25th

February 2009

Hong, Choong

Wan

Biotech and Nanotech Division

Ministry of Knowledge Economy

2

Contents

2. 2.

3. Korea3. Korea’’s s BioindustryBioindustry

–– OpportunitiesOpportunities

4. Vision and Policy Direction4. Vision and Policy Direction

1. Why 1. Why BioindustryBioindustry??

Bioindustry Overview and Policies

5. Policy Tasks5. Policy Tasks

3

Future Trends

New Technology Paradigm

1. Why Bioindustry?1. Why Bioindustry?

4

글로벌화글로벌화

Supports health and longevity by utilizing cutting-edge technologies.

Supports health and longevity by utilizing cutting-edge technologies.

Overcome environmental challenges by utilizing biomass, commercializing biotech, etc.

Overcome environmental challenges by utilizing biomass, commercializing biotech, etc.

Potential to Meet Potential to Meet Human NeedsHuman Needs

LowLow--Carbon, Carbon, Green GrowthGreen Growth

The bioindustry is a knowledge-based industry that creates value-

added and has great potential to meet the needs of a future society.

The bioindustry is a knowledge-based industry that creates value-

added and has great potential to meet the needs of a future society.

Future Trends

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* Richard Oliver, author of The Coming Biotech Age, called biotechnology the Fourth Wave, the Third Wave being IT.

* Richard Oliver, author of The Coming Biotech Age, called biotechnology the Fourth Wave, the Third Wave being IT.

New Technology Paradigm

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2. Bioindustry Overview and Policies2. Bioindustry Overview and Policies

Bioindustry Trends

Bioindustries in major countries

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2004 2020

$540 billion(USD)

$1.3 trillionAnnual Average Growth

2006

$600 billion

Sustainable growth technologies (e.g. biorefining)

Significant GrowthSignificant GrowthSignificant Growth New Technologies via ConvergenceNew Technologies via ConvergenceNew Technologies via Convergence

High Risk, High Value-addedHigh Risk, High ValueHigh Risk, High Value--addedadded Low-Carbon, Green GrowthLowLow--Carbon, Green GrowthCarbon, Green Growth

0

New technologies

arising from the

convergence of

cutting-edge

technologies such

as IT, NT

Electronics

Machinery Chemicals

NTNT

ITIT

Bioindustry Trends

Development of new medicines

is a lengthy, costly process.

Annual value-added of one new medicine

= export of 3 million cars

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By concentrating investment in biotechnology, countries are seeking solutions to concerns about energy, environment and aging populations.

By concentrating investment in biotechnology, countries are seeking solutions to concerns about energy, environment and aging populations.

Bioindustries in Major Economies

Policies established at the federal and state levels to foster the bioindustry on the basis of

world-leading technological competitiveness.

In 2005, the U.S. accounted for 75.7% of global imports, 78.3% of global R&D in the bioindustry.•

State governments continue to increase investment in biotechnology.

•

Federal government recently increased support for stem cell research and alleviated regulations.

Has established an EU-wide development strategy emphasizing simultaneous pursuit of

cooperation and competition.

Implementing the seventh Framework Program (2007 to 2013, 9.52 billion euros in investment)•

Focusing on bioenergy in a new strategy to reduce dependence on oil.

Has expedited collaboration among industry, academia and research centers through a biotech

commercialization strategy.•

Stressed the need to develop and commercialize new medicine in its New industry Creation Strategy (May

2004) and Science and Technology Basic Plan for Phase III (2006-2010).

•

Adopting a pragmatic approach to R&D, fostering translational research and clinical research alongside cutting-

edge research.

Government to foster nine core areas in an effort to become a biotech stronghold. •

Announced Biotechnology Development Master Plan in September 2005: Nine core areas have been identified

including agriculture, drugs, food and energy.

•

Plan to set up biotech clusters in Beijing, Tianjin, Changjiang Delta, Pearl River Delta, etc.

Measures TakenMeasures Taken

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Status of Korea’s Bioindustry

Assessment of Issues

Opportunity: SWOT Analysis

3. Korea3. Korea’’s Bioindustry s Bioindustry

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Production in 2008 was about $3.9 billion (Global market size : $124 billion)-

Annual growth rate from 2006 to 2008 stood around 19.7%

Government investment(‘08) was 920 billion won

-

8.5% of the total government R&D budget (10.8 trillion won)

cf.) US(22.5%), Japan(18%)

Businesses are small and the market has no leading companies or significant

investment.

Market SizeMarket SizeMarket Size

Investment and Industrial StructureInvestment and Industrial StructureInvestment and Industrial Structure

Korea’s level of technology is only about 60 to 70% of that seen in advanced

countries.

Nevertheless, the industry has made many achievements in a short

time and

shows great potential.

Technological CompetitivenessTechnological CompetitivenessTechnological Competitiveness

Status of Korea’s Bioindustry

Weak Global Network Weak Global Network Weak Global Network

Korean companies lack a strong global network

comparing with world’s global company.

- only 6 applications to the U.S. FDA for clinical trials of their products.

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Total investment size of Korea government in

bioindustry is smaller than that of one representative

global company.

* R&D investment(‘08) : Korea government -

$900 million,

Pfizer -

$8000 million

Low InvestmentLow InvestmentLow Investment

Issues

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Issues

Industrial ecosystem has not formed in place to facilitate

bioventure companies.

Despite the growth of the market, most growth was in food

biotechnology. -Production share (2006): food biotechnology 43%, biopharmaceuticals 39%,

biochemical technology 6%

Insufficient infrastructures to commercialize research results

through professional services such as CROs and CMOs.

Weak Industrial BasisWeak Industrial BasisWeak Industrial Basis

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•

Advanced technology in the synthesis and

manufacture of biopharmaceuticals

•

Abundance of researchers with skills in

basic biotechnology

•

Over 20 years of experience in drug

development

•

Export of numerous technologies regarding

bio-candidate substances

•

Weak globalization of bioindustry

•

Lack of advanced infrastructure

•

Insufficient number of specialists

•

No joint research system in place

among academia, research and

industry

•

Potential to expand market in consideration of aging population and other factors

•

Increasing expiration of patents has opened up the biosimilar market

•

Well-established base for convergence with IT, chemical and other related industries

•

Potential to enter global market in collaboration with multinationals

•

Competition from China and India, which

have an edge in price competitiveness

•

Insufficient M&As and partnerships

among Korean companies

•

Dependency on overseas partners to

conduct clinical trials

•

Strong presence of multinationals in

Korean market

Opportunity: SWOT Analysis

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5. Vision and Policy Direction5. Vision and Policy Direction

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Vision and Strategy

To achieve bioeconomy society with healthy lifestyle7th leading country in bioengineering by 2015

Competitiveness in patented tech.

Nurture core researchers

Create industrialized market(production)

14th

in 2005 7th

10,000 researchers 17,000

3.9 billion won 60 billion won

2015201520082008

Goals

Strengthen regional and

global cooperation

Strengthen regional and

global cooperation

Red Bio White Bio

Global Bio

Promote

biochemical industry

Promote

biochemical industry

Pursue core R&D to produceworld-classproducts

Pursue core R&D to produceworld-classproducts

Establish infrastructure& nurture

human resources

Establish infrastructure& nurture

human resources

Revise regulations and lay a solid foundation for

business

Revise regulations and lay a solid foundation for

business

* Based on the 2nd

basic plan to promote bio-engineering

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Pursuit of Essential R&D Projects

Development of Regional Bioindustry

Development of Biochemical Industry to Replace Petrochemical

Industry

Vitalization of Biotech Businesses

Development of Human Resources

6. Policy Tasks6. Policy Tasks

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Strategic technology development (in 2008, 34.6 billion won),

Biostar project (in 2008, 12.8 billion won)

Facilitate development of core and source technologies and commercialization of technologies in pre-clinical and clinical stages

Facilitate development of core and source technologies Facilitate development of core and source technologies and commercialization of technologies in preand commercialization of technologies in pre--clinical and clinical stages clinical and clinical stages

Diagnosis :

Develop a small, affordable mass spectrometer and a system

to detect diseases at an early stage

Treatment : Develop embryonic and placental stem cell drugs and gene drugs

Materials : Develop body-friendly, next-generation implant technology

Pursue essential R&D projects to foster new growth engines in connection with MKE’s Technology Development Support Road Map

Pursue essential R&D projects to foster new growth engines Pursue essential R&D projects to foster new growth engines in connection with MKEin connection with MKE’’s Technology Development Support Road Map s Technology Development Support Road Map

Pursuit of Essential R&D projects

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Foster specialized regional biotech centers

while promoting biopharmaceutical businesses in Chungcheong provinces. -

High-tech (Daejeon, Chuncheon), health supplement industry (Yeongdong, Naju), Korean medicine (Jecheon, Daegu)

Through 20 regional centers, provide necessary education to start up

businesses and create jobs.

Specialized Bioindustry ClusterSpecialized Bioindustry ClusterSpecialized Bioindustry Cluster

Enhance regional and global networks.

-

Through Korea Bio-Hub center

Enhanced Network Among Different ClustersEnhanced Network Among Different ClustersEnhanced Network Among Different ClustersRegional Bioindustry ClustersRegional Bioindustry Clusters

Development of Regional Bioindustry

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R&D investment in biorefinery tech. (08-12, 12.5 billion won)

and bioplastics

& 2 additional projects will be supported in 2009.

Establish biorefinery pilot plants,

with joint efforts by industry, universities and research centers.-

Cooperation with local governments to utilize existing petrochemical complexes.

Development of Environmentally Friendly Products Utilizing Biomass and BiotechnologyDevelopment of Environmentally Friendly Products Utilizing BiomDevelopment of Environmentally Friendly Products Utilizing Biomass and Biotechnologyass and Biotechnology

Development of Biochemical Industry to Replace Petrochemical Industry

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Offer support to promising biotech companies by utilizing the Biofund*

* To be established in 2009, 100 billon won

Support for InvestmentSupport for InvestmentSupport for Investment

Build Medical multi-complex

-

Global R&D hub in medical industry, support research for new medicine

-

Invest 5600 billion won by 2027

-

select 1~2 regions in 2009

Support for infrastructureSupport for infrastructureSupport for infrastructure

Support the commercialization and export of biotechnology

-

cGMP-based drug production facilities (Songdo Techno Park)

- a Medical Industry Overseas Marketing Support Center (KOTRA.)

- Exhibition & Confernece (Biokorea, Global Biotech Forum)

Support for ExportsSupport for ExportsSupport for Exports

Vitalization of Biotech Businesses

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Nurture top researchers by opening specialized graduate schools * 2 schools, 800 million won in 2009

- Establish master’s and Ph.D. courses in collaboration with industries (medicine,

biotech), academia and research centers to converge IT, nanotech and biotech

ResearchersResearchersResearchers

Foster specialists in areas where demand is rising rapidly, such as

cGMP, quality management, biomaterial manufacturing, etc. * 1.48 billion won in 2009

SpecialistsSpecialistsSpecialists

Development of Human Resources

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