BMI Core View : Governments and companies in emerging markets are increasing investment in local biopharmaceutical R&D. Awareness is increasing of this sector of the industry's importance in promoting economic growth, fostering global competitiveness, and reducing the financial burden of disease on local citizens by improving access to innovative medicines.
Soo Whai-jen, managing director of Taiwan's Supra Integration and Incubation Center (SIIC), has said that the organisation plans to provide TWD50mn (US$1.7mn) to biotechnology start-up firms over [the next?]three years, and at least TWD$100mn (US$3.4mn) to qualified research institutes annually. There are currently 10 drug development and four medical equipment development cases under review. SIIC was inaugurated in November 2011 to allocate resources to the country's biotechnology and pharmaceutical industry, boosting its ability to develop new and innovative products.
While the news is positive for the sector, BMI believes that it is still only the initial phase of implementation, given that the centre has been operating for just over a year and that the country has had its plans for the biotechnology sector laid out since 2009.
We maintain our view that the country's biotechnology sector is lagging behind other regional players such as Singapore, South Korea and Japan. Latest statistics from the Council for Economic Planning and Development showed that overall research and development (R&D) expenditure in the country is rising, accounting for 2.9% of GDP in 2010. However, R&D expenditure in the medical sciences sector remained low, at TWD29.4bn (US$933mn), accounting for 7.5% of total R&D expenditure, and much lower than the TWD297.9bn (US$9.5bn) spent on the engineering R&D sector.
|Rising R&D Expenditure|
|Overall R&D Expenditure In Taiwan (LHS) & By Sector (RHS) (TWDbn)|
More importantly, the centre's plans to revitalise the sector comes at a time of increased interest from Asian countries looking to invest in biotechnology. For example, under China's Biotechnology Industry Development Plan, released in December 2012, the government intends to increase the competitiveness of the biopharmaceutical industry through various means, including the development of new treatments and medical devices . Similarly, the Japanese government announced in January 2013 that it will provide JPY110bn (US$1.2bn) for induced pluripotent stem (iPS) cells research over the next decade, among other polices .
We highlight that Taiwan will consequently have to compete intensely with these countries for foreign investments that, alongside the government's support, will help to boost its technology sector
In addition, we note that the country will have to speed up the development process of its own biotechnology (a challenging feat, given the nature of research), or risk falling behind should competing countries manage to advance quickly in their quest for innovation.
Nevertheless, we are seeing increased activities from Taiwan biotechnology sector, highlighting the growing appreciation of biotech innovation. Recent developments and interest in Taiwan's biotechnology and pharmaceutical industry include:
TTY Biopharm received drug manufacturing orders from Johnson & Johnson. TTY Biopharm will manufacture ovarian and breast cancer drug Doxil (doxorubicin liposome injection) for J&J. The manufacturing of the drug will be conducted on a contract basis. TTY also stated that it is aiming to start international shipments of the drug in September 2013.
According to the Ministry of Economic Affairs, Daiwa Securities Group of Japan and the National Development Fund under the Executive Yuan plans to invest US$100mn in the biotechnology sector.
Taiwan-based SHL Group stated that it is adding injection moulding capacity as part of a US$40mn investment in its Taiwanese factories. It added that the investment is driven by the rapid growth in biologic injectable market.
TWi Pharmaceuticals announced that Teh Seng Pharmaceutical, the manufacturing partner for its generic version of Lidoderm (lidocaine) was granted 'acceptable' status under the US Food and Drug Administration (FDA) regulatory guidelines.
 Business Monitor International - Industry Trend Analysis -Boehringer Ingelheim Establishes New Manufacturing Facility - June 11 2013.
 Business Monitor International - Industry Trend Analysis -Ageing Population: Downside Risk To Revitalisation - June 17 2013.