4

Low awareness of Australian biotechnology

Australia has a low level of awareness in Korea as a biotechnology industry investment
partner. In spite of its high level
of biotechnology, Australia has not yet been
recognized as an important partner to Korea. Australia has a record of strong
international alliances in the biotechnology industry. More than 70% of Australian
biotechnology organizations have engaged in intern
ational alliances. The record and
experience in these international alliances will give good references for similar alliances
with Korean partners.





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7.

Key Market Players and International Alliances

7.1

L
arge players

Korea’s biotechnology industry is domina
ted by large pharmaceutical corporations
and small venture companies. Several Korean corporations, including LG Life Science,
Chongkundang, CJ, Samyang Genex and Daesang, have recognized the potential
growth in biotechnology and made significant investment
s in biotechnology and
manufacturing biotech
-
related products. Recently, companies in industries related to
biotechnology, such as food and chemical companies, have
also s
tarted investing in
the biotechnology sector.

Profiles of leading companies are as f
ollows:

LG Life Science

(LGLS) used to be a department of LGCI but spun off as an
independent entity in 2002. LGLS began research in genetic engineering in 1981 as part
of LGCI and has invested steadily since in the life sciences. LGCI focuses on three ar
eas,
pharmaceuticals, animal health and specialty chemicals. LGLS developed and
commercialized an array of pharmaceuticals over the years, including interferon in
1989 (Intermax
-
gamma) and 1992 (Intermax
-
alpha), a hepatitis B vaccine in 1992
(EUVAX B™), hu
man growth hormones in 1993 (EUTROPIN™) and a degenerative
arthritis treatment in 2005 (HYRUAN Plus™). LGLS Science got FDA approval in the U.S.
for its next
-
generation quinolone antibiotic (FACTIVE®). LGLS has formed diverse
partnerships to boost its capa
bility to market its own products inside and outside Korea
and to develop global new drugs.


LGLS is interested in these areas:



Cardiovascular system disorders like hypertension, hyperlipidemia,
anticoagulants etc.



Metabolic diseases like diabetes, obesi
ty etc.



Musculoskeletal system disorders like osteoporosis, osteoarthritis etc.



Central nervous system disorders like depression, schizophrenia, Alzheimer's
disease etc.



Vaccines



Cancer treatments like hormonal treatments, cytotoxic agents, other cance
r
therapeutics with novel approaches



New drug delivery technologies, novel validated targets, and other new areas.


LGLS is primarily looking for business opportunities in new drug products, as well as drug
candidates that are post
-
Phase II clinical tria
ls, in the target areas listed above. LGLS is
also interested in breakthrough platform technologies for new drug development. To
evaluate partnership opportunities, LDLS prefers email enquiries of basic non
-




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confidential information on proposed products or
technologies to business@lgls.co.kr.


Korea Green Cross Corporation

has successfully industrialized a liver inflammation
vaccine, interferon

alpha, G
-
CSF, and human growth hormone, and participated in
establishing medical processes for them. The company co
mpleted clinical testing of its
Genetic recombining Factor VIII, a hemophilia remedy and is now in clinical testing for
a humanized antibody to cure Hepatitis B.


Chong Kun Dang Bio

(CKD Bio) was spun
-
off from CKD Pharmaceutical in November
2001. CKD Bio g
ot FDA approval in the U.S. for Cefuroxime Acid in 2003 and has filed a
Drug Master File for Potassium Clavulanate with the U.S. FDA. CKD Bio also obtained
KFDA approval in 2003 for Camtobell Institute for the treatments of small cell lung
cancer and ovar
ian cancer.


Daewoong
Pharmaceutical

developed and sells a biotech treatment
for diabetic foot
ulcers, a decade
-
long US$8 million investment.

The ‘
EGF external liquid’ is expected to
treat several conditions such as burns or bedsores. It approved for med
ical use in
Jordan in late 2004, and has since been approved by other Middle East countries.
Daewoong Pharmaceutical has also expanded its overseas business into the Asia
-
Pacific market.


CJ Corporation
began biotechnology production as far back as the 19
60s with nucleic
acid and monosodium glutamate in the 1960s, launching a pharmaceuticals business
in 1984. The bio
-
pharmaceutical division has extended its product range to include
finished medicines, bulk pharmaceuticals and amino acids. The Bio Division
manufactures lysine for animal feed, monosodium glutamate and nucleotide
derivative seasonings. CJ also launched Threonine, a feed additive, in 2001. CJ Corp
has developed a hepatitis vaccine Hepaccine and an intermediate for making
antibiotics, 7
-
Amino ce
phalosporanic acid, in 1990.


7.2

Bio
-
ventures

There were 650 bio
-
ventures, biotechnology start
-
ups that qualify for government
funding, in 2005, a sharp jump from just 200 five years earlier in 2000. Government and
private investments are promoting the d
evelopment of bioventures’ specific
technologies towards commercialization.


Through the government
-
sponsored Korea Bio Venture Association, many Korean bio
-
venture companies in the biomedic
al
, biofood, bioenvironment and bioagriculture
sub
-
sectors have f
ormed technology alliances, product export deals and secured
corporate investments from international companies in the U.S., Japan and Britain. The
Korean companies include Scigenic, Bio Angel, Genoprot, Bioneer, Crystal Genomics,
Sunbio, Cell Biotech, Gre
en Biotech, Eugene Science, C
-
TRI, Biomed Lab, Proteogen,




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Aprogen, Neopharm, Miztec, Macrogen, Nexgen, Standardia Diagnostics, ToolGen,
lmagene and Bio Korea.


Foreign investment in Korean biotechnology companies

Company

Investor

Amount

Business

Celltrion

Vaxgen U.S. (Genetech
subsidiary)

US$30 million

AIDS vaccine manufacture

Eugene
Science

Meiji Confectionary,
Japan

US$3 million


Eugene
Science

H&Q, U.S.

US$4.8 million


Anterogen

Tainippon, Japan

US$1 million

Development of heart muscle
regeneration t
echnology using
stem cells isolated from bone
marrow

DNA Link

Orchid, U.S.

US$1 million

Single Nucleotide Polymorphism
(SNP) research

PaxBiogen

Chiyon, Khikawa Hung
San, Japan

US$1.6 million

Diagnosis kit and treatment for
allergies, food supplement
manu
facturing and sales

YiroMed

Takara Shuzo, Japan

US$6 million


Baim
Laboratories

Ino
-
Venture, Canada

US$0.9 million

Medical cosmetics for acne

S
ource: Korea Investment Service Center, “Korea’s New Growth Engine


A Profile of Korean
Bioindustry (2004)”


Celltrion
(www.celltrion.com)

In early 2002, a California
-
based biotechnology
company VaxGen and a group of Korean partners founded what would become the
largest OEM biopharmaceutical contract manufactur
er in Asia. South Korea was
selected for its strategic location, access to growing pharmaceutical markets in the
region, established local infrastructure and competitive economics. Celltrion is
designed to support the manufacture of a wide variety of prote
in
-
based therapeutics,
including monoclonal antibodies.


Eugene Science
(www.eugene21.com)
Eugene Science produces the cholesterol
-
lowering food additive, "Cholzero." The compa
ny plans to concentrate on reducing
and preventing high levels of cholesterol, obesity and diabetes through
pharmacogenomics, the science of custom
-
tailoring diet, medication and gene
therapy according to genetic information derived from blood analysis. Eu
gene
Science attracted an investment of US$6 million from a U.S. bio
-
technology venture
fund and a further US$3 million in investment from Meiji Confectionary to expand its
Cholzero production facilities.





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Anterogen (www.anterogen.com)
Anterogen is dedicat
ed to commercializing its
proprietary heart muscle cell regeneration technology. The company has succeeded
in developing a technology to convert mesenchymal stem cells collected from bone
marrow into heart myoblasts. These are then injected into the heart
along with dead
muscle cells to regenerate heart muscle and so combat heart disease. Anterogen has
discovered the growth factors and the environment in which stem cells can separate
from bone marrow and grow into myoblasts. Anterogen also secured US$1 mil
lion in
investment from Japan’s Tainippon in return for an option to produce and market
Anterogen's products and technology in Japan once commercialized.


DNA Link (
www.dnalink.com
)

DNA Link, founded in 2001, is a medical genetics research
company focused on the study of genetic variations, especially on Single Nucleotide
Polymorphism (SNP) and the development of new generation anti
-
cancer drugs. Its
business can be divided into th
ree areas, identifying the genes related to common
diseases and developing new drugs and screening reagents to target them,
developing genetic resources and information to further pharmacogenetic research
and discovering potential new drugs by use of high
-
throughput screening technology.

Orchid Biosciences, a U.S. firm specializing in R&D on single nucleotide polymorphisms
(SNPs), invested US$1 million in DNA Link. The
two companies also formed a technology
cooperation agreement to make inroads into the Ja
panese and Asian markets as well
as the Korean SNP market.






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8.

Future Directions

Korea is aggressively pushing biotechnology innovation by building strong R&D
networks across industries and research and academic institutes. The active support
and involveme
nt of government ministries in the biotechnology industry open the door
for foreign government partnerships.

Current government ministry programs:



The Ministry of Science & Technology: The Master Development Plan for the
Bioengineering Industry



The Minis
try of Health and Welfare: The Public Health Care Promotion Plan



The Ministry of Commerce, Industry and Energy: The Biotechnology Industry as a
Core Industry in the 21
st

Century



8.1

Biomedicine

Korea is a world leader in the fields of
animal embryo cell
cloning and human stem cell
development with many published research papers and cloned animals. Although the
recent controversy over Dr. Woo Suk Hwang’s research has presented difficulties, the
Korean government is still supportive of somatic stem
-
cell dev
elopment and animal
replication. The WA livestock industry and related research organizations should
conduct a more in
-
depth study on the benefits and impact of an alliance with the
Korean research team of animal embryo cell cloning replication at Seoul Na
tional
University in Seoul Korea.


8.2

Environmental Biotechnology

Environmental biotechnology is still its infancy but it is an emerging sector for Korea.
There is a need for more advanced technology in cooperation with foreign research
organizations. Bi
o
-
remediation, using natural processes to clean up harmful chemicals
in the environment, is the most promising sector in environmental biotechnology. The
environmental biotechnology team of the Korea Research Institute of Bioscience and
Biotechnology (KRIB
B) and Pohang University of Science and Technology (POSTECH) is
looking for research alliances with research organizations in other countries in
decontamination technology using micro
-
organisms and plants. Australia’s advanced
phytoremediation technology h
as high potential for WA companies looking to enter
Korean environment market through collaboration with Korean organizations.






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8.3

Bioinformatics

Bioinformatics is another emerging sector in Korean biotechnology. This sector requires
international networ
king to build databases and share information in the field. To do so,
the OECD Megascience Forum Subgroup for Biodiversity Information of the Working
Group on Biological Informatics launched the Global Biodiversity Information Facilities
(GBIF) to make the

world’s biodiversity information freely and openly available via the
Internet. GBIF focuses especially on sharing primary scientific biodiversity data for
scientific and social research. GBIF’s members are government, economic and
international organizat
ions.


The Korean Biodiversity Information Facility (KBIF), the Korean node of GBIF, has
operated since 2001 with support of the Ministry of Science and Technology. KBIF's main
mission is to establish a Korean biodiversity data network so domestic biodive
rsity data
can be freely and widely accessed on the Internet, and to serve as an international
information gateway for Korean biodiversity data. As a Voting Participant of GBIF, KBIF
actively participates in Governing Board and Node Managers Committee of G
BIF and
contributes services on the GBIF Data Portal in Asian region cooperating GBIF
Secretariat. Korean Institute of Science, Technology and Information was nominated as
Asian Data Service Technology Alliance Institute by GBIF in April 2005.


8.4

Bioagr
iculture

The Rural Development Administration (RDA) is the central government organization
responsible for extensive agricultural research and services in Korea. This organization
conducts research in genetically modified crops, studying 18 crops and 45 sp
ecies as
of the end of 2005. Among them, 9 crops and 23 species have been verified by their
genetic functions, and four crops were assessed for their GMO safety.






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Status of
genetically
-
modified crop research by The Rural Development Administration

Crops

Function

Status (2005)

Confirmation of
genetic function

Assessment of safety

Rice

Enhancing
photosynthesis

V


Adding Lysine

V


Herbicide resistance

V


Nolidae
resistance

V


R
ice insect
resistance

V


Rice virus resistance

V


Weed
-
killer

(Ba
sta)
resistance


V

Pepper

Weed
-
killer

(Basta)
resistance


V

Lettuce

Controlling starch

V


Potato

Resistance in havoc

V


Enhancing iron

V


Weed
-
killer

(Basta)
resistance

V


Disease tolerance

V


Bacterium resistance

V


Virus resistance


V

Chine
se
Cabbage

Tineidae

V


Male sterility

V


Cabbage

Male sterility

V


Tomato

Resistance in virus

V


Sesame

Weed
-
killer

(Basta)
resistance


V

Enhancing vitamin E

V


Gourds

Weed
-
killer

(Basta)
resistance

V


Promoting calcium ion digestion

V


Source:
The Rural Development Administration (2005)


The bioagriculture research priorities in Korea are:



Developing drought
-
tolerant transgenic plants



Understanding the water stress mechanism in organisms



Structural analysis of toxin genes



Developing transgenic

plants with clusters of disease
-
resistant genes



Increasing the expression of insecticidal genes by chloroplast transformation



Practicing molecular techniques in conventional breeding programs



Identifying and characterizing advantageous genes



Extending
genome research to other major crops, like peppers,



Developing integrated genetic information and worldwide networking via the
Internet



Isolating useful genes





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Enhancing genetic transformation efficiency and establishing stable gene
expression system



Dev
eloping F1 hybrid seeds production in major crops via biotechnology


The present generation of agricultural biotechnology research focuses on developing
traits like insect resistance. The next generation will focus on improved nutrition,
processing qualiti
es and higher value
-
added crops.







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9.

Bibliography



Bioindustry in Korea March 2006
,
Korea Bioventure Association

by
President Jong
-
Sei Park,
PhD.




Korea Bioindustry
W
hite
B
ook 2005
,

Korea Re
search Institute of Bioscience and
Biotechnology (KRIBB)




Korea Biotechnology
S
tatistics
,

Korea Research Institute of Bioscience and
Biotechnology (KRIBB)



Korea Bioindustry statistics 200
4
,

Korea Bio
-
technology Research Association



Korean Biomedical
I
ndustry Overseas Fair presentation
,

February
2006
, Korea Equity
Research




Australian Bioindustry
R
eport
, May

2002
,
KOTRA



Bioindustry overview, global trend
s

and domestic market
,

November
2003
,

Samsung
Economy
R
esearch
I
nstitute



Emerging bio market
,
May
2003,
USA
T
rade,
Department of Commerce



Summary of Korean Bioindustry
,

October
2003,
USA
T
rade
,

Department of Commerce



Korea’s New Growth Engine
-

A Profile on the Korean Bioindustr
y
,

2004
,

Korea

Investment
Service Center




2015
Bioindustr
y future vision and
development

strategy
, November 2005, Ministry

of
Commerce, Industry and Energy




Global Partners: Australian Biotechnology 2004
,
Australian
government’s

Department of
Industry, Tourism, and
R
eso
urces




The
L
atest
T
rend of Korean Bioindustry
,

2005
,

Korea Biotechnology Research Association




Korean Intellectual
P
roperty
R
ight
Strategies
,
November 2005
, Korean

Intellectual

Property

Office




Investment
G
uide
to

Korean Bioindustry
,

March 2006
,

www.investment
k
orea.org





Biomedical industry report
,

2004
,

Ministry of Commerce, Industry and Energy






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10.

Appendix

10.1

Industry contacts and associations

The following organizations can provide assistan
ce to foreign enterprises seeking to invest in or
otherwise partner within the Korean biotechnology industry.


Korea Biotechnoloqv Research Association (
www.kbra.or.kr
)



Recognizing the impact of biotechnology worldwi
de, in 1982 an association of private
research institutes formed the Korea Biotechnology Research Association (KBRA) to
pursue effective R&D activities and promote the commercialization of biotechnology.




The association promotes cooperative research among

its members and shares
biotechnology industry developments and market trends.




The KBRA also undertakes tasks commissioned by the government or public
organizations. KBRA makes recommendations to the government on promoting the
biotechnology industry.



Korea Bio Venture Association (
www.kobioven.or.kr
)



The Korea Bio Venture Association (KoBioVen) formed in July 2000 to address problems
common to the country's biotechnology venture companies.




KoBioVen is a foru
m to exchange information, support technological developments and
commercialization, so as to enhance the general level of Korean expertise in
biotechnology. Through these efforts, KoBioVen aims to strengthen Korea’s international
competitiveness and econo
mic contributions. The association organizes seminars to
assist members on patents and KOSDAQ listings. KoBioVen has organized international
marketing missions.



Korea Investment Service Center (
www.kisc.orq
)



The Kor
ea lnvestment Service Center (KISC) is an arm of the Korea Trade

&
lnvestment
Promotion Agency. KISC assists foreign corporations in locating to Korea, with a full suite
of investor
-
related services from market research to partner searches, company
registr
ation by proxy to plant location.




The Center also operates the Office of the lnvestment Ombudsman to assist foreign
investors in resolving any problems they may encounter in the course of doing business
in Korea.




Based in KOTRA's head offices in Seoul,
KlSC provides services and liaises with foreign
business through KOTRA's worldwide network of 99 branch offices.






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10.2

List of companies and key contact

Government Ministry


The Ministry of Commerce, Industry and Energy (MOCIE)



To develop and advance the industrial process



To develop and commercialize production technologies in the
industry



To establish a comprehensive development plan for the industry




The Ministry of Science and Technology (MOST)



To develop basic and cutting
-
edge technologies



To support R&D activity related to the utilization and p
reservation of
genes




The Ministry of Health and Welfare (MOHW)



To promote R&D activities related to healthcare and food safety



To foster clinical te
sts and related R&D activity




The Korea Food and Drug Agency (KFDA)



To establish forward
-
looking, and preventative food and drug
oversight systems



To

implement regulations on bio
-
medicine and bio
-
food






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Research Institutes


Korea Research Institute of Bioscience and Biotechnology (KRIBB)



KRIBB is the

research institute that conducts advanced R&D activities
in areas such as healthcare, food production, new bio
-
materials
environment protection, and new energy resources.




Korea Research Institute of Chemical Technology (KRICT)



KRICT support the chemical industry in areas such as research, test,
commercialization, towards enhancing its base technologies and
competitiveness.




Mogam Biotechnology Research Institute (MBRI)



MBRI is developing biological response modifiers and pathogenesis
and immune treatment for difficult and infectious diseases such

as
Type B or Type C hepatitis.




POSTECH Bio Center (PBC)



Based on its excellent human resources at Pohang University of
Science and Technology [POSTEC
H] and partnerships with leading
Korean companies such as POSCO, PBC conducts high
-
tech
biotechnology researches.




Institute of Molecular Biology and
Genetics (IMBG)



IMBG is established within the Seoul National University to conduct
R&D in basic life science, commercialize research results, support
start
-
ups, and foster human resources.







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10.3

Listed private Companies

Kumho Petrochemical

http://www.
kkpc.com

Kim Jeong Moon Aloe

http://www.aloe.co.kr

Neodin Medical Institute

http://www.neodin.co.kr

NEXGEN Biotechnologies

http://www.nexgenbiotech.com

NOVA Bio Greentek

http://www.novabgtek.co.kr

Green Cross

http://www.greencross.com

Daesang

http://
www.daesang.co.kr

Daewoong Pharmaceuticals

http://www.daewoong.co.kr

TS Corporation

http://www.ts.co.kr

DONGKOOK Pharmaceuticals

http://www.dkpharm.co.kr

Dongshin Pharmaceuticals

http://www.dong
-
shin.com

Dong
-
A Pharmaceuticals

http://www.donga.co.kr

DC Chemical

http://www.kosco.co.kr

DongWha Pharmaceuticals

http://www.dong
-
wha.co.kr

Doosan biotech

http://www.carenic.co.kr

Microscience Tech

http://www.mstltd.co.kr

Mukunghwa

http://www.mkh.co.kr

Millipore

http://www.millipore.com

Bioneer

http://ww
w.bioneer.co.kr

Biosaint

http://www.biosaint.com

Orient

http://www.orient.co.kr

BioCore

http://www.bio
-
core.com

Bukwang Pharmaceuticals

http://www.bukwang.co.kr

Boryung Pharmaceuticals

http://www.boryung.co.kr

Samsung Fine Chemicals

http://www.sfc.sa
msung.co.kr

Samyang Genex

http://www.genex.co.kr

Samjin Pharmaceuticals

http://www.samjinpharm.co.kr

Samchully Pharmaceuticals

http://www.scp.co.kr

Sempio Foods

http://www.soysauce.co.kr

Sunjin

http://www.sj.co.kr

Polystar

http://www.pmo.co.kr

Sarto
rius

http://www.sartorius.co.kr

C
-
TRI

http://www.c
-
tri.com

Aminogen

http://www.aminogen.co.kr

Agribrands Purina Korea

http://www.agribrands.co.kr

SJ Hightech

http://www.sjhightech.com

EugeneScience

http://www.eugene21.com

YuHan

http://www.yuhan.co.kr

ISU Chemical

http://www.isuchemical.co.kr

Il Dong Pharmaceuticals

http://www.ildong.com

XenissLifeScience

http://www.xeniss.com

Chong Kun Dang

http://www.ckdpharm.com

Choongwae Pharmaceuticals

http://www.cwp.co.kr

Chemizen

http://www.chemizen.com

K
orea Bio Polymer

ttp://www.kbpco.com

Chemcross

http://www.chemcross.com

Amore Pacific

http://www.amorepacific.co.kr





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Posco

http://www.posco.co.kr

Pulmuone

http://www.pulmuone.co.kr

Korea Vaccine

http://www.kovax
-
v.co.kr

Korea Yakult

http://www.yakult.
co.kr

Hanmi Pharmaceuticals

http://www.hanmi.co.kr

Hanwha Chemical

http://hcc.hanwha.co.kr

LG Life Sciences

http://www.lgls.co.kr

RNL Bio

http://www.rnl.co.kr

SK Chemicals

http://www.skchemicals.com













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10.4

Biotech Companies Listed on
K
OSDAQ

Co
mpany

Major Business

Remark
s

Daesung
Microbiological
L
abs

V
eterinary medicines

Applies biotechnology to veterinary medicines and
aquaculture

Daehan New
Pharm

Pharmaceuticals and
veterinary medicines

Manufactures animal feed additives and antibiotics.
Se
lls the product
in

Britain

Daehan Biolink

Lab
oratory

animal
breeding

Mass produce SPF laboratory mice to meet
international standards and plans to enter the
overseas market jointly with Harlan of
the
U.S.

Macrogen

DNA analysis service

Exclusive seller of

transgenic and knockout mice in
Korea. Provides R&D services using DNA sequencing
ability. Star
t
ed
the
Korean genome project

Bioland

Ingredients for high
-
end cosmetics

Specializes in the production of natural ingredient
for cosmetics

Bio
-
Media

Synthetic

soil

Facilitates

plant growth by adding organic
substances and non
-
soil materials to general soil.
Has
a
60% domestic market share for synthetic

soil
for general and fruit farming.

Easy Bio System

Specialist in antibiotic
alternatives and
functional feed

additives

D
evelops biotech items such as antibiotics
alternatives, environment enhancing products and
functional feed additives, Also invests in a large
number of venture startups to generate synergy
from merchandise development

InbioNET

Microbial produc
ts

Manufactures
and
sells cultivated microbes for
environment
al

purposes. Produces microbial
enzymes for
feed additives

and soil purification
product
s

Cheil Bio

Specialist in
veterinary
pharmaceutical

products

Commercialize
d

application of in
-
house develo
ped
special enzymes

Choon Ang
Biotech

Veterinary antibiotics
and nutrient
supplements

Localized production

of Niacin, a raw material for
vete
rinary

medicines, Technology tie
-
up and raw
material supply contact with a global veterinary
pharm
aceutical
manufa
cturer
.

Eagle Vet

V
eterinary medicines

Ranks
first in Korea

in feed additives, water
-
soluble
formulations and liquid products. Produces vaccines
for swine and aquaculture applications

Korea
Microbiological
Labs

V
eterinary medicines

Makes veterinary
v
acci
nes, natural food
preservatives and biotech fertilizers

Kobiotech

Bioreactors

Has

a

70% domestic market share of bioreactors
after
localizing production

CTC Bio

V
eterinary medicines

Manufactures and sells veterinary medicines, such
as enzyme products, an
tibiotics, and animal feed

Biospace

Medical equipment

Specializes in body
composition

analyzers for
professionals, claiming 70% of the domestic market.
Holds patents

on body fat and water measurement
technology, plus edema testing technology

Binex

Medica
l products

Focuses on treatments for intestinal problems and
pregnancy tests. Plans to export finished
hepatitis

treatment

Source: Hyundai Securities





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10.5

Biotechnology classification

Code

Technology


A



Genetic engineering


A1


Gene manipulati
on


A2


Gene expression and regulation


A3


Gene application


A4


Gene therapy


A0


Genetic engineering, N.E.S.


B




Protein engineering


B1


Protein structure analysis


B2


Protein function analysis


B3


Complex p
rotein engineering


B4


Peptide engineering


B5


Protein application


B0

Protein engineering, N.E.S.


C




Other macromolecule engineering


C1


Lipid engineering


C2


Carbohydrate engineering


C0


Other macromolecule engi
neering


D




Cell and tissue engineering


D1


Stem cell therapy


D2


Bioenvironment regeneration


D3


Functional biomaterial development


D4


Cell engineering


D5


Tissue engineering


D0


Cell and tissue engineering
N.E.
S.



E




Systems biology and bioinformatics


E1


Genome sequence analysis


E2


Functional genomics


E3


Proteomics


E4


Bioinformatics


E0

Systems biology and bioinformatics, N.E.S.


F




Metabolic engineering


F1



Metabolite production


F2


Applications of metabolic engineering


F3


Understanding the metabolism and pathways


F0

Metabolic engineering N.E.S.


G




Bioprocess


G1.


Fermentation engineering


G2.


Cell culture engineerin
g


G3.


Biotransformation


G4.


Bioseparation engineering


G5.


Industrialization


G0.

Bioprocess, N.E.S.


H




Bioresource production and utilization


H1


Plant resource technology


H2


Animal resource technology





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H
3


Microbial resource technology


H4


Insect resource technology


H5


Marine/fresh water organism technology


H6


Food engineering


H7


Biomaterial technology


H8


Biodiversity conservation


H0

Bioresource production and uti
lization, N.E.S.


I




Environmental biotechnology and bioenergy technology


I1


Clean technology


I2


Environmental pollution control and management technology


I3


Bioenergy technology


I0

Environmental biotechnology, N.E.S.


J




Nanobiotechnology


J1


Nano
-
biodevice fabrication


J2


Nanoscale biomaterial


J3


Nano drug delivery system


J4


BioNEMS, nano
-
LOC (lab
-
on
-
a
-
chip)


J0

Nanobiotechnology, N.E.S.


K




Bioelectronics


K1


Biosen
sor fabrication


K2


Bioelectronic device fabrication


K3


Biochip fabrication


K4


Microfluidics


K0

Bioelectronics, N.E.S.


L




Biosafety and bioefficiency


L1


Safety evaluation


L2


Safety management


L3


Envi
ronmental assessment


L4


Biohazard management


L5


Bioefficacy


L0

Biosafety and bioefficiency, N.E.S.


M



Other Biotechnology


M1


Combinatorial biology


M2


Drug delivery


M3


Immunotechnology


M0

Other Biotech
nology, N.E.S.





















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10.6

Bio
technology industry classification

Code

Industry classification

Biopharmaceutical industry

1

1010

Antibiotics

1020

Anticancer medications

1030

Vaccines

1040

Hormones

1050

Immunotherapeutics

1060

He
motherapeutics

1070

Inhibitors

1080

Growth factors

1090

New therapeutics (gene and cell therapy, organ cloning etc.)

1100

Diagnostic kits

1110

Animal medications

1000

Other biopharmaceuticals


Biochemical industry

2

2010


Biopolymers

2020


Industrial enzymes and reagents

2030


Enzymes and reagents for research

2040


Biocosmetics and home & personal care chemicals

2050


Biological agrochemicals and fertilizers

2000


Other biochemicals


Biofood industry

3

3010


Health
functional foods

3020


Amino acids

3030


Food ingredients

3040


Fermented foods

3050


Feed ingredients

3000


Other biofoods


Bioenvironmental industry

4

4010


Microbial treatment agents

4020


Microbe
-
immobilized materials and equipmen
ts

4030


Bioenvironmental agents and systems

4040


Measuring apparatus for environmental pollution

4000


Other bioenvironmental productions and services


Bioelectronics industry

5

5010


DNA chips

5020


Protein chips

5030


Cell chips

5
040


Biosensors

5050


BioMEMS

5000


Other bioelectronics


Bioprocess and equipment industry

6

6010


Bioreactors

6020


Biomedical and diagnostic apparatuses

6030


Bioprocess and analysis equipments (equipments for separation and
purificat
ion, synthesizers and amplifiers, sequence analyzers, analysis
instruments, etc.)





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6040


Plant and process design

6000


Other bioprocesses and equipments


Bioenergy and bioresource industry

7

7010


Biofuel

7020


Artificial seeds and seedlings


7030


Experimental animals

7040


Transgenic animals and plants

7000


Other bioenergy and bioresources


Bioassay, bioinformatics and R&D service industry

8

8010


Bioinformatics services

8020


Gene analysis services

8030


Proteome analysi
s services

8040


R&D services (drug development services, etc.)

8050


Biosafety and efficacy assessment services

8060


Diagnosis and preservation services

8000


Other bioassays, bioinformatics services