To catch up with the US and Europe, the infant biotechnology industry in Taiwan could leapfrog the expensive and long initial phases of producing a new drug and buy up the rights to projects that have run out of money, a venture capitalist said yesterday.
"Asian biotechnology is five years behind Europe and at least 10 years behind North America," said Don Qiu, director of Asian operations at MDS Capital Corp, which has a US$60 million fund to invest in biotech ventures.
"I favor the Japanese model for Taiwan of cutting into the biotech value chain at any stage through the licensing process," he said.
The process of licensing and bringing a drug to market from research and laboratory trials to clinical trials and official approval can take up to 30 years.
The US started pouring money into drug research early on and now represents three-quarters of the world biotech industry, which totaled US$41 billion last year, figures from Ernst & Young show.
The whole of Asia's biotech industry was worth a mere 3.3 percent of the global total last year, or US$1.4 billion -- even less than Canada's US$1.5 billion. And Asia invested only US$200 million in research in the same period, far short of America's US$16.2 billion.
"Asian countries should spend on research and development, but to catch up, they need to take advantage of the many opportunities out there," Qiu said.
With such a long investment period before profits show -- the industry made a loss of US$12 billion globally last year -- many companies that initially poured their dollars into drugs have run out of money and put projects on hold, leaving a pool of research up for grabs, Qiu said.
Local companies could then prepare the projects for approval, and sell the rights to what is now a Taiwanese brand back to the original owners or other large drug firms at a profit, he added.
Qiu was speaking at a forum in Taipei to bring biotech firms from Canada together with local investors and biotech partners.
"We are hoping to sell our peptide array and find research partners overseas," said forum delegate Connie Tsai (
Others were hoping to outsource some research to Taiwan, or win investments.
One of the organizers agreed that biotech firms have to re-evaluate their investments.
"The days of the technology cycle are over," said Dave Murphy, trade and investment director at the Canadian Trade Office in Taipei.
"It's not feasible to see a two-year turnaround in biotechnology, because tests on human beings are involved. It's a much longer process," he said.
There are other opportunities for Taiwanese firms, Qiu added, that spring from the nation's expertise in information technology and electronics to build medical devices and diagnostic tools.
And Taiwan is also seen as the gateway to the Chinese market. Local biotech companies can buy the rights to market-ready drugs and sell them in Taiwan and China.
The government is promoting biotechnology as one of the advanced industries that can replace Taiwan's shrinking manufacturing base.
"Taiwan's biotech companies need to focus on value, rather than trying to grow to a global size," said David Silver, director of Biotech-east.com, a Web site that promotes Taiwan's biotechnology and pharmaceutical industries, echoing speakers at the international BioBusiness Asia 2003 conference also taking place in Taipei earlier this week.
"If Taiwan, or any other country, wants to go the way of the US and pour lots of money into research, they will still end up a long way behind," he said.
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