Biotechnology in Taiwan

Biotechnology in

Taiwan

2

Trends for Economic
Development


The Next Silicon Valley


Battle for the Dot.Coms


Biotech: NBT (The Next Big
Thing)


83% of local development agencies

place bio among their top two priorities


41 countries have biotech development
programs as strategic priority

3

Definition


Biotechnology


Firms using genetic and cellular techniques


Biomedicine: diagnostic/therapeutic


Industry
-
developed definitions & data

4

Applications

Agriculture

Plant breeding to improve resistance to pests, diseases, drought and salt
conditions

Mass propagation of plant clones

Bioinsecticide development modification of plants to improve nutritional and
processing characteristics


Medicine

Development of novel therapeutic molecules for medical treatments

Diagnostics

Drug delivery systems

Tissue engineering of replacement organs

Gene therapy


Chemical Industry


Production of bulk chemicals and solvents such as ethanol, citric acid, acetone
and butanol

Synthesis of fine specialty chemicals such as enzymes, amino acids, alkaloids
and antibiotics


5

Applications

Food Industry


Production of bakers' yeast, cheese, yogurt and fermented foods such
as vinegar and soy sauce

Brewing and wine making

Production of flavors and coloring agents


Veterinary Practice


Vaccine production

Fertility control

Livestock breeding


Environment

Biological recovery of heavy metals from mine tailings and other industrial
sources

Bioremediation of soil and water polluted with toxic chemicals

Sewage and other organic waste treatment

6

Products of Biotechnology

7

Types of Industries

Pharmaceuticals


Very large, global firms


Top ten average $15
billion sales



Assets are products,
distribution,
manufacturing expertise



Very Profitable

Biotechnology



Small, mostly single
establishment firms

•
Top ten average $700
million sales



Principal assets are
people, research and
future potential




Lose Money


8

Experiences from USA

Biotechnology Industry


Biotech tends to cluster


Leaders have an edge


Entrepreneurship & venture capital are key


Outlook for biotech
-
led economic
development

9

Biotech tends to cluster


Talent is drawn to where firms are; firms
form where talent is


Powerful business advantages from
agglomerations


Lock
-
in to particular arrangements



10

Leaders have an Edge


Falling (further) behind the Leaders


Biotech is concentrated and growing
more

so


Leaders are:


5 to 10x bigger than followers in research
and


30 to 100x bigger than followers in
commercialization

11

Keys for New Biotech


Research base is necessary
but not
sufficient


Commercialization Assets


Entrepreneurial researchers


Industry
-
relevant talent

•
Technical

•
Managerial


Venture capital
--
surprisingly localized

12

Competitiveness of

Asia
-
Pacific Biotech


Infrastructure Dev
’
t

Regulatory &
Cultural Env
’
t

Gov
’
t
Policy

Human
Resource Dev
’
t

Finance &
Resource
Mobilization

Overall
Ranking

Physical
Infrastructure

Scientific
Infrastructure

Regulatory &
Cultural Env
’
t

Gov
’
t
Policy

Human
Resource Dev
’
t

Public
Funding

Private
Funding

Japan

1

1

1

1

1

1

1

1

Australia

2

2

2

2

3

3

2

2

Israel

4

3

3

3

2

5

3

3

Singapore

3

7

4

4

4

2

4

4

Korea

5

5

6

5

5

6

6

5

Taiwan

6

6

5

6

5

4

5

6

New Zealand

6

4

5

7

6

8

8

7

Hong Kong

8

8

8

8

8

7

7

8

China

9

9

9

11

9

9

11

9

India

11

10

11

10

10

11

9

10

Malaysia

10

11

9

9

11

10

9

11

Thailand

12

12

12

12

12

12

12

12

Indonesia

13

14

13

13

13

13

13

13

Philippines

14

13

14

14

14

14

14

14

[
Note: Survey was conducted by Asia
-
Pacific IMBN Secretariat from August
-
December 1999. 20 leading experts from around the region

were invited to share their perception of scientific
development in the region. The results are based on inputs from 12 of these experts. Australia (3), Chinese Taipei (1), Japan

(3
), Korea (1), Phlippines (3), Singapore (1)]

13

Overview of Asia
-
Pacific

Biotech Ventures



Asia Pacific Country/
Economy

Estimated
Number of
BioVentures

BioVentures
per million
population

Korea

300

6.4

Israel

200

33.3

Australia

150

7.8

Japan

130

1.1

China

100

0.1

Taiwan

100

4.3

Hong Kong

50

7.0

Singapore

30

6.9

Source:
BioEnterprise
Asia, original
research, 2001/2

Total Market Cap for about 1000 Asia
-
Pacific Biotech Companies

estimated to be about 3
-
5% of Top 25 US Biotech Companies!

14


Singapore


$700 million in investment funds


Establish genome research center by
recruiting top
-
rank scientists


Taiwan


$570 million in investment funds


Japan


1,000 bioventure companies by 2010

15

Evaluation of Asia Pacific
Biotech Development

Environment


Heavy regional
investment in the life
sciences


Growing scientific base


Expanding portfolio of
intellectual property

Hurdles/Challenges


Limited translation of
academic research and
technology development into
commercial application


Lack of strategic and business
management expertise in life
sciences


Lack of
“
smart money
”

funding
for concept development,
technology validation and
business case validation


Opportunities and Needs


Identifying

and

nurturing

development

of

high

potential

know
-
how

and

technologies



Providing

commercial

acumen

and

marketplace

orientation


Critical

business

and

entrepreneurship

development

support


Dedicated

seed

financial

support

for

promising

enterprises


Establishing

sustainable

life

science

start
-
up

companies

Market capitalization of all biotech companies in Asia today is estimated to be about 3% of capitalization of top 25 US compa
nie
s.

We have only just begun!

Biotech in Taiwan

17

Development of

Biotech in Taiwan


The history of biotechnology in Taiwan
went back to 1982.


One of eight targeted technological
development areas


“planning mode” in Japan


Focus on traditional fermentation
technology, enzymes, and anti
-
biotic
products

18

Current Situation in

Taiwan’s Biotech

(Aug. 1997 ~ June 2002)

19

Industry Structure of

Taiwan’s Biotech

Fields

1997

1998

1999

Medical

biotechnology
:

human

vaccines,

bulk

pharmaceuticals

and

diagnostic

kits

6,500

6,600

7,100

Agricultural

biotechnology
:

ornamental

plants,

animal

vaccines

and

bio
-
pesticides

982

1,000

2,070

Food

biotechnology
:

fermentation

amino

acids

5,200

5,600

5,780

Industrial biotechnology: Specialty enzymes, biopolymers

380

370

370

Environment

biotechnology
:

specialty

microorganisms

40

44

100

Services

and

supplies
:

BA/BE,

laboratory

supplies/services,

strain

improvement,

etc
.

1,500

1,650

1, 940

Unit: NTD Million

Industry output is about NTD 15 billion


→


industry output will be NTD 80 billion



in 1997


in 2005

Other (14%)

pharmaceuticals (24%)

food industry (25%)

other (25%)

Food industry (51%)

specialty (11%)

pharmaceuticals/specialty (50%)

20

Biotech Services Industry
in Taiwan

Segments

Services

Companies

Laboratory Instruments
and Supplies

Biochemical Instruments, bioteactors, computer
software, Labwares, lab. reagents

Becton Dickinson, Agilent, E
-
Hong Instruments
（益弘）
, San Kwang
Instruments
（三光）
, China Chromatography
（中國層析）
, Varian
、
Perkin Elmer
、
Beckman

Analytical

Physicochemistry test, toxicology test

NAmSA

Bioremediation, environmental chemistry analysis

Cenpro Technology
（中環科技）
, SGS Taiwan
（台灣檢驗科技）
,Shou
Jaan
（碩展科技）
, GeneAsia
（亞太生技）

Contract Research and
Production

Contract research, manufacturing of
biopharmaceuticals, industry enzymes or specialty
chemicals

Grand Biotechnologies
（新高）
, Taiwan Genome
（台灣基因）
, Vigene
Diagnostics
（微基因）
, Covance, Quintiles

Platform

Technology

Combinatorial chemistry, drug delivery system and
bioinformatics

Advanced Gene Tech
（先進基因）
, GeneAsia, United Biomedical

DNA sequencing

Mission Biotech
（明欣）
, Violet BioScience
（紫外光）

Peptide or DNA synthesizing

DNAFax

Inc
.
（
湃瑪仕
）

New Drug Development

Pre
-
clinical or clinical trials

Panlabs
（泛球）
, Statplus
（晉加）
, Gene Labs
（健亞）
, GeneAsia,
Covance, Quintile

BA/BE

Mithra
（明生）
, Protech Lab. Co.
（佳生）

Others

Intellectual property right and legal service

Lee and Li
（理律）
, Top Team International
（冠群）
, Deep & Far
（道法）

Venture Capitals

China Development Industrial Bank
（中華開發）
, Fidelity, Hotung
（和
通）
, BioAsia
（生亞）
, MDS Capital

Consulting and regulatory affairs




Source
:

DCB,

ITIS

21

Biotech Parks in Taiwan

22

Challenges


Production


Domestic pharmaceutical companies producing
traditional vaccines have difficulties transforming
to biotech
-
based due to shortage of capital,
equipment and technology


The animal biotech are too little to reach profitable
scale


The verification of products is unsure and not
internationally recognized


Biotech products cannot be produced without the
license of chemical factory


The skill of basic technicians should be upgraded

23

Challenges


Marketing


The domestic market is too small and international
market is conditionally opened as WTO prevails


The GMO issue has not been recognized
internationally


The verification, label and education are not
sufficient


The crisis of agri
-
products after Taiwan becomes
a WTO member


Insufficient information of global market

24

Challenges


Operations


Lack of ability to research and develop new drugs
and vaccines (?)


High cost in R&D lowers interests of the potential
investors


Lack of ability to evaluate new technology and
market (?)


Lack of managers and CEOs with both scientific
knowledge and managerial experience


Lack of Chief Operating Officers

25

Challenges


Environment


Lack of public facilities


Building coverage ratio bans to build the warm
room at the farm land in the Urban Planning Zone


Rising cost of land, manpower and living expense


The government policy to assist and protect
traditional farming industry interferes the market

26

Challenges


Regulations and Laws


Regulations and laws are not updated


Intellectual property is not fully protected


GMP verification is not standardized


Ban to recruit professional biotech talents from
mainland China

27

National Science and

Technology Program

for Agri. Biotechnology


1998
-
2001, 2002
-
2004


Market potential


Sustainable development of the agri.
Biotech industry in Taiwan


Taiwan as the R&D hub in the Asia
-
Paci
fic region

28

Seven Important Areas


Flowers and ornamental plants


Bioprotectants for plant protection


Aquaculture


Livestock/Animal Vaccines


Post
-
harvest technology/utilization


Environmental biotechnology


Development and utilization of medical
and health plant