Asia-Pacific Region Vies For Biotechnology Industry Opportunities

Hong Kong – A recent conference here looked at the evolving biotechnology landscape in the Asia-Pacific region as well as prospects for networking and raising capital for early stage life science innovation.

The Asia Biotech Invest 2013 conference gathered about 200 participants in Hong Kong from 3-5 June.

The event featured presentations from 17 biotechnology companies based in Australia, Hong Kong, France, New Zealand, and the United States. The showcased projects introduced R&D pipelines aimed at the development of new molecules as well as technology platforms with potential multiple applications in various areas of therapeutics, immunology and diagnostics.

The investment and financial sector was represented by private equity investors, venture capitalists, major pharmaceutical companies, stock exchanges, business analysts, consulting and law firms.

Panels and keynote presentations by industry experts including senior executives of pharmaceutical companies, legal consultants, institutional investors and stock exchanges explored facets and complexities of biotechnology industry; global trends and challenges of the biotechnology and pharmaceutical markets; macroeconomic factors impacting the industry and investment environment; Asia’s regulatory environment for innovation and investment; capital raising, market penetration and growth strategies for biotechnology companies and risk mitigation strategies for investors.

The Pitch for HK

Hong Kong has taken steps to promote the development of innovation and technology industries by the government of the Hong Kong Special Administrative Region (HK SAR) (see the 2013 Policy Address of the HK SAR, a national strategy paper defining major policy initiatives, here [pdf]).

The vision of Chun-Ying Leung, chief executive of the HK SAR, to develop Hong Kong into a high-tech hub was highlighted by Prof. Albert C.H. Yu, chairman of HKBIO in his keynote speech. He also cited Forbes Magazine, which recently named Hong Kong among the top tech hubs in the world.

Conference participants highlighted Hong Kong’s geopolitical position in relation to China. For instance, under the China and Hong Kong Closer Economic Partnership Agreement, companies established in Hong Kong have preferential access to the Mainland China market. Further economic opportunities are associated with the Pearl River Delta project intended to facilitate economic cooperation between Hong Kong and the Mainland China.

Speakers also spoke on increasing biotechnology R&D activities and investor attention to the greater Asia Pacific region.

Many pharmaceutical companies choose to run pre-clinical studies and conduct clinical development work in the Asian countries. Investors shared the opinion that a company’s presence or, at least potential presence in the Asian markets – especially China – is one of the crucial factors for investment decision-making.

Trends

Among the key factors influencing the industry landscape, speakers named demographics, urbanisation, globalisation, and emergence of new business models and partnerships.

Rising population in the large markets of China and India, increasing average life expectancy, emergence of a new consumptive middle class with higher demands for healthcare were seen as necessitating more discoveries and driving demand for life science products.

With regard to globalisation, industry statistics was cited showing that the prevailing share of drugs in the global market is developed and launched in cross-border cooperation.

Sharing insights into drug development and regulatory strategies, Carl Firth, CEO and founder of ASLAN Pharmaceuticals, encouraged companies to explore global opportunities, He said, for example, to choose countries where “it makes more sense” for a company to run different phases of clinical trials (Singapore was named as the fastest in clinical trial regulatory approval).

The pivotal role of technology transfer and intellectual property rights protection was discussed in relation to increasing collaboration along the product value chain including collaborative R&D, pre-competitive partnership, co-distribution, and others. Strategic alliances in the industry commonly include joint ventures and M&A; venture capitalists and big pharmaceutical companies partnering to fund biotech start-ups; partnerships with government on the investment side, and universities on the R&D side. Some venture capital companies are exclusively set up to manage assets of big pharmaceutical companies that invest in small biotech companies engaged in the early stage R&D in the strategic therapeutic areas of a company (e.g., Lilly Asia Ventures).

Collaboration among the regional pharmaceutical associations to introduce an initiative of the regulatory convergence that would streamline the drug regulatory approval process and expedite the launch of new drugs in the market was mentioned by Sabrina Chan, executive director of the Hong Kong Pharmaceutical Industry Association.

Public-Private Partnerships

Speakers also discussed public-private partnerships in the healthcare sector and policy measures for incentivizing domestic R&D such as targeted tax concessions, co-investment and government assistance programs.

For example, Australia introduced a tax concession in 2011 enabling eligible companies to receive a refundable tax offset of 45 percent of their R&D spending as a part of the income tax return.

The 12th Five-Year Economic Development Plan 2010-2015 of the People’s Republic of China mentioned biotechnology as one of the seven national strategic industries.

Malaysia adopted the National Policy for Biotechnology in 2005; representatives of the Malaysian Biotechnology Corporation, a dedicated agency, introduced the Bioeconomy Transformation Programme, a platform for facilitating investment opportunities for bio-based industries and life sciences.

Hosted in Hong Kong for the first time, the event was part of a global chain of biotechnology industry conferences, following the annual BioPharma Asia Convention 2013 in Singapore and forerunning BioMalaysia & Bioeconomy Asia Pacific 2013 Conference & Exhibition in Johor Bahru, AusBiotech 2013 in Brisbane, and the BIO Convention in Beijing later this year.