asm international conference - global and local biotechnology industry
TRANSCRIPT
The Global and Local Biotechnology Industry
ASMIC, June 2010
• © 2010 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the prior written approval and consent of Frost & Sullivan.
2
“Sometimes people ask me what field I'd be in if not computers. I think I'd be working in biotechnology”
Bill Gates
New York Times, June 18, 1996
3
AGENDA
Global Biotechnology OverviewGlobal Biotechnology Overview11
Benchmarking successful biotechnology clustersBenchmarking successful biotechnology clusters22
Malaysia in the context of biotechnologyMalaysia in the context of biotechnology33
4
Global Industry Profile The development of a global market and emergence of new players will drive growth in the market
Agricultural & Industrial Biotechnology approach critical mass
Pricing Pressure & Asia’s emergence leads to global extension of companies
Beyond Geographic Borders
Beyond Industry Borders
Monoclonal Antibodies & Personalized medicines bring new applications of drugs to the market
Beyond Product Borders
The Driving factors for Global Biotech growth
Stage of development:
Time
CHINA
TAIWAN
MALAYSIA
AUSTRALIA
NEW ZEALAND
JAPAN
US & EU
Source: Frost & Sullivan, DataMonitor
• Countries in Asia exist across the entire biotechnology value chain
• Japan has long held a global position of strength in the biotechnology market and is a world leader in segments of the market (e.g: food processing)
Commodity
Proprietary/
Innovation
Low Margin
High Margin
5
Global Biotechnology Industry Overview: 2009
Global US (inc Canada)
EU APAC
Revenue (USD million)
100 70 18 12
Number of companies
~5000 2100 1900 1000
Global Biotechnology Revenue by Sectors
12%
26.00%
62%
Healthcare Agriculture Others, Inc Industrial
HC: Will continue to be >50% of the market
Breakdown by Sector
6
Scientific American WorldviewA global biotechnology survey, 2010
IP INTENSITYENTERPRISE
SUPPORTEDUCATION/WORKFORCE FOUNDATIONS TOTAL
US 5 2.83 4.87 2.5 3.64 3.8
Singapore 4.31 1.54 4.69 3.16 3.71 3.5
Denmark 4.78 2.46 3.46 1.89 3.23 3.2
Sweden 4.65 1.36 3.54 2.24 3.92 3.1
Israel 4.23 0.89 4.3 1.73 4.44 3.1
Australia 4.27 0.86 4.54 2.39 2.74 3
Switzerland 4.43 1.61 3.34 2.55 3.31 3
UK 4.65 1.21 3.69 2.03 2.7 2.9
Canada 4.78 1.8 3.52 1.64 2.79 2.9
Germany 4.61 0.64 3.16 1.68 3.51 2.7
China 4.18 0.62 2.85 0.21 2.59 2.1
India 3.85 0.68 2.68 0.005 1.42 1.7
Source: Scientific American World Viewhttp://www.saworldview.com/article/a-global-biotechnology-survey---worldview-scorecard--
• INTENSITY measurement—defined by indicators such as public companies per capita and portion of overall R&D
spending used for biotech—balances some of the size-related differences between countries• This survey aims to find how well various countries are doing in Biotechnology
7
Source: http://bharatbook.com; www.frost.com
Dynamics of the Biotech Industry in APAC . . . Valued at USD 50 million
India India has an emerging biotechnology industry that is aided
by a large highly-educated community of scientists and researchers. The country's biotechnology industry also boasts of strong government support and a growing infrastructure base
The Contract Research industry in India could reach as high as US$ 270 million by 2009
Indian biotech sector could reachUS$5 billion by 2010 Biopharmaceutical segment has more than 40% of the 325 biotech
companies in India
Japan The Japanese government, which was
earlier accused of shielding its domestic companies, has now opened its doors for foreign investment
China Opaque government policies and regulations in China are
acting as a major hurdle for foreign participation in the biotech market
China’s health biotech segment had maintained an annual growth rate of 30% since 2005. Biopharmaceutical production rose from US$860 million in 2000 to US$4.2 billion in 2005, and is forecast to exceed US$12.5 billion in 2015
Venture capitalists committed US$337 million to Chinese life sciences projects during 2008.
Australia Australia's strengths in
biotech research include agricultural and medical research in general, but particularly immunology and vaccines, stem cells, proteomics, and bioinformatics
South Korea The South Korean Ministry of
Science and Technology (MOST) plans to make South Korea the seventh most developed country by 2010 in biotechnology
Taiwan The government expects that the local
biotech industry will support 500 biotech companies by the end of 2010 and transform Taiwan into a Green Silicon Island
Singapore Singapore has strong government support
and capital injection to boost its biotech industry. Made strides in biomedical research
Malaysia Malaysia has strong government
support and capital injection to boost its biotech industry. Focus is on technology transfer and key areas of agriculture, healthcare and industrial biotechnology
8
AGENDA
Global Biotechnology OverviewGlobal Biotechnology Overview11
Benchmarking successful biotechnology clustersBenchmarking successful biotechnology clusters22
Malaysia in the context of biotechnologyMalaysia in the context of biotechnology33
9
Examples of strong biotech clusters
California • San Francisco Bay
Area in North California
• Los Angeles, Orange County, Riverside and San Diego in South California
Boston/ Massachusetts
• Greater Boston Area including Providence and Worcester
Medicon Valley• Zealand in Denmark
and Scania in South Sweden
South Korea• Across the country
Singapore
Taiwan• Medical Technology
10
The Magic of Boston and California ClustersStrong science base. Established institutions, Funds from government and VC, strong industry associations and a spirit of entrepreneurship make them sustainable clusters
Strong Science BaseStrong Science Base
• 30+ years of history in Biotech
• 100+ years of successful research
at MIT, Harvard, Stanford, UCSF
• Efficient TLO and networks to drive
commercialization
• Spin offs from successful
companies
• Clarity in IP transfer
• Leading Medical Institutions in the
area
• 30+ years of history in Biotech
• 100+ years of successful research
at MIT, Harvard, Stanford, UCSF
• Efficient TLO and networks to drive
commercialization
• Spin offs from successful
companies
• Clarity in IP transfer
• Leading Medical Institutions in the
area
Funding AvailabilityFunding Availability
• NIH funds of $ 2bn + annually
• VC funds of $ 1bn + annually
• IPO markets, Angel community and
a culture to promote
entrepreneurship and risk taking
• $80mn+ funding for small
businesses
• NIH funds of $ 2bn + annually
• VC funds of $ 1bn + annually
• IPO markets, Angel community and
a culture to promote
entrepreneurship and risk taking
• $80mn+ funding for small
businesses
Business Environment for Biotech
Business Environment for Biotech
• Intellectual environment attract
staff and companies
• Continuous supply of educated
workers
• Industry Associations to
continuously monitor and
provide feedback
• State’s drive to attract companies
• Presence of three generation of
entrepreneurs
• Intellectual environment attract
staff and companies
• Continuous supply of educated
workers
• Industry Associations to
continuously monitor and
provide feedback
• State’s drive to attract companies
• Presence of three generation of
entrepreneurs
• Boston and California face competition from Texas, Los Angeles, Philadelphia for funds. Companies
locating manufacturing facilities elsewhere for low real estate costs, higher tax benefits etc.• Continuous need to Provide space, talent, funds for the expanding cluster• Needs to continue focus on scientific collaboration and innovation• Emerging clusters pose competition due to low cost, high growth potential for companies
Key Capabiliti
es
Key Capabiliti
es
Key Issues
Key Issues
11
The Growth of Korea Educated and experienced manpower, success in research and clinical trials and the biomedical infrastructure created by the government are the key reasons for growth
Strong Science BaseStrong Science Base
• Biotechnology-related Departments
in 40 Universities
• Strong in clinical trials
• High quality of workforce
• Around 40 technologies or drug
candidates were licensed out to Big
Pharma during 1986-2008 and over
100 new drugs or lead candidates
are under development.
• Biotechnology-related Departments
in 40 Universities
• Strong in clinical trials
• High quality of workforce
• Around 40 technologies or drug
candidates were licensed out to Big
Pharma during 1986-2008 and over
100 new drugs or lead candidates
are under development.
Business Environment for BiotechBusiness Environment for Biotech
• Govt. creating research institutes, 25 biotechnology centers acting as
incubators, specialized biotech parks, providing funds
• The first initiative started in late 1980’s, continued effort in 1994 and 2006
• government investments have grown from $311mn in 2001 to $721mn in
2007. This represents a CAGR of 15%.
• Korea is ranked as 19 by WF Global Competitiveness Report 2009-10
• The Bio-Vision initiative started in 2006 out with a budget of $720 million
for R&D and $230 million for infrastructure in 2007, with a projected rise to
$1.67 billion for R&D and $690 million for infrastructure by 2016. The total
budget for nine years is projected at $15.56 billion
• Govt. creating research institutes, 25 biotechnology centers acting as
incubators, specialized biotech parks, providing funds
• The first initiative started in late 1980’s, continued effort in 1994 and 2006
• government investments have grown from $311mn in 2001 to $721mn in
2007. This represents a CAGR of 15%.
• Korea is ranked as 19 by WF Global Competitiveness Report 2009-10
• The Bio-Vision initiative started in 2006 out with a budget of $720 million
for R&D and $230 million for infrastructure in 2007, with a projected rise to
$1.67 billion for R&D and $690 million for infrastructure by 2016. The total
budget for nine years is projected at $15.56 billion
• Pharmaceutical companies do not have strong experience to enter global markets• Difficulty to source foreign talent• Collaboration needs to improve among universities and industries. Between companies in the clusters• Pharmaceutical industry is mostly generics
Key Capabiliti
es
Key Capabiliti
es
Key Issues
Key Issues
12
Taiwan Clusters
• 17TH IN World, 1st in Asia
Knowledge Economy
Development by WB (2008)
• 6th in World, 2nd in Asia
Innovation Ranking by EIU
(2007-11)
• 17TH IN World, 5th in Asia Global
Competitiveness Index (2008-
09)
• 1st Industry Cluster Development
Global Competitiveness Index ,
WEF 2006-09
Source:, Ministry of Economic Affairs Taiwan, 2009
13
AGENDA
Global Biotechnology OverviewGlobal Biotechnology Overview11
Benchmarking successful biotechnology clustersBenchmarking successful biotechnology clusters22
Malaysia in the context of biotechnologyMalaysia in the context of biotechnology33
14
DR
IVER
S
Availability of Research grants and Govt support
Cost-competitive labor
Rich biodiversity
Cost effective leading to potentially higher profit margins
Market demand as acceptability of biotech in all areas increases
Good infrastructure, good transportation network
National Biotechnology Policy
BioNexus Status
RES
TR
AIN
TS
Structural and background as manufacturing country
Time to build technology background
Insufficient funding
Human resource
Lack of financial loans from financial institutions
Malaysia’s Biotechnology Industry:Overall Market Drivers and Restraints
15
Comparative Analysis
• Lack of compiled data for the clusters and across the same areas and similar year make quantitative comparison difficult
California Boston Medicon Valley Korea Singapore Malaysia
Year 1978 1978 1995; Previous Presence 1982 & then 2000 2000 2000
No. of companies 2000 1300 500700 pharma , 600 biotech, 2000 medical devices
Over 130 global biomedical companies
176 biotech companies
Sector size and growth
Lifesciences contributed $ 75bn in 2008, a growth of 2% over 2007
Biotechnology annual growth rate of 7% during 2003-2007
N/A
Pharmaceutical was $14bn in 2007 growing at 10% during 2001-2007. Biotech was $3.3 bn in 2006 growing at 18% during 2001-2006
Biomedical sector was $15bn (S$20.7 bn) in 2009 a CAGR of 14% during 2000-2009
$400mn in 09, up from $150 mn in 2009
Venture Capital Funding (Private Funds)
$3.4 bn in 2009 $1.1 bn in 2006 $940 mn in 2006 N/A $100 mn in 2009 $20 mn in 2009
Number of BT co’s ~800 ~80 ~175
Research inst >100 17 43
Employment 274,000 72,000 40,000 63,000 16,000 5,500
Population7.4 mn ( SF Bay Area)2.7 mn (San Diego)
4mn (Greater Boston) 3.2 mn 48 mn 4mn 27mn
Region Area (sq km)
18000 (SF Bay Area) 840 (San Diego)
12105(Greater Boston)
1788 (Zealand)10939 (Scania)
98,480 ( country area) 682 2,500 (5 economic
corridors)
Source: Frost & Sullivan Analysis
16
Key Attributes of Successful Biotech Clusters
. . . . Priorities for Malaysia
Industry MaturityIndustry Maturity
Funding AvailabilityFunding Availability
• Presence and nature of biotech companies (e.g. Startup, early stage, late development, mature commercial, enabling service)
• Quantity and diversity of lifesciences stakeholders (e.g. R&D, medical devices, clinical trials and manufacturing, supporting industries)
• Growth in Output – stagnated growth, slow growth or faster than industry
• Presence and nature of biotech companies (e.g. Startup, early stage, late development, mature commercial, enabling service)
• Quantity and diversity of lifesciences stakeholders (e.g. R&D, medical devices, clinical trials and manufacturing, supporting industries)
• Growth in Output – stagnated growth, slow growth or faster than industry
• Availability of funding to support early stage company research
• Funding for established biotech companies to invest in additional infrastructure and clinical research to move products into the market place
• Public and Private funding channels
• Availability of funding to support early stage company research
• Funding for established biotech companies to invest in additional infrastructure and clinical research to move products into the market place
• Public and Private funding channels
University/Medical Centre MaturityUniversity/Medical Centre Maturity
Regulatory and Business EnvironmentRegulatory and Business Environment
• Strong research universities and academic medical centers, supported by effective technology transfer offices, as a key source of innovation and talent
• Collaborative relationships between research universities and academic medical centers to sustain invention and innovation
• Areas of Research and Commercialization Success
• Strong research universities and academic medical centers, supported by effective technology transfer offices, as a key source of innovation and talent
• Collaborative relationships between research universities and academic medical centers to sustain invention and innovation
• Areas of Research and Commercialization Success
• Stable and supportive public policy structure• Supportive business environment to retain existing
companies and / or attract new enterprises (e.g., taxes, permitting, costs, IP protection)
• Stakeholder Synergy
• Stable and supportive public policy structure• Supportive business environment to retain existing
companies and / or attract new enterprises (e.g., taxes, permitting, costs, IP protection)
• Stakeholder Synergy
Source: Frost & Sullivan analysis
• Industry Maturity and University/Medical Centre maturity comprises Company and Science Base• Funding Availability Remains Same• Regulatory and Business Environment comprises other seven factors
17
Setting the stage…
33
44
55
66
22
11
To improve Industry Maturity– we need to focus on medical devices, commercialisable research, historically strong technologies
To improve Industry Maturity– we need to focus on medical devices, commercialisable research, historically strong technologies
To improve University and Medical Centre maturity - collaboration activities, TTOs and incubators, More commercial exposure to scientists and international tie-ups are needed
To improve University and Medical Centre maturity - collaboration activities, TTOs and incubators, More commercial exposure to scientists and international tie-ups are needed
Promotion of SMEs, Improving skill base and promoting entrepreneurship are desirable to improve the business environment in the overall industry
Promotion of SMEs, Improving skill base and promoting entrepreneurship are desirable to improve the business environment in the overall industry
Pre seed funding and steps to develop VC need to be taken to improve funding availability for companiesPre seed funding and steps to develop VC need to be taken to improve funding availability for companies
Malaysia is at the starting point of biotechnology innovation . . . . We don’t have a history and need to progress on each attribute . . Starting from our education system and public awareness
Malaysia is at the starting point of biotechnology innovation . . . . We don’t have a history and need to progress on each attribute . . Starting from our education system and public awareness
Industry Maturity, Medical Centre and University Maturity, Funding Availability and Regulatory and Business Environment are four key attributes of a strong biotechnology cluster
Industry Maturity, Medical Centre and University Maturity, Funding Availability and Regulatory and Business Environment are four key attributes of a strong biotechnology cluster
18
Proactive commercialization in Research and Academic Centers – Learning from Yale University
Technology Transfer at Yale University
Technology Transfer at Yale University ImpactImpact
• Only six biotech companies in 1993• The hard work of seeking appropriate investors
eventually paid off, and in 1998, after two years
of effort, the first round of financing was
concluded with $20 million for five companies.• Today the Connecticut cluster employs 17,985
people directly and 35,857 through indirect and
induced employment. It consists of 49
biotechnology companies. Five of the biotech
companies are publicly traded: Alexion
Pharmaceuticals, Neurogen, Curagen,
Gennesiance, and Vion Pharmaceuticals. Of
the biotech companies, 24 companies, or 49%,
of the biotechnology cluster in New Haven
were created after 1996 with technology, ideas,
or founders from Yale and with the help of the
OCR.
• Only six biotech companies in 1993• The hard work of seeking appropriate investors
eventually paid off, and in 1998, after two years
of effort, the first round of financing was
concluded with $20 million for five companies.• Today the Connecticut cluster employs 17,985
people directly and 35,857 through indirect and
induced employment. It consists of 49
biotechnology companies. Five of the biotech
companies are publicly traded: Alexion
Pharmaceuticals, Neurogen, Curagen,
Gennesiance, and Vion Pharmaceuticals. Of
the biotech companies, 24 companies, or 49%,
of the biotechnology cluster in New Haven
were created after 1996 with technology, ideas,
or founders from Yale and with the help of the
OCR.
• High support–high selectivity policies needed for entrepreneurially
underdeveloped environments• Provided facilities like creation of business plan, providing mentoring
support, promotion of success stories, having entrepreneurial
courses in curriculum, incentives for starting up, getting
entrepreneurs to set up in the region and chasing VCs• Gregory Gardiner, a former Pfizer executive took charge of Office of
Cooperative Research in 1982• An important goal for the Yale OCR was to identify new ideas,
cultivate venture funding for them, and facilitate their development
into companies that become part of the New Haven economy. • Increased exposure of researchers to commercial ideas• The renewed OCR established direct contacts with venture capital
firms. The goal was not only to persuade venture capital firms of the
relevance of university technology but also to convince them to
create ventures in New Haven
• High support–high selectivity policies needed for entrepreneurially
underdeveloped environments• Provided facilities like creation of business plan, providing mentoring
support, promotion of success stories, having entrepreneurial
courses in curriculum, incentives for starting up, getting
entrepreneurs to set up in the region and chasing VCs• Gregory Gardiner, a former Pfizer executive took charge of Office of
Cooperative Research in 1982• An important goal for the Yale OCR was to identify new ideas,
cultivate venture funding for them, and facilitate their development
into companies that become part of the New Haven economy. • Increased exposure of researchers to commercial ideas• The renewed OCR established direct contacts with venture capital
firms. The goal was not only to persuade venture capital firms of the
relevance of university technology but also to convince them to
create ventures in New Haven
Source: University Commercialization Strategies in the Development of Regional Bioclusters , Shiri M. Breznitz, Rory P. O’Shea, and Thomas J. Allen published in Journal of Product Innovation Management 2008