1

Sept. 2009.

High-Tech Industry Investment Promotion Team

2

3

FiberVeneer BoardWigs

Light Industry

Heavy Industry

Assembly & Process Industry

IT Industry

Biotech &the Green Industry

SteelMachineryChemicals

AppliancesShipbuildingAutomobiles

SemiconductorsComputersTelecom Devices

1960’s 1970’s 1980’s 1990’s 2000’s

: New Drug Development

: Medical-Healthcare

• No. 1 market share in DRAM, SRAM, LDII and NANO

• 11.3% share of the global market• Exports exceeded US$39billion

Semiconductors

Shipbuilding

• Exports reached US$30 billion in 2008• Ranked 1st globally in terms of new orders, order backlogs and volume of vessels built - 40% of all orders worldwide

• World’s 5th biggest producer for 3yrs with 5.6% share

• Exports amounted to US$33 billion• Foreign-invested tier-1 suppliers, 36.8% of all parts sales

Automobiles

Displays• No.1 market share in LCD, PDP and OLED displays ex. World TV market share : Samsung TV (13.6%-1st), LG Electronics (11.4-2nd)

• Major players: LG Display, Samsung Electronics, LG Electronics, Samsung SDI

Government Policy

4

The amount of the government‟s BT sector investment has been growing at a CAGR of 14.2%, and the Ministry of Education, Science, and Technology is investing much more into the BT sector than other main ministries

Source: Analysis Data of the National Research and Development Industry(‟04~‟07), Compilation of the Budget Result(‟08~‟09), 2007 Healthcare Industry White Book(KHIDI, 2008. 6), Postech Biotech Center, Annual Life Science Fostering Operation Plan Data

Government‟s Annual Investment in BT Sector

• The Korean government‟s BT sector investment amount has been growing at a CAGR of 14.2%,, faster than the CAGR of the government‟s total R&D investment amount, (11.7%)

11,062

21,452

18,390

16,08414,353

15,478

10.8%

13.7%

9.6%

13.9%

8.9%8.7%

0

8,000

16,000

24,000

32,000

40,000

'04 '05 '06 '07 '08 '09(E)

0.0%

3.0%

6.0%

9.0%

12.0%

15.0%

(Unit: KRW 100 Million)

CAGR (‟04~‟09)

11.7%Gov. Total R&D Growth Rate

14.2%BT Sector Invest-ment

(Unit: %)

Ministry Roles & Investment

(Unit: KRW 100 Million)

Section Roles ’07

’08

R&DEquip

ment/

Infra

Educa

tion

MW

Promotion of R&D,

business and research

on Biotechnology

267 1,680 - -

MIR

(MKE) Development and

improvement of

Biotechnology process

1,674

779 541 4MIC

(MKE)118

MST

(MEST)Strategic planning,

Development of HR,

Support for fundamental

bio-science & tech.

2,470

3,160 108 385MEH

(MEST)800

MIFAFF

Support for applied

research, and

fundamental research

842 907 8 6

Total 6,171 6,526 657 395

Government Policy

5

CAGR (’04~’09)

14.2%

5.6%

22.1%

23.4%

17.5%

13.6%

16.7%

21.3%

28.5%

2,647

1,613

2,210

2,667

3,346

6,367

5,074

15,156

11,062

2,962

2,103

3,117

2,494

4,226

6,262

5,565

20,430

14,353

2,909

3,375

3,479

3,670

6,625

9,175

6,520

17,657

15,478

3,037

3,736

3,862

3,902

7,586

8,530

7,529

21,217

16,084

4,015

4,639

3,735

4,008

8,797

13,083

11,728

18,989

18,390

5,003

5,658

5,793

5,980

9,561

13,763

13,767

19,898

21,452

2004 2005 2006 2007 2008 2009

Biotech

IT

Energy

Machines

Aerospace, marine

Materials, Nano

Basic sciences

Transport, Construction

Environment

(Unit: % total government R&D budgets)

Government investment in biotech is expected to increase further, ranking the BT sector as #1

among government R&D investments in 2009

Source: Investigation and Analysis of Governmental R&D projects (‟04~‟07), Result of the compilation of the budget (‟08~‟09)(Research on humanities and sociology, research on policy and HR investment are excluded from the total R&D investment)

Government Investments in 9 Tech Sectors (’04~’09)(Unit: 100 Million KRW)

Ranks 2004 2006 2008 2009

1 IT (21.4%) IT (19.8%) IT (17.1%) BT (17.4%)

2 BT (15.6%) BT (17.4%) BT (16.6%) IT (16.2%)

3 Machines (9.0%) Machines (10.3%) Machines (11.8%) Energy (11.2%)

4 Energy (7.2%) Aerospace, marine (7.4%) Energy (10.6%) Machines (11.2%)

5 Aerospace, marine (4.7%) Energy (7.3%) Aerospace, marine (7.9%) Aerospace, marine (7.8%)

Government Policy

6

• Total investment in 6T* increased to 10.7%, or KRW 6,174 billion in 2008. Investment into BT increased to KRW 1,726

billion (+14.6%), while that into IT decreased (-9.5%). It is now necessary to focus more on the investment in BT and

ET which create greater value.

• 2.9% of total R&D project investment is carried out via international collaboration.

It is necessary to increase international collaboration to build competitive international joint R&D activities.

* 6T: IT (Information Technology), BT (Biology Technology), NT (Nano Technology), ST (Space Technology), ET (Environment Technology), CT (Culture Technology)

IT1,726 17.5%

BT1,726 17.5%

NT507

ST802

ET1,346

CT67

Etc.3,662

2008IT 9.5%

BT 14.6%IT1,90821.8%

BT1,506 17.2%

NT419

ST596

ET1,082

CT62

Etc.3,198

2007

Investment in 6T (‘07, ‘08)

The sum of investment in BT increased to 1,726 billion won, + 14.6%. In 2008, BT has grown in importance in

terms of investment in 6T compared to 2007.

International joint-R&D type

joint-R&D

15,43554%

R&D13,16546%

Country

/

Region

Share

1 US 32.8%

2 Europe 14.3%

3 Japan 12.5%

4 China 5.8%

Etc. 34.6%

International joint-R&D, 2.9%

54%(15,435) of the total R&D projects(28,600) are being carried out via joint-R&D, while 2.9% of

joint-R&D is carried out by international collaboration.

Government Policy

7

Compared to other OECD members, Korea is rapidly becoming an aging society where both

quantity and rate of drug consumption are expected to grow as a result

9.5%

28.0%

90.5%

72.0%

0%

20%

40%

60%

80%

100%

Population % Drug Manufacturing Cost %

Below 65 yrs.

About 65 yrs. Old

% of population over 65 years which consumes drugs is 3 times over the population percentage (‟06)– The amount of drugs and the percentage of

consumption are expected to grow because of the increasingly aging population

Percentage of Population Over 65 Years and Drug Manufacturing Cost in 2006

Korea is becoming an aging society rapidly– The percentage of Koreans over 65 is expected to

reach about 13% by 2015– Time it takes for the % of those over 65 years old

to double

Korea Japan UK Sweden

18 yrs. 21 yrs. 46 yrs. 85 yrs.

Population Change

7.6 7.9 8.3 8.7 9.1 9.5 9.9 10.3 10.7 11 11.3 11.7 12.1 12.6 12.9

0

2

4

6

8

10

12

14

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

(Unit: %)Percentage of Population Over 65 Years

OECDAvg.

Korea

CAGR

3.8%

1.2%

Implications

Market Status

8

CAGR of healthcare expenditure to GDP in Korea is about twice higher (2.98%) than the OECD

average(1.62%), and also, the percentage of drug expenditure in total healthcare expenditure

(25.8%) is higher than the OECD average (17.6%)

CAGR of Healthcare Expenditure to GDP1) (’90~’06)

The CAGR of Health Spending from 1990 to 2006 is the highest of all OECD member countries with 2.98%

–Higher than the OECD average of 1.62%

(Unit: %)

1) The growth rate of Hungary is calculated from 1991, Netherlands with current cost, not with the total health spending, and New Zealand with current cost, not with the total health spending, from 2004

Source: OECD Factbook 2009, Pharmaceutical pricing in a global market (OECD, 2008), OECD Health Data 2008, Nemo Analysis

% of Drug Expenditure

in Total Healthcare Expenditure (’06)

25.8% out of Korea’s total health spending is being used as pharmaceutical spending

– One of the highest out of the OECD countries, following Slovak Republic, Hungary, and Poland

– Higher percentage than the OECD average of 17.6%

2.98

2.34

2.02 2.011.891.88

1.71.62 1.58 1.54

1.461.35 1.3

1.07

0.73

0

0.5

1

1.5

2

2.5

3

3.5

Kora

e

Czech

Republic

Sw

itzerla

nd

Mexic

o

Japan

New

Ze

ala

nd

Fra

nce

OE

CD

avera

ge

United S

tate

s

Germ

any

Austr

alia

Neth

erla

nds

Irela

nd

Hungary

Canada

OECD17.6%

KOREA25.8%

Market Status

9Market Status

Among various types of disease in the Korean market, the growth rate of cardiovascular ailments, CNS, diabetes, and oncology/cancer are the highest, taking 95% of chronic diseases caused by aging

Source: Korea Pharmaceutical Manufacturers Association Statistical Yearbook (2006) and Statistics Archives (1999-2005)

Market Size for Main Diseases

Chronic Diseases with High Growth Rate

1.6%

6.6%

∆ M/S

‟99~‟05

-2.8%

-1.5%

-4.3%

-1.1%

-0.6%

-0.7%

2.2%

0.3%

1,960

1,758

1,625

1,257

694

512

398

257

247

135

663

78

227

229

359

387

1,002

1,010

800

1,591

Production Trends (Unit : KRW Billion)Area

Anti-Infective (Antibiotics/Antiphrastic/

Chemotherapeutic/Vaccine)

Neurological

Cardiovascular(Hypertensions/Arteriosclerosis)

Gastrointestinal

Other Metabolic agents(Diabetes)

Nutrients/Tonics

Respiratory

Dermatological

Vitamins

Oncology/Cancer

Market Share

‟99 ‟05

23.1%

11.6%

14.6%

14.5%

5.6%

9.6%

5.2%

3.3%

3.3%

1.1%

20.3%

18.2%

16.8%

13.0%

7.2%

5.3%

4.1%

2.7%

2.6%

1.4%

2005 1999

10.3%

14.0%

CAGR

‟99~‟05

3.5%

3.9%

-4.2%

1.7%

1.9%

1.4%

8.2%

9.5%

• Generally, hypertension, high cholesterol, arteriosclerosis, diabetes, cancer, etc., are the most prevalently cured chronic diseases. These chronic disease are categorized by their medical treatment area rather than the condition of the disease, and out of those diseases mentioned above, „cardiovascular‟, „CNS‟, „other metabolism disease‟, „anti-cancer medicine‟ sectors are more are 95% of main chronic disease of aging population

10Market Status

In spite of the Government‟s ongoing Drug Price1) Control Policy, the bio/pharmamarket is continuously growing based on the demand of aging population, increasing number of patients with chronic diseases, etc.

553 546589

570

208 212

251275

0

200

400

600

'04 '05 '06 '07

Number of Companies Amount of Production

1) Cost of pure insurance drugs that does not include medical charge(charge provided to provider of the medical service, like doctors and pharmacists) or manufacturing cost, etc.,

Source: KPMA

(Unit: # of Companies)

11,472,803

12,598,207

10,598,501

9,637,362

835,004

791,768823,113

815,255

0

5,000,000

10,000,000

15,000,000

'04 '05 '06 '07

(Unit: KRW Million)

• Drug manufacturing sector is showing externally satisfactory growth, in spite of the Government‟s ongoing Drug Price Cost Control Policy in 2007, started in 2006, because of increased medical supplies concerning the insurance deficit finance

• Quasi-drug manufacturers‟ sector production size is relatively small compared to that of the drug manufacturer, and thus, annual production levels are being maintained without any fluctuation

Production Changes by Medical Supplies Manufacturing Classification

Drug manufacturer Quasi-drug Drug manufacturer Quasi-drug

11Market Status

Production levels rank that is classified according to each therapeutic category is antibiotics,

fever pain killers, depressants, circulation system related drugs, respectively, and out of

theses, depressants increased about 19% and arteriosclerosis drugs 46% compared to the

last year

(Unit: KRW Million, %)

The increased rate of depressant, sclerosis of the arteries related medicine, etc., seems to be caused by entering into the aging society and an increase in the types of diseases found in adults in developed countries

Source: KFDA, 2008

Actual Annual Output of Main Medicinal Category

Rank Medicinal Category 2006 2007 2008Increased Rate

(‘07-’08)

1Antibiotic Medicine

(operating mainly in gram-positive ad gram-negative)1,080,141 1,067,575 1,122,279 5.12

2 Fever, Pain, Antichloristic Medicine 748,095 784,590 874,554 11.47

3 Depressants 664,759 657,933 780,600 18.64

4 Other Circulating System Medicine 738,409 725,152 726,747 0.22

5 Peptic Ulcer Related Medicine 462,034 583,893 650,621 11.43

6 Other Chemotherapy Medicine 401,248 437,769 553,720 26.49

7 Sclerosis of the Arteries Related Medicine 385,736 378,506 552,770 46.04

8 Others Digestive Organ Related Medicine 310,592 362,777 392,777 8.25

9 Blood Medicine 349,532 384,287 384,287 2.31

10 Others Metabolism Related Medical Supplies 273,815 336,591 336,591 9.33

12Market Status

Out of top 20 companies measured by the total production in 2008, Dong-A Pharm., Hanmi

Pharm., Daewoong Pharm., Handok Pharm. ranked at the top four, in that order. These top

four companies’ total production amounted to 48.8% of the market’s total production in 2008

(Unit: KRW Thousand, %)

Source: KFDA 2008

Top 20 Actual Outputs of Domestic Pharmas

Rank Company NameComplete

Drugs

Raw

MaterialsTotal

Mkt.

Share

Acc.

Mkt

Share

1 Dong-A Pharma 698,955,872 21,017,971 719,973,843 5.2 5.2

2 Hanmi Pharma 579,630,532 - 579,630,532 4.2 9.4

3Daewoong

Pharma567,061,297 - 567,061,297 4.1 13.6

4 Handok Pharma 509,250,143 - 509,250,143 3.7 17.3

5 Yuhan Corp. 453,860,651 - 453,860,651 3.3 20.6

6Choongwae

Pharma395,198,770 16,947,838 412,146,608 3.0 23.6

7 CJ 352,302,995 13,103,164 365,406,159 2.7 26.2

8Chong Kun

Dang349,524,742 - 349,524,742 2.5 28.7

9 Il Dong Pharma 328,110,960 7,062,125 335,173,085 2.4 31.2

10 Green Cross 303,000,346 10,118,766 313,119,112 2.3 33.5

11SK Chemicals

Life Science280,313,696 10,010,800 290,324,496 2.1 35.6

RankCompany

Names

Complete

Drugs

Raw

MaterialsTotal

Mkt.

Share

Acc.

Mkt.

Share

12Dong-Wha

Pharma255,937,560 - 255,937,560 1.9 37.4

13 Jeil Pharma 198,503,535 17,733,756 216,237,291 1.6 39.0

14Bukwang

Pharma212,506,298 - 212,506,298 1.5 40.5

15LG Life

Science194,772,640 7,472,999 202,245,639 1.5 42.0

16Janssen

Korea198,414,546 - 19,8414,546 1.4 43.5

17SAMJIN

Pharma194,057,969 934,072 194,992,041 1.4 44.9

18Boryung

Pharma192,428,855 381,387 192,810,242 1.4 46.3

19

Berna

Biotech

Korea

179,604,041 5,472,392 185,076,433 1.3 47.6

20

Red Cross

Blood Service

HQ

147,305,643 18,834,197 166,139,840 1.2 48.8

Total 6,590,741,091 129,089,467 6,719,830,558 48.8

13Market Status

ETC drug market, taking 84% of the total Korean market, has been leading the growth of

domestic pharma industry and is forecasted to grow more in the future because of its high

CAGR, 14%

• The domestic market size in 2008 is KRW 10.846 trillion– ETC drug market size is KRW 9.1555 trillion (84%), OTC

drug market is KRW 1.6904 trillion (16%)

• Unlike the sales of ETC which are rising, those of OTC are declining every year– In 2-3 years, the ratio of special drugs and general drugs

is expected to grow to 9:1

Source: KPMA, Nemo Analysis

OTC Drugs ETC Drugs

Company

Name

’08

Sales

Market

Share

Company

Name

’08

Sales

Market

Share

1Dong-A

Pharma1,052 6.22% Sanofi-Aventis 3,844 4.20%

2 Yuhan Pharma 820 4.85% Pfizer Korea 3,731 4.08%

3Dong-Wha

Pharma804 4.76% GSK 3,612 3.95%

4Il Dong

Pharma777 4.60%

Dong-A

Pharma3,536 3.86%

5 Hami Pharma 745 4.41% Novartis 3,289 3.59%

6Daewoong

Pharma674 3.99% Hanmi Pharma 3,228 3.53%

7 Bayer Korea 493 2.92%Daewoong

Pharma3,181 3.47%

8Kwang Dong

Pharma484 2.86%

Choongwae

Pharma2,934 3.20%

9Bukwang

Pharma400 2.37% MSD Korea 2,654 2.90%

10Boryung

Pharma355 2.10% Yuhan Pharma 2,592 2.83%

Total 6,604 39.07% Total 32,601 35.61%

Domestic Sales (’05 – ’08) Top 10 Companies for Drug Sales

(Unit: KRW 100 Million)(Unit: KRW 100 Million)

17,901 17,957 17,235 16,904

72,000

61,023

91,555

83,400

0

50,000

100,000

'05 '06 '07 '08

OTC (‟05~‟08) = -1.89%

Total Sales :KRW 10.846 Trillion

14

Korea“Gatewayto Asia”

As the Gateway to Asia, Korea provides opportunities to diversify business portfolios and

develop new therapies including stem cells and gene therapies

Prevalent Diseases

– High attack rate of liver, stomach cancer in Korea

– Disease pattern similar with developed countries (USA, EU)

Ethnic Sensitivity

– Drug‟s efficacy for cancer in Asian

– Representative for Asian country as important spot

High edge technology in the field of stem cells

– Cha-bio tech company

- One stop system with Seoul CRO for stem cell R&D

- Bio bank and cell medication- R&D pipeline for embryo, adult stem cell

Gene Therapy Area

– Global standard gene recombination / transfer technology

Test Bed of Asia

New Therapy Specialty

Agreement with Adjacent Countries– Activation for partnership among Korea, China, Japan

Authority in Korea– Similarities in genetic polymorphism between Korean

and Chinese (China‟s pivotal regional trial country)

– Japanese authorities accept data from Korea

Gateway to

China/ Japan

1

2

3

1/5 World GDP

1/3World Population

Average Growth Rate(Asian Countries but Japan)

8.7%

World: 5.2%, OECD: 2.7%

India

MalaysiaSingapore

Pacific Ocean

China

Russia

Republic of Korea

Beijing 1.5 hrsVladivostok 2hrs

Shanghai 1.5hrs

Hong Kong 3hrs

Northeast Asia is home to 1/3 of the world’s population.

Northeast Asia’s GDP = 20% of global GDP (30% by 2020)

Region’s purchasing power is equal to that of the United States

61 cities with population over 1 million within 3 hours

R&D Infrastructure

15

Most major hospitals are in the metropolitan areas, reachable in one hour, and cost effective to conduct clinical trials

1) Clinical Research Associate

Pre-ClinicalRegional Clinical Trial Centers

(12 sites)

CRO

Korea Institute of Toxicology(Daejeon / Jeongeup)

Biotoxtech (Cheongwon)

Chem-on (Yangji / Suwon)

Seoul Nat’l Univ. Hospital1

2

3

4

5

6

7

8

9

10

11

12

1

2

3

1

2

3

Dream CIS (Seoul)

C&R Research (Seoul / Busan)

Seoul CRO (Seoul)

Battelle ISS research institute(Chun cheon)

41

2

3

3

1

1

2

3

34

5

6

78

9

10

11

121

4

2

Inje Univ. Hospital

Yonsei Univ. Hospital

Ajou Univ. Hospital

Kyungpook Nat’l Univ. Hospital

Chonnam Nat’l Univ. Hospital

Asan Medical Center

Catholic Medical Center

Chonbuk Nat’l Univ. Hospital

Samsung Medical Center

Chungnam Nat’l Univ. Hospital

Inha Univ. Hospital

CRAs1) go to any part of Korea, complete monitoring, and return home in one day.

CRAs are all centrally located, and can be supervised more readily.

Patients come to hospitals in Seoul from remote areas, and return home in one day.

R&D Infrastructure

16

Korea’s Bio Clusters are established in major cities and are all connected, forming one national

cluster within one hour’s distance by air

One Hour

(Airway)

1

2

3

4

56

7

Regional Clinical Trial Center

Pre-Clinical

Medical Cluster

ClusterValue Chain

Area (m2 unit: 10 thousand)

Enterprise InstituteDevelopment

Period

Osong Bio-Health Science

Technopolis

Pharma. > R&D

• 4.63 km2

– Public Inst. (1.45 km2)– Production Inst.(1.65 km2)– Research Inst. (0.43 km2)

• 23 Ent.– 17 Pharm.– 5 Medical

Instruments– 1 Others

• 6 Inst.– KFDA– Toxic

Academy of Science

– 4 Others

• Period: ’97~’10• Investment: 805.9 billion won

Daedeok Innopolis

R&D

• 70.4km2

– District I : Daedeok Research Inst. (2.78 km2)

– District II :Daedeok Techno Valley (4.3 km2)

– District III: Daejeon Industry Complex (3.2 km2)

• 713 Ventures • 70 Inst.– 21 Donations

• 39 Private– 10

Investments

• Period :’05~• Investment:146.5 billion won

Wonju Medical Instrument

Cluster

Production > R&D

• 391,031 m2

– Donghwa Medical Instruments (330,580 m2)

– Medical Instruments Complex (33,007 m2)

– High-tech Medical Instruments Venture Center (13,722 m2)

– High-tech Medical Instruments Techno Tower (13,722 m2)

• 62 Small and Medium Ent.

• 37 Establishment Nurturing Ent.

• High-tech Medical Instrument Techno Tower/ Venture Center

• Period :’98~’14• Investment

: 54.2 billion won

Daegu Medical Cluster(Pohang)

R&D > Production

• 30,800 m2

–Life Science Research Center (aprox 14,000 m2)

–Life Science Hall (aprox 7,600 m2)–Chemistry Hall (aprox 9,200 m2)

• Approximately 50 Venture Businesses

• 126 Inst. • Period :’09~’38

GwanggyoTechno Valley (Gyeonggi Bio

Center)

R&D

• 31,967 m2

– 15 stories above ground and 2 under

• 27 Venture Businesses

• 5 Inst.– Ajou Univ.– Cell Medical

Treatment Center

• Period :’04~’07• Investment

:79.6 billion won

Incheon Bio-Medical Hub

Medical Service >

R&D

• 2.48 km2

– Medical Service (0.42 km2)– Medical Supplies (0.24 km2)– Medical Instrument (0.21 km2),– Dielectric Center(70,000 m2 )– Regenerative Medical Science

Center(30,000 m2)

• Bio company like Celltrion, etc.

• Intl. Business Center

• IT Business

• 30 BIO Venture Business Inst.

• Planning

1

2

3

4

5

6

R&D Infrastructure

Two Hours

(Railway / KTX)

17

Korea outnumbers Japan and China in the number of clinical trials, recording 216

international cases and 184 domestic cases in 2008

Source: Biotechnology White Paper (2007), KFDA (2009)

No. of Korean Clinical Trials by Year and Sponsor

42 31 28 27

38

97 75

90 110

134

184

518

17

46

61

95 108

148

216

0

200

400

'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08

Local

Interna-tional

(Unit : No. of Clinical Trials)

3 10 13

72 7470

193

31

6153

18

0

10

20

30

40

50

60

70

80

'02 '03 '04 '05 '06 '07 '08

No. of application

No. of approval

160

115104 95

7154 52

6343

60 60 56

96

0

50

100

150

200

250

300

'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05

1845 57 42 42 42 31 28 27 38

9775 90

5 1817

4661

95

# of Clinical Trials (IND) Japan vs. Korea

Since 1993, the number of clinical trials has steadily increased in Korea, while in Japan they have decreased

Korea(international)

Korea(local)

Japan(First IND)

Japan Korea

3345

55

143136

185

218

282

400

# of Multinational Trials in China from 2002 to 2008

Although China is expected to catch up in the future, at present Korea is more active in multinational trials than China

R&D Infrastructure

18

Korean human resources in biotechnologies have grown to world-class level and are

reliable, due to government support, westernized curriculum and studies in the US

Bio vision 2016 “Rank 7th worldwide in life science”

– Investment of 14,288 billion won is planned

HighlyMotivated

Most investigators are trained in the US for 2-4 years

Motivated to participate in global trials and well versed with GCP

WesternizedCurriculum

Global research program KOSEF1)

– Increase number of professors hired by US colleges

Matured attitude of research makes excellent results

Post-Doc in the U.S.

TranslationalResearch

Work Ethic&

Compliance

1

2

3

4

5

Korean doctors and investigators actively engaged in medicalresearch until retirement

Integration of BT-IT-NT research activities aiming at „Intermediary research system‟

– Cooperation with IP-K(Institute Pasteur Korea)

Business mind based on trust and higher reliability of data than other Asian countries

High compliance with advanced GCP standards

1) Korea Science and Engineering Foundation 2) Institut national de la santé et de la recherche médicale - Inserm (France National Institute for Health and Medical Research)Source: Global Networking Trend and Implications for Bio Industry Development (KIET,‟07.12)

R&D Infrastructure

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Focus on the Drug Development AreaBy R&D Functions

8,896

11,243

6,774

10,365

9,596

12,096

0 8,000 16,000 24,000 32,000 40,000

2007

2017(E)

Over one-half of biotech human resources are dedicated to drug development and

basic research is expected to grow relatively fast in the future

25,266

33,704

10,236

15,4668,721

14,372

0

14,000

28,000

42,000

56,000

70,000

2007 2017(E)

(Unit: Person)

Share of drug development area exceeds othersBasic research area is expected to grow more

rapidly at a CAGR of 5.1%

BasicResearch

Medical Research

DrugDevelopment

63,542

44,223

(57%)

(23%)

(20%)

(53%)

(24%)

(23%)

CAGR(E)

5.1%

4.2%

2.9%

(Unit: Person)

R&D HR in preclinical and clinical step of drug development are expected to increase more rapidly than others (CAGR of 4.3%)

DiscoveryPre-Clinical/ Clinical

Manufacturing // Preparation

33,704

25,266

(33%) (31%) (36%)

(35%) (27%) (38%)

2.4% 4.3% 2.3% CAGR(E)

Expected Growth of R&D Human Resources (`07 ~ `17)

Source: Health Care Industry Report (1st edition of 2008, KHIDI), Nemo Analysis

R&D Infrastructure

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Patents in biotech have increased rapidly and Korea is ranked 2nd in Asia

1) Technological Strength (TS) = (no. of patents) X (no. of quotations), 2) Ranked by „TS‟Source: Biotech Policy Research Center, Patent 21 (Korea Institute of Patent Information, 2009)

Patents and Technical Strength of Korea

Trends in Korea (’94~’08)

(Unit: # of patents)

(Unit: point)

0

350

700

`94~`97 `98~`01 `02~`06 `07~`08 `94~`08

0

150

300

`94~`97 `98~`01 `02~`06 `07~`08 `94~`08

Patent

TS1)

13

91

258293 293

78

167

35

47 178

312

109

225

537646 646

World Ranking (’08)

Rank2) Country TS # of Patents

1 US 2908.80 2,424

2 Japan 243.39 399

3 Germany 104.94 198

4 Canada 98.28 117

5 Swiss 60.48 72

6 UK 56.95 85

7 France 51.00 100

8 Denmark 42.30 47

9 Belgium 34.44 41

10 Netherlands 34.10 51

14 Korea 16.50 55

… … … …

R&D Infrastructure

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1) Sorted papers relevant to biotechnology and written by South Koreans from all of papers published on NSC (Nature, Science, Cell)

Source : KRIBB (Korea Research Institute of Bioscience and Biotechnologies, KRIBB, KAIS

Korean scientists in biotech have rapidly increased the contributions of research

papers, particularly to Nature, Cell and Science

The Number of N·S·C publications1) (’94~’07) Average Citation Intensity of Paper (’07)

Citation Intensity of Korean BT paper is growing faster than the average of all countries

01

01

0

32 2 2

5

1

54

5

0

11

22

3

2

64

4

5

13

7

9

0

00

00

1

1

35

2

4

2

7

5

420

933

1,343

1,479

1,820

2,137

2,495 2,651

2,875

3,297

3,894

4,089

4,539

4,909

0

5

10

15

20

25

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07

(Unit :the number of papers)

Science

Nature

Cell

SCIE papers of Korean BT (’94~’07)1)

1918

23

10

111111

5

7

2

3

12

0

’94~’97 ’98~’01 ’02~’05 ’06~’07

Korea Average

Global Average

5.00

0.00

4.00

3.00

1.00

2.00

‟97~‟01 ‟98~‟02 ‟99~‟03 ‟00~‟04 ‟01~‟05 ‟02~‟06

(Unit :the number of citation)

R&D Infrastructure

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14 new drugs of Korean bio & pharmaceutical companies have been approved (‘01~08)

Source: Industry·Academy Co-study Cooperation Plan for Improvement of Organizational Reform in Pharmaceutical Industry (STEPI, 2006), Domestic Drug Approvals(KFDA, 2008), National BT‟s Progress Plan and Prospect (Eunhee Bae, member of National Assembly, 2009), 2008 Directory of Pharma (KHIDI, 2008), 2008 Overview of Bio-Venture (MKE / Korea Bio Venture Association), Korea Drug Research Association 2009, NemoAnalysis

New Drugs Approved by Korean Bio & Pharmaceutical Companies (’09)

NO CompanyProduct

Name

Specific

IndicationCategory

License

Date

1Dong Wha

Pharm. Co., LTD.Millican Inj. Liver Cancer Radiation ’07.05

2Chong Kun Dang

Pharm.

Camtobell

Inj.

Ovarian

Cancer, Lung

Cancer

Chemical ’04.03

3 SK Chemicals Sunpla Inj.Stomach

CancerChemical ’99.07

4Guju Pharm. Co.,

Ltd.Apitoxin

Rheumatism,

OsteoarthritisNatural ’03.06

5Daewoong

Pharm. Co.

EGF Topical

Solution

Glycemic

Ulcer and

wound by

diabetes

Bio ’01.05

6Daewon Pharm.

Co.Pelubi Osteoarthritis - ’07.04

7Dong-A

PharmaceutcalZydena Tab.

Erectile

DysfuctionChemical ’05.11

NO CompanyProduct

Name

Specific

IndicationCategory

License

Date

8Bukwang

Pharma.Levovir Cap.

Chronic

Hepatitis BChemical ’06.11

9 Yuhan Pharm REVANEX Tab. Anti-Ulcer Chemical ’05.09

10Il-Yang Pharm.

Co., Ltd.

Noltech

(Ilaprazole)

Anti-Gastric

Ulcer (Protein

Pump

Inhibitor)

- ’08.11

11Choonwae

Pharma. Corp.Q-roxin Tab.

Antibiotics

(Urinary

Infection)

Chemical ’01.07

12 CJPseudovaccine

Inj.

Prendomonas

Infection

Prevention

Bio ’03.09

13 LG Life ScienceFACTIVE

Tab.

Antibiotics

(Chronic

Respiratory

Disease)

Chemical ’02.11

14 SK Chemicals MVIXErectile

Dysfunction- ’07.07

R&D Infrastructure