More than one year after its establishment, it is welcome news that a government-funded biotechnology incubation center announced last week that it will soon start providing funds to qualified research projects.
With NT$50 million (US$1.7 million) proposed for each business start-up over a three-year period and at least NT$100 million a year for qualified research institutes, the Supra Integration and Incubation Center (SIIC) is gearing up to identify candidates with potential in drugs and medical devices.
The center’s aim is also to formulate complete industry value chains for each project and provide funds using less red tape, bringing products to market in the shortest time possible.
In the long run, the center hopes it can help Taiwanese companies lead the Asia-Pacific region in biotech fields such as lung cancer and liver cancer treatment.
This vision can only be realized if the government is committed to financially supporting the center with a long-term strategy and if it can attract a great deal of private capital, the engine for future growth.
The SIIC funding program is one of several developments since the legislature passed the Biotech and New Pharmaceutical Development Act (生技新藥產業發展條例) in 2007.
Over the past six years, the government has also launched the Hsinchu Biomedical Science Park and state-run venture capital firm TMF Management Co.
Unfortunately, TMF encountered difficulties raising capital due to political rows during the 2011 presidential election campaign over government investments in Yu Chang Biologics Co, now known as TaiMed Biologics Inc, which has a special focus on developing a new AIDS drug known as TNX-355.
Despite an optimistic forecast for high growth in the nation’s biotech industry, there are serious hurdles blocking the road to its development.
The biggest problem, industry veterans say, is that the sector is weak in transforming innovative ideas into profitable products.
However, the goal of developing Taiwan’s biotech industry into another trillion-dollar industry should give people a reason to come to this country, which is known for its strong education system, good healthcare, quality medical research and a common cultural background with China.
In addition, Taiwan’s strength in information and communications technology could provide innovation and extra benefits in developing biotechnology.
However, the issue with the government-run incubation center is its ambitious plan for business start-ups that aims not just to develop them as an important part in the global biotech supply chain, but also to turn them into successful manufacturers of profitable products through the clinical trial and regulatory approval stages.
That means the costly and time-consuming grooming of biotech start-ups, which requires the public and private sectors to have deep pockets and a firm commitment to make it happen. The start-ups also need support from a well-developed investment environment, where an efficient bureaucracy and legal system and a sufficient pool of legal and financial professionals must be available.
Because the nation’s biotech industry is lagging behind other countries’, it may be helpful if domestic companies can cooperate with international businesses to shorten their learning curve and more quickly upgrade their technology. The SIIC could provide certain matchmaking services to create collaboration between local and foreign companies.
Taiwan’s biotech industry still has great potential. While entrepreneurs could use their ample capital to invest in quality biotech firms, the government should maintain a consistent policy toward the sector.
Without this, its promise to develop a trillion-dollar industry is simply an election slogan.