- Invest Korea

Transcription

- Invest Korea

INVESTMENT
OPPORTUNITIES
IN KOREA
BIOPHARMACEUTICAL
R1
CH
HO
R2
OH
INVESTMENT
OPPORTUNITIES
IN KOREA
BIOPHARMACEUTICAL
KOREA,
Where Success Knows No Limits
Contents
04
Industry overview
The pharmaceutical industry
Biotech industry
10
Competitive standing and outlook
Global market outlook
Future development of pharmaceutical and biotech industries
18
Government policies and related regulations
Government policies by industry
22
Cost
24
Success cases
28
Related companies and associations
05
01 INDUSTRY OVERVIEW
INDUSTRY
OVERVIEW
The pharmaceutical
industry
Korea’s pharmaceutical market stood at KRW 19.291 trillion (USD 17.3 billion)* in 2013, up 0.3%
YoY, and posted a five-year CAGR of 2.3% from 2008 to 2013. Given that the market recorded
a higher growth rate than the global market until 2010, its growth pace has slowed. However,
Korea’s pharmaceutical market continues on a steady growth path despite the global economic
crisis.
•In particular, it is notable that Korea’s pharmaceutical production increased by 4.1% YoY,
to KRW 16.2 trillion, in 2013, departing from a stagnant growth trend since 2010. Korea’s
pharmaceutical exports posted a 2008 - 2013 CAGR of 13% driven by Korean pharmaceutical
companies with a growing presence in the global market.
•In contrast, Korea’s pharmaceutical imports dropped 10% YoY, to KRW 5.2 trillion in 2013,
contributing to a sharp decline in trade deficits.
In a nut shell, Korea’s pharmaceutical industry records modest growth across the board. As
Korean pharmaceutical companies have steadily sharpened their competitiveness, the Korean
industry has increased exports and production volumes and fast reduced trade deficits.
Korea’s pharmaceutical industry employed 78,259 individuals in 2013, up 5.1% YoY, or 3,782
individuals. This marks an upturn in pharmaceutical employment, breaking from a downward
trend since 2010, and indicates that business activities have recently gained momentum in
Korea’s pharmaceutical industry.
Recent developments in Korea’s pharmaceutical industry
Production
(Unit: KRW million)
2008
2009
2010
2011
2012
2013
% YoY
A 5-year
CAGR
13,893,810
14,788,387
15,569,588
15,440,251
15,560,663
16,191,845
4.1%
3.1%
Export
1,255,891
1,772,242
1,770,059
1,943,493
2,309,534
2,318,522
0.4%
13.0%
Import
4,319,756
4,953,881
5,108,911
5,447,053
5,728,874
5,155,829
-10.0%
3.6%
Trade
balance
-3,063,865
-3,181,639
-3,338,852
-3,503,560
-3,419,340
-2,837,308
-17.0%
-1.5%
Market size
16,957,675
17,970,026
18,908,439
18,943,812
18,980,003
19,029,152
0.3%
2.3%
* Source: Korea Health Industry Development Institute (2014), Analysis of Korea’s Pharmaceutical Industry (2013)
* Currency conversion based on March 10, 2015 rate.
06
BIOPHARMACEUTICAL
Pharmaceutical researchers numbered 5,437, accounting for 6.9% of the total workforce in
Korea’s pharmaceutical industry. As much as 70.2% of researchers have master’s or doctoral
degrees and the research workforce structure was based mostly on higher-skilled talent. Number of people employed in Korea’s pharmaceutical industry
82,000
07
Biotech
industry
The biotech industry uses biotechnologies based on DNA, protein and cells to produce various
products, such as biopharmaceuticals, and to create value-added services. The industry includes
biopharmaceuticals, bioengineered food, biochemicals and bio-environment, bioelectronics,
bio-process and device, bio-energy resources, others such as biological assay (assessment) and
bioinformatics services.
Korea’s biotech industry stood at KRW 7.52 trillion in 2013, up 5.3% YoY, in terms of domestic
sales and exports, and posted a high CAGR of 8.9% from 2009 to 2013.
81,204
80,000
78,259
78,000
76,000
In terms of production value, the bioengineered food segment is the largest contributor, with
annual production of KRW 3.21 trillion in 2013, accounting for 40% of the biotech industry. The
second-largest contributor is biopharmaceuticals, with annual production of KRW 2.78 trillion.
Biochemicals and other biotech segments are small in terms of absolute production value but
expand at a fast pace, raising expectations that they will represent an increasing share of the
biotech industry’s production.
77,314
75,406
74,477
74,000
72,000
70,000
2008
2009
2010
2011
2012
Korean biotech industry production (domestic sales + exports)
Year
Research workforce breakdown by educational background
(Unit: People)
2009
2010
Others
107
2011
Ph.D. holders
637
B.S. degree
holders
1,509
2012
2013
% YoY
M.S. degree
holders
3,184
Production
(Unit: KRW million)
Total
Biopharmaceuticals
Biochemicals
Bioengineered food
Other
Domestic sales
2,907,448
1,564,251
260,356
283,954
601,718
Export
2,728,749
1,209,223
69,907
722,474
371,403
Domestic sales
3,346,287
1,521,210
230,073
989,797
605,207
Export
2,441,539
852,028
60,352
1,356,334
172,825
Domestic sales
3,646,896
1,506,329
355,684
1,065,834
719,049
Export
2,749,356
954,412
74,783
1,531,965
188,195
Domestic sales
4,068,644
1,577,572
408,226
1,261,325
821,521
Export
3,060,585
1,139,980
97,173
1,610,631
212,802
Domestic sales
4,357,396
1,636,942
451,091
1,338,933
930,430
Export
3,166,435
1,138,462
111,110
1,682,131
234,731
Domestic sales
7.10%
3.76%
10.50%
6.15%
13.26%
Export
3.46%
-0.13%
14.34%
4.44%
10.30%
10.64%
1.14%
14.73%
47.36%
11.51%
3.79%
-1.50%
12.28%
23.53%
-10.84%
Domestic sales
CAGR
(2009 - 2013) Export
* Source: Korea Statistical Information Service (www.kosis.kr)
The domestic biotech market stood at KRW 5.87 trillion in 2013, up 6.1% YoY, posting a CAGR of
8.5% from 2009 to 2013.
•By segment, the biochemicals segment posted the fastest growth, at 8.5% YoY. Of other
biotech segments, the bioelectronics and bio-environment segments recorded a high growth
rate of 53.8% YoY and 9.6% YoY, respectively, although their domestic sales were relatively low,
at KRW 37.3 billion and KRW 30.3 billion.
08
BIOPHARMACEUTICAL
09
In terms of domestic sales, biopharmaceuticals are the largest segment, accounting for 50%
of the biotech market. However, biopharmaceuticals record a slower growth rate than other
segments, while bioengineered food and biochemicals marked higher growth rates. The biotech
market is expected to grow beyond biopharmaceuticals to include diverse segments such as
biochemical, bioengineered food and other biotech segments.
Changes in number of biotech companies
1,000
900
913
958 971
2011
2012
2013
800
700
600
Size of Korea’s biotech market (domestic sales + import)
2009
2010
2011
2012
(Unit: KRW million)
2013
500
CGAR
% YoY
(2009 - 2013)
400
Total
4,236,695
4,751,946
5,208,078
5,643,437
5,866,853
3.96%
8.48%
300
Biopharmaceuticals
2,536,348
2,620,986
2,736,657
2,819,494
2,961,578
5.04%
3.95%
200
Biochemicals
372,034
324,505
435,402
476,952
515,177
8.01%
8.48%
100
Bioengineered food
317,692
999,180
1,098,907
1,320,973
1,385,571
4.89%
44.51%
0
Other
813,452
807,273
937,112
1,026,018
1,004,527
-2.09%
5.42%
* Source: Korea Statistical Information Service (www.kosis.kr)
The number of companies in Korea’s biotech industry increased by 13, from 958 in 2011 to 971 in
2012, marking an upward trend.
•By segment, the number of biotech companies increased in the biopharmaceuticals,
biochemicals and other segments but slightly declined in the bioengineered food segment.
276
188
Total
The number of researchers amounted to 11,605 individuals, or 30.4% of the employees in Korea’s
biotech industry. About 60% of researchers have master’s or doctoral degrees. The workforce is
highly skilled in the biotech industry, as seen in the pharmaceutical industry.
Biopharmaceuticals
204 203
Biochemicals
247 250 252
202 199 199
Bioengineered food
Other
* Source: Biotech Industry Study (2014)
Workforce structure of Korea’s biotech industry
Segment
Biopharmaceuticals
In 2013, the number of people employed by biotech companies stood at 38,197, marking an
increase of 627 individuals from 2012. In other words, the average number of employees per
biotech firm stood at 39.3.
305 317
Biochemicals
Bioengineered food
Other
Total
People
Doctoral degree
Master’s degree Bachelor’s degree
Other
Share (%)
People
People
People
People
18,469
1,030
3,519
6,877
7,043
100%
6%
19%
37%
38%
4,936
362
1,355
1,937
1,282
100%
7%
27%
39%
26%
8,070
345
1,298
3,527
2,900
100%
4%
16%
44%
36%
6,722
359
1,239
3,079
2,045
100%
5.34%
18.43%
45.80%
30.42%
38,197
2,096
7,411
15,420
1,285
100%
5.49%
19.40%
40.37%
3.36%
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BIOPHARMACEUTICAL
02 COMPETITIVE STANDING AND OUTLOOK
Global market
outlook
11
The global pharmaceutical and biotech markets have steadily expanded thanks to an aging
population and growing awareness of healthy lifestyles worldwide.
•The global pharmaceutical industry expanded 2.4% YoY, to USD 959 billion in 2012, and posted
a high CAGR of 5.3% from 2007 to 2012. The growth rates are relatively low compared to the
pre-crisis growth rate of about 8%. However, the global pharmaceutical industry has continued
on a steady growth path despite a global economic slowdown, as national healthcare spending
and demand for healthcare have increased amid aging populations in Asia.
•The global biotech market amounted to USD 1.18 trillion in 2012. This global industry is one of the
most promising and expected to reach USD 1.57 trillion in 2015, with a 2010 - 2015 CAGR of 9.7%.
Size and growth outlook of the global biotech market
Year
Value (USD billion)
Growth rate (%)
% YoY
CAGR
2010
987.2
9.1%
9.7%
2011
1,079.0
9.3%
9.7%
2012
1,181.5
9.5%
9.7%
2013
1,298.4
9.9%
9.7%
2014
1,434.7
10.5%
9.7%
2015
1,572.4
9.6%
9.7%
* Source: IMS Health (2012)
COMPETITIVE
STANDING
AND OUTLOOK
Future
development
of pharmaceutical and
biotech
industries
The future development of the pharmaceutical and biotech industries is expected to be led by
technology convergence-driven new industries, such as BIT.
•The “ubiquitous” healthcare industry has emerged thanks to IT-related innovative technologies,
creating new medical device markets such as portable diagnostic devices for remote health
monitoring, remote consultation and remote treatment. The personalized healthcare market is
estimated to reach USD 63.9 billion in 2015, from USD 33.7 billion in 2010.
Thanks to dramatic technological developments in DNA analysis, key product categories will
include chips and diagnosis kits based on DNA sequencing and protein analysis.
•The preventive medicine segment, such as the introduction of biosensors and biomarkers, is
expected to develop thanks to growing demand for products that enable fast diagnosis and
early detection, for disease prevention. The development of personalized target therapy and
companion biomarkers (companion diagnostics) are expected to emerge as a new business
model for the pharmaceutical industry.
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BIOPHARMACEUTICAL
The industry shift from one-size-fits-all products to personalized treatment products should be
accelerated.
•M edicinal treatment and management will take into consideration personal genetic
information and physical traits, departing from the practice of applying the same treatment
to all patients. In this regard, development of the single-nucleotide mutation search, precision
diagnosis and monitoring segments will enable drug response prediction and help establish a
system to fend off trial and error and side effects in advance.
Diagnosis of Korea’s competitiveness
Korea accounts for 1.8% of the global pharmaceutical market and 1.7% of the biotech market
in terms of sales revenue. Korea’s biotech and pharmaceutical markets are small in absolute
terms but have overtaken the global market in terms of growth rates. For example, Korea’s
bioengineered food segment has posted a five-year CAGR of more than 50%, and the domestic
sales and exports of biotech products, such as bio-chemicals and biopharmaceuticals, recorded a
CAGR of 20 - 30%. Given the brisk pace of market growth and active business, Korea is expected
to enhance its competitiveness in the global market.
•Korea’s biotech industry is expected to maintain strong growth momentum and record KRW
20 trillion in production and KRW 13 trillion in domestic sales in 2017.
•The fast growth of the biotech industry is attributed to socio-demographic and demand and
supply-side factors, among others. On the socio-demographic side, the biopharmaceuticals
and bio diagnostic device segments have been expanding quickly thanks to growing demand
for health checkups, disease prevention and geriatric treatment amid an aging population and
longer life expectancy.
•On the demand side, the biopharmaceuticals, bio-cosmetics and bioengineered food
segments have been rapidly growing due to an increase in disposable income and standard of
living and a greater desire for a healthy, younger life.
•On the supply side, as national spending on social welfare and public health has increased
due to an aging population, it is increasingly important to meet social demand in a more costeffective way. As such, the biotech industry has been a target of active national investments
and efforts to develop technology. Developing further on scientific achievements, the biotech
industry has been leading national and industrial efforts to generate new growth momentum
for industrial development.
13
Competitiveness of the pharmaceutical industry
Korean pharmaceutical companies have mostly developed generic drugs. However, the
development of new drugs is more important than ever to meet changes in the pharmaceutical
environment. As such, industry players, especially major pharmaceutical companies, have
strengthened their commitment to investing in new drug development.
•The need to develop new drugs is gaining momentum due to government policies and
changes in the domestic and foreign pharmaceutical market. Therefore, the commitment and
investment of major pharmaceutical companies in new drug development are becoming
more important.
•K orean pharmaceutical companies have delivered achievements in biosimiliar and
incrementally modified drugs (IMD), capitalizing on their knowhow and research expertise,
and made significant efforts to develop first-in-class drugs. As a result, Korean companies
have exported technologies to multinational companies and conducted global clinical trials,
earning recognition for their technological prowess. For example, Hanwha Chemical exported
its biosimilar version of Pfizer’s blockbuster rheumatoid arthritis drug Enbrel, and Hanmi
Pharmaceutical has licensed out its Poziotinib, a targeted anti-cancer treatment.
Korean pharmaceutical companies made research and development (R&D) investments worth
KRW 967.2 billion in 2012. The R&D investment posted a high CAGR of 13.7% over the past five
years, reflecting a growing commitment to R&D.
•In addition, the average concentration ratio of the pharmaceutical industry increased from
6.24 in 2008 to 7.67 in 2012 in the R&D segment. Such an increase in R&D activities, which are
essential to the development of the pharmaceutical industry, raises expectations that Korea
will be able to enhance its competitiveness.
Korean pharmaceutical companies have actively sought partnerships with global pharmaceutical
companies. For example, Hanwha Chemical concluded an agreement with Merck to produce and
globally market the biosimilar of arthritis blockbuster Enbrel. Samsung BioLogics established a
biosimilar joint venture with the U.S.-based Biogen Idec, enhancing comprehensive partnerships
in areas such as R&D, manufacturing and marketing. As such, cooperation with multinational
pharmaceuticals is expected to generate strong synergy effects.
14
BIOPHARMACEUTICAL
15
Korea’s new drug development
Company
New drug
Development stage
Celltrion
Remsima (anti-rheumatic drugs )
World’s first biosimilar antibody (approved in
July 2012 in Korea, June 2013 in EU)
Celltrion
Biosimilar Herceptin (breast cancer treatment)
Phase III clinical trial (completed in Asia in
November 2010)
Dong-A ST
Tedizolid phosphate (super bacteria antibiotics)
FDA approval (April 2014)
LG Life Sciences
Zemiglo (anti-diabetic drug)
Phase III clinical trials and sales right agreement
(June 2012)
Chong Kun Dang
Pharmaceutical
CKD-732 (anti-obesity drug)
Phase III clinical trials underway (October 2014)
Pharmicell Hearticellgram (myocardial infarction treatment)
World’s first stem cell treatment (July 2011)
Medipost CARTISTEM (knee cartilage regeneration treatment) KFDA approval (January 2012)
Antrogen
Cupistem injection (Crohn's disease treatment)
KFDA approval (January 2012)
Core Stem
HYNR-CS injection (ALS treatment)
KFDA approval (July 2014)
The therapeutic antibodies segment is among the most promising in the pharmaceutical
industry. Korea’s therapeutic antibodies market increased from KRW 30 billion in 2006 to KRW 83
billion in 2010. If the domestic development of new therapeutic antibodies speeds up, Korea’s
therapeutic antibodies segment will reach KRW 300 billion in 2015.
•ISU ABXIS recorded KRW 3.3 billion in sales with Clotinab, Korea’s first antibody-based
treatment. Celltrion has actively conducted R&D in therapeutic antibodies, winning approvals
for its infliximab biosimilar Remsima and completing the phase III clinical trial of the biosimilar
Herceptine (breast cancer treatment).
Outlook for the Korean therapeutic antibodies market
(Unit: KRW 100 million)
3,000
3,000
Market size
2,500
R&D investments by Korean pharmaceutical companies
(Unit: KRW million)
R&D investments
800,000
648,362
600,000
1,500
967,239
1,000,000
2,000
1,000
813,755
684,207
500
578,268
830
300
0
400,000
* Source: Ministry of Trade, Industry & Energy, Five-year Plan for Technology Innovation (2013)
200,000
0
2008
2009
2010
2011
Competitiveness of the biotech industry
2012
* Source: Korea Health Industry Statistics System (KHISS)
R&D concentration among Korean pharmaceutical companies
(Unit: %)
Given that Korea is one of the countries with the most rapidly aging population, the outlook
for demand in the biotech industry is positive. In addition, the biotech industry is expected
to continue on a growth path driven by government support and the commitment of large
corporations to new business development.
9,00
R&D concentration rate
8,00
7,00
6,00
5,00
6.24
6.50
6.44
2008
2009
2010
7.41
7.67
2011
2012
4,00
3,00
2,00
1,00
0,00
* Source: Korea Health Industry Statistics System (KHISS)
Accordingly, Korean companies increase their R&D investments to secure their competitiveness
in the biotech industry. Korea’s biotech R&D investments reached KRW 1.165 trillion in 2013,
continuing on a growth path.
•Korea ranks fifth among OECD member countries, following the United States, France, Japan
and Germany in terms of the private sector’s investments in the biotech segment. In addition,
the biotech segment accounts for 20% of the Korean government’s investments, the second
largest among OECD member countries, following Germany.
•Statistics show that the Korean government has played a key role in establishing the scientific
foundation for biotech research. The public sector’s efforts have facilitated the private sector’s
investments and put the biotech industry on the path to growth and development.
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BIOPHARMACEUTICAL
Korea’s biotech R&D investments
10,000
8,000
9,302
R&D investments
8,761
9,988
7,686
7,293
6,000
4,000
2,000
0
2008
2009
2010
2011
2012
By segment, major market players in the biotech industry are as follows.
Segment
Major companies
Biopharmaceuticals
Celltrion, Isu Abxis, Meditox, RNL Bio, JW-Shinyak, etc.
Biochemicals
CJ CheilJedang, Daesang, SK, LG Chem, GS Caltex, Cheil Industries, etc.
Bioengineered food
Daesang , CJ CheilJedang, Dongbu Farm Hannong, MOGHU Research Center, etc.
Bioelectronics and analytic device
Humasis, Bio Focus, Nano Entek, K-MAC, Seegene, Bioneer Other
AmorePacific, LG Household & HealthCare, Hankook Cosmetics, Pharmicell , Medipost, etc.
The in vitro diagnostic segment is expected to be among the fast-growing markets of the biotech
industry. The segment has strong growth potential thanks to new technology development and
a rapidly aging population. The market is estimated to reach KRW 420 billion in 2014.
Korea’s in vitro diagnostic medical device (IVDs) market
2009
Bioelectronics
Bioinformatics & biological assay
Bio diagnostics
(20% of the diagnostic test market)
Total
2010
(KRW 100 million)
2011
2012
2013
2014
369
489
553
624
724
840
1,406
1,355
1,531
1,730
1,955
2,209
600
690
780
881
996
1,125
2,375
2,534
2,864
3,235
3,675
4,174
* Source: Ministry of Trade, Industry & Energy, Five-year Plan for Technology Innovation (2013)
•In particular, the bio-convergence segment has strong growth potential thanks to Korea’s
technological capabilities in the semiconductor and IT segments, and Korean electronics
companies are showing growing interest in the bio-convergence segment.
- This segment includes biochips, biosensors, u-healthcare and diagnostic devices. In particular, the biochip and
biosensor markets have demonstrated significant growth potential and delivered strong performance.
17
•In this regard, the development of bio chips has been led by public research institutes and
universities such as the Korea Institute of Science & Technology (KIST), Electronics and
Telecommunications Research Institute (ETRI), Korea Electronics Technology Institute (KETI),
Korea Advanced Institute of Science and Technology (KAIST), Pohang University of Science and
Technology (POSTECH), Seoul National University (SNU) and private research institutes and
large corporations such as Samsung Advanced Institute of Technology (SAIT), LG Electronics
Tech Center and LG Chem. Recently, an increasing number of biotech startups have been
entering the market.
•Of Korea’s IVD market, companies such as HBI, SD, Humasis, Bio Focus, Nano EnTek and K-MAC
are new entrants in the immune segment, and companies such as Seegene and Bioneer have
DNA diagnosis products and globally competitive technologies in the molecular diagnosis
segment.
•In addition, as the focus of healthcare has shifted from treatment to disease prevention due to
an aging population, the personalized healthcare market is expected to fast expand, enabling
routine and customized health care through early diagnosis, a ubiquitous healthcare system
and personal health records.
18
BIOPHARMACEUTICAL
GOVERNMENT
POLICIES AND
RELATED
REGULATIONS
03 GOVERNMENT POLICIES AND RELATED REGULATIONS
Government
policies by
industry
19
Korea’s pharmaceutical industry
The Korean government announced in July of 2013 the Five-year Comprehensive Plan for
the Support and Development of the Pharmaceutical Industry in an effort to promote the
pharmaceutical industry. In a fast-changing pharmaceutical industry, the Korean government
has launched a five-year initiative to encourage Korean pharmaceutical companies to go global
through the development of new drugs and products, departing from growth strategies focused
on generic drugs and the domestic market.
•The five-year plan envisions that Korea will join the top 10 in the global pharmaceutical
industry by recording pharmaceutical exports worth KRW 11 trillion and creating four worldclass new drugs by 2017 through five core tasks, 13 key strategies and 41 action plans.
In September of 2013, the Ministry of Health and Welfare launched a fund worth KRW 100 billion
specializing in the pharmaceutical industry to promote high-risk investments by pharmaceutical
companies. The specialized fund is financed by the Ministry of Health and Welfare, Korea Finance
Corporation, Korea Development Bank and Korea Securities Finance Corporation. Its objective
is to support Korean pharmaceutical companies in their technology partnerships and overseas
expansion and to invest in small- to mid-size tech startups with weak financing capacity. The
first global pharmaceutical fund started investments in promising Korean pharmaceutical
companies such as Genexine, Crystal Genomics, DiNonA and CorenTec in 2014, providing growth
momentum for Korea’s pharmaceutical industry.
The Korean government has pursued the PB 300 Project, which provides Korean companies
with consulting and advisory services, by recruiting leading experts from overseas as shortterm consultants. The objective of the PB 300 Project is to ensure that the government can
help Korean companies tackle challenges and enhance their capability by providing consulting
services with a talent pool of overseas experts in new drug R&D, planning, clinical trials,
manufacturing, approval and technology marketing. With the help of the PB 300 Project, Korean
companies that have technologies but lack clinical trial experience overseas will be able to
expand to global markets and emerge as globally competitive players by acquiring advanced
technologies and know-how, enhancing their competence in developing and marketing their
technologies and products.
20
BIOPHARMACEUTICAL
03 GOVERNMENT POLICIES AND RELATED REGULATIONS
To increase awareness of Korea’s pharmaceutical products in the global market, the Korean
government has assisted Korean companies in their expansion to new emerging markets,
enhancing government-to-government collaboration and sending private-public market
development delegations. During Bio Korea 2013 (September 11-13, 2013), Pharm Fair was held
on the sidelines to bring together related foreign authorities in the drug approval segment and
promote marketing cooperation with overseas drug distribution companies. Pharm Fair created
an opportunity for Korean pharmaceutical companies to generate businesses worth KRW 170
billion, including the USD 100 million export deal between BC World Pharm and KOA SHOJI
(Japan). Such policy efforts should help Korean companies look beyond the domestic market,
reach out to the rest of the world and become globally competitive players.
The Korean government introduced a pilot procedure combining drug approval and price
evaluation from October to December of 2013, to shorten the time-to-market for new drugs
and the evaluation period of drug list prices and thus establish an efficient infrastructure for new
drug development.
The biotech industry
The government has designated the healthcare industry as one of the pillars of and core tasks
for Korea’s transition toward a “creative economy.” It has made nation-wide efforts to increase
investments, raise private funds, develop a talent pool and enhance infrastructure efficiency.
•For this goal, the government has set out key initiatives to develop Korea as one of the top
ten players in the global pharmaceutical industry and enhance strategic healthcare R&D by
increasing R&D competence in personalized healthcare, stem cell & rehabilitation medicine,
new drugs & medical devices and conversion between Western and traditional medicines.
In addition, according to the 2nd Basic Development Plan for Bioengineering (2012), the Korean
government will increase biotech investments to KRW 9.7 trillion through 2016 and is developing
a research talent pool of 73,222 master’s or doctoral degree holders.
Government R&D investments in the biotech segment
2009
2010
2011
CAGR
123,437
137,014
148,902
9.8%
Biotech R&D
20,112
23,252
25,808
13.3%
Biotech R&D as % of government R&D
16.3%
17.0%
17.3%
-
Government R&D
21
The Korean government announced in July of 2013 the “Government-wide Mid- to Long-term
Action Plans to Promote R&D for National Healthcare,” integrating policy plans established
by ministries responsible for the biotech and healthcare industries. Moreover, the Korean
government seeks to increase public investments and ease investment restrictions in an effort to
promote private investments.
As part of a private-public initiative to promote the biochemicals sector, a total of KRW 250
billion will be invested for a five-year period from 2013. The Korean government is also making
efforts to establish a full-cycle R&D system through collaboration with related companies and to
overhaul the system, which requires that public organizations prioritize the purchase of certain
products upon procurement. As such, various mid- to long-term initiatives are underway to
ensure Korea will be among the top five in the global biochemicals market by 2020.
•The Ministry of Trade, Industry & Energy has launched a five-year biochemicals technology
development project worth KRW 215.5 billion in 2014 with the goal of accelerating the
development of technology and production infrastructure.
22
COST
BIOPHARMACEUTICAL
23
04 COST
The average annual salary at Korean pharmaceutical companies is USD 27,681, with the top 25%
at USD 42,987 and the bottom 25% at USD 15,903. The starting salary at major companies tends
to be higher at multinational companies than Korean companies and is distributed as follows.
Starting salary at major pharmaceutical companies
(Unit: USD)
Company
Starting salary (USD)
GlaxoSmithKline
33,393
Korea Polyol
32,491
AstraZeneca Korea
31,769
Pfizer Korea
31,588
ISU Chemical
30,505
Dong-A Pharm
29,874
Yuhan Corporation
27,076
Dongwoo Fine-Chem
24,368
Average annual income is distributed as follows by academic background.
Average annual income by academic background
39,025
40,000
Average salary
35,000
32,139
28,384
30,000
25,000
(Unit: USD)
22,572
20,000
15,000
10,000
5,000
0
Associate degree holder
Bachelor’s degree holders
Master’s degree holders
Ph.D. holders
24
BIOPHARMACEUTICAL
05 SUCCESS CASES
SUCCESS CASES
25
1) Celltrion: KRW 350 billion in investments from Temasek, Singapore’s sovereign wealth fund,
since 2010
•Celltrion attracted KRW 207.9 billion in investments from Temasek, Singapore’s sovereign wealth
fund, in 2010 thanks to its superb biosimilar technologies and solid contract manufacturing
organization (CMO) business. Temasek acquired a 10% stake in Celltrion Healthcare, Celltrion’s
affiliate, and made an additional investment of about KRW 150 billion in 2013.
•Investment incentives and outcomes
Celltrion has expanded the global market coverage of Remsima, a biosimilar version of
Remicade (rheumatoid arthritis drug), winning regulatory approvals in Korea and Europe. With
the completion of a phase 3 clinical trial of the biosimilar Herceptine (breast cancer treatment),
the company has made significant achievements in the biosimilar segment.
•It was biosimilar capability that enabled Celltrion to attract foreign investments. Foreign
investments helped Celltrion repay its debts, raise operating capital, enhance its presence in
the global capital market and place a greater focus on developing biosimilar and therapeutic
antibody technologies.
2) Aprogen: Strategic partnership with Japan’s Nichi-Iko Pharmaceutical (2010) and exclusive
sales right worth KRW 30 billion (2014)
•Aprogen, a tech venture in the Daeduk Specialized Zone, attracted an investment of KRW
13.3 billion in the biosimilar business from Japan’s Nichi-Iko Pharmaceutical in 2010. Nichi-Iko
Pharmaceutical acquired a 33.4% stake in Aprogen and entered into an agreement to conduct
clinical trials, file for regulatory approval and sell Aprogen’s biosimilars in Japan. Afterwards,
Aprogen developed the Remicade biosimilar and entered into an exclusive supply contract
with Nichi-Iko Pharmaceutical for KRW 30 billion in 2014.
Aprogen is a subsidiary of Schnell Biopharmaceuticals and the first company in Korea to have
promoted the development of new drugs based on protein and antibodies. Aprogen was
established in 2000 by two professors from the Korea Research Institute of Bioscience and
Biotechnology (KRIBB) and KAIST and has transferred four biosimilar drug technologies to
other companies. Currently, the company is developing four kinds of biosimilars and three
kinds of protein-based new drugs. In addition, the company transferred its business right to
biosimilars of Ramicade (rheumatoid arthritis treatment) and Rituxan (anti-cancer drug) to
Schnell Biopharmaceuticals.
Aprogen attracted equity investments from Japan’s Nichi-Iko Pharmaceutical in 2010 to finance
its biosimilar production and facilitate its advancement in the global market. The agreement
in 2014 includes an investment clause that Nichi-Iko Pharmaceutical will provide capital for
Aprogen to build large-scale biosimilar production facilities. As such, Aprogen has secured
financing for its production facilities and an exclusive right to supply products.
26
BIOPHARMACEUTICAL
3) Samsung BioLogics: Joint venture between Samsung and Quintiles Transnational Corp.
Samsung BioLogics has created a USD 300 million biosimilar development JV with Biogen Idec.
•Samsung and Quintiles Transnational Corp, a U.S.-based global clinical research service
provider, established Samsung BioLogics, a joint venture with KRW 300 billion in capital.
BioLogics teamed up with Biogen Idec to establish a joint venture that develops, manufactures
and sells biosimilars. Samsung BioLogics started construction of a biopharmaceutical plant
with a cell culture capacity of 30,000 liters in June of 2011, with plans to complete the pilot
production of therapeutic antibodies in August of 2014 and start mass production in 2015.
Samsung BioLogics has secured access to the global biotech industry by attracting foreign
investment. In addition, Samsung BioLogics is well-positioned to sharpen its competitiveness
in the biopharmaceutical segment, as it can share knowhow with a global company in
various areas such as contract manufacturing and preclinical and clinical trials. In addition,
the establishment of mass production facilities for biosimilars should allow the company to
expand biopharmaceuticals production, extend global market reach and accelerate R&D.
4) Dong-A Pharm: Strategic partnership with GSK
•In May of 2010, Dong-A Pharm forged a strategic partnership with the global pharmaceutical
company Glaxo Smith Kline (GSK). GSK acquired a 9.9% stake in Dong-A Pharm to jointly
operate the sales, clinical trials and commercialization of ethical drugs. It is a comprehensive
partnership that enables Dong-A Pharm to secure a stable supply of GSK’s key pipeline drugs
and GSK to use Dong-A Pharm’s sales networks and marketing force in Korea. GSK and Dong-A
Pharm expanded their partnerships in March of 2012 to include over-the-counter (OTC) drugs,
generating synergy effects both in the OTC and ethical drug markets.
The partnership between GSK and Dong-A Pharm is an unprecedented model of partnership
between a global pharmaceutical company and a Korean pharmaceutical company. In
particular, GSK has identified Korea as an attractive investment destination, given Korea’s
R&D capacity and clinical trial experiences, and thus showed great interest in Dong-A Pharm’s
overseas R&D pipeline. Through partnerships, Dong-A Pharm has secured an opportunity to
learn global clinical expertise and successfully expand its global business.
05 SUCCESS CASES
27
5) Genexine: Ajinomoto Genexine, a joint venture with Ajinomoto
•Genexine, a Korean biotech venture, formed a joint venture, Ajinomoto Genexine, with
Ajinomoto in November of 2012 to produce cell culture media for biopharmaceutical
production. Ajinomoto has a 75% equity stake in the joint venture, which has KRW 35.7 billion
in capital. With the complement of the cell culture media production facilities at the end of
May 2014 in Songdo, Incheon, Ajinomoto Genexine can domestically produce Ajinomoto’s
patent-protected serum-free medium, which used to be imported, and plans to expand its
market presence, especially in Korea and Asia.
6) Investment incentives and outcomes
•Ajinomoto needed to establish a production base in Asia to meet growing demand for
biological research and biopharmaceutical production. As such, Ajinomoto formed a joint
venture with Genexine, a Korean biotech company with solid biopharmaceutical infrastructure
and promising R&D networks. The joint venture makes it easier for Korean biopharmaceutical
companies to domestically procure customized cell culture media, which offer higher quality
than imported products. In addition, Ajinomoto Genexine is a good example of where a
competitive Korean biotech company has attracted foreign investment with its technological
prowess. It will pave the way for competitive biotech companies to further enhance their
technological competence and develop financing and marketing capacity by attracting
foreign investment and forging partnerships.
28
BIOPHARMACEUTICAL
06 RELATED COMPANIES AND ASSOCIATIONS
Related associations
RELATED
COMPANIES AND
ASSOCIATIONS
Name
Website
Korea Biodiesel Association
blog.naver.com/kbda0711
Korea New & Renewable Energy Association
www.knrea.or.kr
Korea Pellet Fuel Association
cafe.naver.com/ilovepellet
Korea Bioplastics Association
www.kbpa.net
Korea Bio Material Packaging Association
www.biopack.or.kr
Korea Association of Geriatric Hospitals
www.kagh.co.kr
Korean Hospital Association
www.kha.or.kr
Korea Pharmaceutical Association
www.kpanet.or.kr
Korea Medical Devices Selling Association
www.komedia.or.kr
Korea Medical Association
www.kma.org
Korea u-Health Association
www.uha.or.kr
Korea Association of Health Promotion
www.kahp.or.kr
Korea International Medical Association
www.koreahealthtour.co.kr
Korea Global Healthcare Association
www.kgha.kr
Korea Biopharmaceuticals Association
www.ko-bia.or.kr
Korea Biotechnology Industry Organization www.koreabio.org
Korea Research Institute of Bioscience & Biotechnology
www.kbra.or.kr
Korea Biosafety Association
www.kobsa.net
Korea Drug Research Association
www.kdra.or.kr
Korea Medical Devices Industrial Coop
www.medinet.or.kr
Korea Medical Devices Industry Association
www.kmdia.or.kr
Korea Pharmaceutical Distribution Association
www.kapw.or.kr
Korea Pharmaceutical Traders Association
www.kpta.or.kr
Korea Pharmaceutical Manufacturers Association
www.kpma.or.kr
Korea Food Industry Association
www.kfia.or.kr
Korea Crop Protection Association
www.koreacpa.org
Korea Seed Association
www.kosaseed.or.kr
Korea Animal Health Product Association
www.kahpa.or.kr
Korean Veterinary Medical Association
www.kvma.or.kr
Korea Advanced Farmers’ Federation
www.kaff.or.kr
Korea Animal Improvement Association
www.aiak.or.kr
29
30
BIOPHARMACEUTICAL
Related companies
Company
Website
Seoul Pharma
www.seoulpharma.com
Suheung
www.suheung.com
Hutecs Pharmaceutical www.hutecs.co.kr
SS Pharm
www.susungpharm.com
Ahn Gook Pharm
www.ahn-gook.com
RP Corp
www.rpskorea.com
Pharmbio Korea
www.pharmbio.co.kr
SB Pharmaceutical
www.sbp.com
Company
Website
Gwangdong Pharmaceutical
www.ekdp.com
Kukje Pharm
www.kukjepharm.co.kr
Green Pharm
‐
BC World Pharm
www.bcwp.co.kr
Kunwha Pharmaceutical
www.kunwha.com
GlaxoSmithKline
www.gskkorea.co.kr
Green Cross
www.greencross.com
Daelim Pharmaceutical
‐
SK Chemicals
www.skchemicals.com
Daewoong Pharmaceutical
www.daewoong.co.kr
Estech Pharma
www.estechpharma.com
Daewon Pharm
www.daewonpharm.com
Dream Pharm
www.dreampharma.co.kr
JW-Shinyak
www.jw-shinyak.co.kr
Nensys
www.nensys.co.kr
Dai Han Pharm
www.daihan.com
LG Life Sciences
www.lgls.co.kr
Daehwa Pharmaceutical
www.dhpharm.co.kr
YD Diagnostics
www.yd-diagnostics.com
Dongkook Pharmaceutical
www.dkpharm.co.kr
Yungjin Pharmaceutical
www.yungjin.co.kr
Huniz
www.huniz.kr
Youyoung Pharmaceutical
www.yypharm.co.kr
Dong-A Pharm
www.donga.co.kr
Yuyu Pharma
www.yuyu.co.kr
Dong Wha Pharm
www.dong-wha.co.kr
UK Chemi Pharm
www.ukchemipharm.co.kr
Mundi Pharma
mundipharma.co.kr
Bioland
www.biolandkorea.com
Medica Korea
www.medicakorea.com
Yuhanmedica
www.yuhanmedica.co.kr
BiNex
www.bi-nex.com
Yuhan Corporation
www.yuhan.co.kr
Baxter
www.baxter.co.kr
Ildong Pharmaceutical
www.ildong.com
Bolak
www.bolak.co.kr
Ilsung Pharmaceutical
www.ilsung-ph.co.kr
Boryung Pharm
www.boryung.co.kr
ILYANG Pharmaceutical
www.ilyang.co.kr
Sewon Cellontech
www.sewoncellontech.com
Ilhwa
www.ilhwa.co.kr
B. Braun Korea
www.bbraun.co.kr
JRP
www.jrpharm.co.kr
Bukwang Pharm
www.bukwang.co.kr
Kyowa Hakko Kirin Korea
www.kyowa-kirin-korea.com
Samnam Pharm
www.samnam51.com
Jeil Pharmaceutical
www.jeilpharm.co.kr
Samsung Fine Chemicals
www.sfc.samsung.co.kr
Choa Pharmaceutical
www.choa.co.kr
Sama Pharm
www.samapharm.co.kr
Chong Kun Dang Pharmaceutical
www.ckdpharm.com
Samyang Biopharmaceuticals
www.samyangpharm.co.kr
JW Pharmaceutical
www.cwp.co.kr
Sam Yang Chemical
www.samyangchem.com
Jinyang Pharm
www.jinyangpharm.com
Samil Pharm
www.samil-pharm.co.kr
Unimed Pharm
www.unimed.co.kr
Samjin Pharm
www.samjinpharm.co.kr
Chunggei Pharm
www.chunggei.co.kr
Sam Chun Dang Pharm
www.scd.co.kr
Chodang Pharm
www.chodang.com
Saehan Pharm
www.shpharm.co.kr
KMS Pharm
www.kmspharm.com
31
32
BIOPHARMACEUTICAL
Company
Website
Company
Website
Kolon Pharm
www.kolonpharm.co.kr
Astellas Pharma Korea
www.astellas.com/kr
Pharmicell
www.pharmicell.com
Handok Pharm
www.handok.co.kr
Tai Guk Pharm
www.taiguk.co.kr
Hanmi Pharm
www.hanmi.co.kr
Pharma King
www.pharmaking.co.kr
Hanbul Pharm
www.hanbulpharm.co.kr
Taejoon Pharm
www.taejoon.co.kr
Celltrion
www.celltrionph.com
Pacific Pharm
www.pacificpharm.co.kr
Hanall Biopharma
www.hanall.co.kr
Richwood Pharmaceutical
www.richwood.net
Hanzhung Pharmaceutical
www.hzpharm.co.kr
Fresenius Kabi Korea
www.fresenius-kabi.co.kr
Hanpoong Pharm
www.hanpoong.co.kr
Hana Pharm
www.hanaph.co.kr
Han Wha Pharma
www.hwpharm.com
Hawon Pharm
www.hawonpharm.co.kr
CMIC CMO
cmic-cmo.co.kr
Nelson Korea
www.nelsonkorea.co.kr
Hyundai Pharm
www.hyundaipharm.co.kr
PMG Pharm
www.pmgpharm.co.kr
Whanin Pharm
www.whanin.com
Daiichi Sankyo Korea
www.daiichisankyo.co.kr
Huons
www.huons.co.kr
DPH Korea
www.dhpkorea.co.kr
CJ Health Care
www.cjp.co.kr
Korea Vaccine
www.koreavaccine.com
Isu Abxis
www.abxis.com
Modern Cell & Tissue Technologies
www.mctt.co.kr
GL Pharm Tech
www.glpt.co.kr
Han Kook Shin Yak
www.hsp.co.kr
MG
www.medi-green.co.kr
Genexine
www.genexine.com
YD Global Life Science
www.bioyd.co.kr
Korea Arlico Pharm
www.arlico.co.kr
Korea Global Pharm
www.globalpharm.co.kr
Alcone Korea
www.alconlabs.co.kr
Sungwon Adcock Pharm
www.swpharm.com
Newgenpharm
www.newgenpharm.com
Mcnulty Pharmaceutical
www.mcnultypharm.com
Janssen Korea
www.janssenkorea.com
Humedix
www.humedix.com
Eisai Korea
www.eisaikorea.com
Donwoo Syntech
dongwookr.com
Otsuka Pharmaceutical
www.otsuka.co.kr
Samsung Bio Epis
www.samsungbioepis.com
C&R Research
www.cnrres.co.kr
White Global Pharmaceutical Corp.
www.whpharma.com
Korea Atomic Energy Research Institute
www.kaeri.re.kr
Crystal Genomics
www.crystalgenomics.com
Korea United Pharm
www.kup.co.kr
Bio Leaders
www.bioleaders.co.kr
Union Korea Pharm
www.ukp.co.kr
Meid Help Line
www.medihelpline.co.kr
CTC Bio
www.ctcbio.com
Korea Ginseng Corp.
www.kgc.or.kr
Hankook Korus Pharm
www.koruspharm.co.kr
Korea Pharma
www.koreapharma.co.kr
Pharvis Biotech Korea
www.pharvis.co.kr
Ferring Pharmaceuticals
www.ferring.co.kr
Korea Prime Pharma
www.koreaprime.co.kr
33
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