The Asia–Pacific region is a vast geographic area with a loose definition — covering East Asia, Southeast Asia, and Oceania. It includes a variety of cultures and races and is home to both developed and developing countries. Depending on the definitions of the region, the gross domestic product (GDP) varies from $500 per capita in East Timor to $41,500 in Australia, and the populations climb from a mere 55,500 in Australian Samoa to a vast 1.3 billion in China (1).
Lower costs for drug development and manufacturing have been the traditional driver for taking European and US companies into developing countries in the Asia– Pacific. The region boasts lower labor costs and an educated workforce — including Western-trained scientists returning home — and a huge population of potential patients and controls for clinical trials (often treatment-naïve, and non-Caucasian). By contrast, many trials in the West enroll only Caucasian patients, which do not provide advantages to patients of Asian origin living in Europe and the United States.
The Asia–Pacific region is an emerging market. As some countries become developed, their populations suffer an increasing incidence of lifestyle diseases (e.g., obesity, heart disease, diabetes, and cancer) driven by changes to a more “Western-style” diet (2,3,4). And the growth of hepatitis B and C has potential to lead to an explosion in cases of liver cancer (5). “The disease profiles in the Asia Pacific region are changing. People’s lifespans are lengthening, but their diets are becoming less healthy, leading to lifestyle diseases,” says Scott M. Wheelwright, PhD, of Strategic Manufacturing Worldwide, a consultancy focusing on manufacturing and product development.
Those factors — associated with an increasing disposable income and an increasing awareness of public health issues (6) — will provide market opportunities for domestic and US and European companies. “US and European companies are turning to the Asia–Pacific, driven by the increasing standards of living in India and China. These areas will be a force to be reckoned with,” says Tracy Thompson, CEO at New Zealand–based Polybatics. For example, in November 2011, Bayer announced that it would expand its production, distribution network and research activities in Asia, expecting a 60% increase in sales in this region by 2015 (7).
The area has had to overcome past complications, including regulatory noncompliance and lack of patent coverage or enforcement — particularly after the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. “There is a historic stigma relating to biopharmaceutical companies in countries like India and China. And while there are companies that [still] do not follow the regulatory requirements, there are also very good companies across the region,” says Dawn Driscoll, PhD, principal at DCi Biotech, a Perth-based Australian cell therapy and biotech consultancy. “There is a Western ‘phobia’ about the Asia–Pacific region, which for those of us based here is disappointing,” adds Kenneth L. Harris, chairman and CEO at US/Indian cell therapy company TotipotentRX Cellular Medicine.
However, governments across the region are working hard to improve compliance and bring standards up to those in the West. It still pays to be vigilant, and the responsibility for regulatory compliance does finally rest with the company. “There are still intellectual property issues in the Asia–Pacific region. India has done a lot to address these issues, but there is still IP leakage in China,” says Thompson. “Because of this, it’s important to pick and choose who you partner with.”
“Asia–Pacific companies that are eager to partner with companies in the West will often cite ‘FDA Inspected’ or other such regulatory blessings. While these credentials may exist, the regulator’s inspection may have related to a portion of the facility or business that has nothing whatsoever to do with the product or facility currently in question. Therefore it is wise to question the specific relevance of any such citations and to review all original documentation,” says Driscoll.
Companies thinking of doing business in the Asia– Pacific do need to consider the vast cultural differences across the region, from Australia and New Zealand to the Far East. Negotiation and communication styles will vary. “It is important to take culture into account in any multi-national project, but particularly with those between the West and the Far East, where the culture is generally slower to be forthcoming. However, this appreciation of national differences has to be balanced with an expectation of transparency in negotiations and the timely provision of relevant documentation by and to both parties,” says Driscoll.China: Still a Developing Market
China has a huge population — ranging from very urban to very rural and very rich to very poor. The overall standard of living is improving, however, which is reflected in its fast-growing spending on health care. China also has a growing biopharmaceutical industry (both domestic and international) that is largely focused on an internal market. “The Chinese market is growing, and the region is focusing on healthcare reform. There are lots of bright scientists there and lots of opportunities,” says Robin L. Smith, chair and CEO of NeoStem, a US-listed cell therapy company with operations in China. “The Chinese market is growing at over 20% per year,” says Wheelwright. “Locally owned and multinational companies are manufacturing drugs in China for this rapidly growing domestic market. At this rate of growth, there is little incentive to upgrade facilities to international GMP levels to export to Europe and the United States.”
Several national and international companies are making the most of this growing market. For example, Japanese company Daiichi Sankyo has established a wholly owned Chinese subsidiary in Shanghai (Daiichi Sankyo China). And Chinese company Simcere Pharmaceutical has created a joint venture with Merck & Co. for the manufacture and sale of Merck’s branded products in cardiovascular and metabolic diseases — a growing unmet need in the country.
Biosimilars are an active development area in China, although companies are mostly focusing locally, explains Wheelwright. “There is a lot of competition among biosimilar producers in China, but unlike in India, this is for a domestic, not an export market. This has grown out of the period in which there was little or no patent protection in China, and it caused a massive drop in price. For example, Amgen’s epoetin was around a third of the cost of the US version in China. When 3S Bio produced a biosimilar version, this became a third of the cost of the Amgen version. But because costs are lower in China, 3S Bio was still able to make money.”
Infectious diseases are occurring at high rates in China. As the fourth largest in the world, its vaccines market represents an opportunity for both domestic and international companies. Simcere stepped into this market by acquiring an established vaccine manufacturer and creating an Institute of Vaccine Research for in-house vaccine R&D, as well as licensing-in vaccines for products and technologies (8). Novartis also is expanding in the Chinese market. It acquired a majority stake in Chinese vaccines company Zhejiang Tianyuan Bio-Pharmaceutical, and the two companies will collaborate to develop vaccines for domestic and global markets (9). “This agreement combines the strength of our vaccines R&D strat
egy and pipeline with Tianyuan’s deep knowledge of the vaccines market in China, which enables us to better deliver a broad range of vaccines to the Chinese people,” said Andrin Oswald, head of Novartis Vaccines and Diagnostics.
Ascletis is bucking the trend in China by focusing both externally and internally. The company is a US–China joint venture founded in 2011. It focuses on drug discovery and development cancer and infectious diseases, with an aim to bringing US technology and drugs to a Chinese market and Chinese money and expertise to global markets. Jinzi J. Wu was one of the founders of Ascletis and was previously vice president of global HIV drug discovery at GlaxoSmithKline. The company has two sites: the National High Tech Industry Development Zone in Hangzhou, China, and Research Triangle Park, North Carolina.
“Over my career at GSK, I could see the shift in focus from the United States as a center for manufacturing and discovery to the emerging countries, including the BRIC [Brazil, Russia, India, China] countries. So the decision was to either stay at GSK or do something more exciting,” says Wu. “China has significant unmet needs in cancer and infectious disease, but these are also unmet needs globally. The West and East are complementary: The United States and Europe are the center of R&D and have a lot of technology platforms. But the market is saturated, with shrinking pharma sales. In developing countries, including China, pharma markets are growing. In the United States, venture capital has dried up. But in China, there are opportunities to raise money. So we willtake US technologies and combine them with Chinese markets and Chinese investors.”
Ascletis is building up based on a two-pronged strategy. The company licenses in technologies and phase 1–2 drugs to commercialize them in China. At the same time, it carries out drug discovery in-house for global sales. The company is looking for partners. “China is moving toward being able to carry out drug discovery from beginning to end. However, it is still emerging, and there is a technology gap between the United States and China,” says Wu. “Although there are issues with conducting clinical trials in China, the market is huge. There are no opportunities without challenges.”
Ascletis has closed a series A of US$100 million from Hangzhou Binjiang Investment Holding and private entrepreneurs from China and other countries, including the United States. “We are in the right place at the right time,” says Wu. “There is a huge market potential in China. It’s the number three pharmaceutical market after the United States and Japan, and it’s likely to be number two in a few years’ time, and even number one around 2020. However, companies coming into China have to understand that the country has a 5,000-year history. It’s more than just reading a report — you need a partner that knows China and its people, culture, and geography.”
Cell Therapy: Like Ascletis and Indian company TotipotentRX (see next section), NeoStem is using a business model with bases in both the Asia–Pacific and the United States. NeoStem is a US company that has been involved in stem cell research and treatment since 2007, when it acquired VSEL (very small embryonic-like) stem cell technology and the Asia rights of the Regenexx technology for orthopedics. In 2011, NeoStem purchased Progenitor Cell Therapy, a services company that manufactures cell therapies with expertise in regulatory and logistical transport and cell banking. In 2009, NeoStem began several adult stem cell initiatives in China, including establishing an R&D laboratory, creating relationships with hospitals, and gaining product licenses. Its business model is a combination of revenues and a pipeline of cell-based therapies and generic pharmaceutical business that can help fund its R&D. The company develops products from concept to FDA approval for clients, such as Dendreon for Provenge (an immunotherapy for prostate cancer) and for its own therapeutics.
Cell therapies in China are viewed more as blood products than therapeutics. “So the approval process can be quicker,” says Smith. “There have been issues with regulatory compliance, but the country is undergoing healthcare reform. And after all, noncompliance can happen anywhere, not just China.” According to Smith, Neostem ensures that its quality standards are the same at every facility. The company built a good manufacturing practice (GMP) facility in China to the same standards as its US facility. “The onus is on the company to ensure that it not only adheres to the standards in each country but it also ensures that its own standards of quality, IP protection, and safety put patients first,” he says. “The differences between China and the USA — from culture, types of illnesses, and national holidays to regulations regarding patient privacy, data protection, and clinical trials — can be a strength. The key is to work with people who understand the importance of following protocols, quality standards, and patient safety.”India: An Evolving Market
Global biopharmaceutical companies have traditionally been attracted to India’s lower costs of manufacturing. As the standard of living in this region has increased, however, so have the salaries (and therefore the costs). “India’s economy is changing. We see a 20% average increase in the cost of employment each year, and if this continues, in four or five years, Indian and North American employee cost will be equivalent. Although Europe will still be more expensive, I predict the two are likely to intersect in seven or eight years. So within a decade, the attractive cost savings differential may be less attractive. However, what will remain attractive is the Indian domestic market, which is developing quickly. So there will still be an advantage for European and US companies to have operations in India.”
As in China, the domestic Indian biopharmaceutical market is being driven by growing healthcare spending on an increasingly affluent population. “India is a very interesting market. The healthcare provision covers quite a wide range of support. At its higher end, it is equivalent to that in the West, or even superior,” says Harris. “Its significance will increase because the Indian government has just increased healthcare spending to about 3% of its GDP.”
Attractions for Drug Development: India has a large and often drug-naïve population, with high levels of Western lifestyle diseases, as well as a well-educated and scientifically literate population. Companies such as Biogen Idec are integrating India into their global R&D programs (10). “There are over one billion Indians, with the highest rates of cardiovascular disease and diabetes in the world and rates of cancer probably equivalent to or greater than those in the West,” says Harris. “Regarding clinical trials, companies must consider genetic differences between Indian patients and Caucasians, as there are different profiles with different responses and co-morbidities which makes this an essential population for the evaluation of new drugs,” says Harris.
India has a history of generics and biosimilars production. Although those areas have not always been compliant, improved regulatory oversight is increasing. That experience and expertise could give the country a potential head start for approved biologics as the biosimilars market grows worldwide. Partnerships with multinational companies looking for lower cost manufacturing (2) are likely to boost those opportunities. Companies such as Lupin are operating on a hybrid business model, working in both generics and innovative pharmaceuticals (11).
Regenerative medicine is a growing area in India, as a response to the costs
and compliance issues associated with long periods of therapy. “In the West, the model of treatment is a daily dose of a drug for a disease. But the cost is significant, and compliance is critical. This model doesn’t work as easily in the lower economic sector in India, so regenerative medicine could be key, as patients can be treatedand won’t need chronic medical follow-up,” says Harris. “Regulatory considerations are perhaps a decade behind the United States and five years behind Europe in cell therapy. But India is catching up. For example, there are guidelines written for cell therapy although they are not yet codified.”
TotipotentRX (a spin-off from MK Alliance) is a private company based in Los Angeles and New Delhi. The company focuses on regenerative medicine using adult stem cell therapy. It develops, manufactures, and markets disposable kits that allow doctors to use a patient’s own cells (autologous) sourced from cord blood, bone marrow, and adipose tissue. The company is also carrying out clinical trials in chronic heart failure, acute myocardial infarction, advanced peripheral vascular disease, avascular necrosis, and chronic spinal cord injury. “TotipotentRX was originally a US company, and the concept was to bridge the gap by putting US technology into the Asia–Pacific region,” says Harris. “Our model is to develop the biology and technology and then partner with clinical groups for use in primary care. We develop the methods and the devices under GMP and set guidelines and then hand the projects on to clinicians.”
In May 2011, TotipotentRX signed an agreement with Fortis Healthcare, one of India’s fastest growing chains of hospitals, to set up stem cell centers for treatment and clinical trials in diabetes, cancer, and cardiovascular disease. As part of the agreement, the partners will create a stem cell medical board to oversee the medical research program following international and Indian ethical guidelines. “Because autologous cell therapies are completely controlled and administered in hospitals by prescribing physicians, the main safeguards for the clinical trials are two mandatory oversight groups — the institutional review boards (IRBs) and the stem cell research committees (ICSRT). We have found the standards in top-tier clinical facilities are as high or higher than those in the West. For clinical trials of small molecules and biologics, these may not require the infrastructure to support their use in treatments. And there does need to be more caution in selecting the right investigators. The onus is on the company to make sure that trials are ethical and legal,” says Harris.
Harris advises companies wanting to run clinical trials in India to become Indian companies rather than just contract out to Indian CROs. He says that approach is better for patient enrollment and follow-up. “Being based in India means that we can afford a full-time professional clinical research assistant on our staff to work with each physician every day. This makes a significant difference in data quality. However, the challenges of India include the fact that the regulatory agencies are understaffed and very bureaucratic. What can take six months in Europe could take around two years in India,” says Harris. In addition, companies should understand how Asian business works. “Deal structures are different. Agreements are often relationship-based and less focused and managed by paper contracts. My advice: Don’t wholly own the company, but bring in local investors. You need local people helping you along the way. And put Western managers in with Indian managers. Each will learn from theother as your organizations develop.” As Harris observes, companies moving into India need a reliable partner and deals should have legal reach beyond India. “For example, we sign all of our agreements in the United States under US law and then reassign the rights to our Indian subsidiary. This gives my company and our clients the best of both worlds.”Australia and New Zealand: What’s Going On Down Under?
As developed countries, Australia and New Zealand have populations, cultures, and income levels more akin to those of Europe and the United States than the rest of Asia. As Peter Bradley, chair of Auckland Regional Bioscience Leadership Group observes, New Zealand does not have a lot of Asian influence, but rather is more like an “outpost” of the former empire. Driscoll adds that “Australia has all the attributes of the US or Europe as a location for drug development. One advantage is that while Australian clinical trials are stringently and ethically regulated, it can be significantly faster there to get into the first clinical trials.” Australia also has the advantage of a 45% tax credit regime (12).
Protein Technology: Polybatics (founded 2009) is a New Zealand company that produces high-density coatings of proteins on biodegradable polymer beads. “Bioplastic manufacturing has been very expensive to date. Our goal was to create an inexpensive and efficient process, which we could also make available to researchers and not-for-profits on an open-source basis,” says Thompson. Many bacteria naturally produce polymers as a carbohydrate storage process. Company scientists have inserted copies of hybrid genes for polyester synthase and the target protein into Escherichia coli. The bacteria then overproduce those polymers as particles and express target proteins on the surface. The technology allows the inclusion of multiple copies of genes, which enables expression of multiple different proteins consistently across the surfaces of all beads in a single step. The beads can also carry a different protein within the core, and the polymers can be produced as powders, fibers, and sheets.
Initial applications of the technology will be in bioseparation and biocatalysis. Other areas include vaccines, diagnostics, and protein production in therapeutics, including as polymer delivery systems. “This last application is likely to be the most valuable, but it will also have the highest regulatory barriers,” says Thompson. “So we are focusing on bioseparation as our initial ‘paypoint’ and waiting until we have more data.” The company has also carried out mouse studies with the beads expressing bovine tuberculosis antigens, which have produced both a cellular and a humoral response.
PolyBatics’ success stories are in its technology. It is already producing protein A displaying beads with a binding capacity twice that of the industry leader and to GMP standards. “Our greatest success so far is that we haveattracted the attention of the world’s leading biotech companies with respect to our bioprocessing offerings. For such a conservative industry, it is no small feat to have virtually every major biopharma company talking with us,” says Thompson. The company has demonstrated other possibilities for its technology at proof-of-concept. Future potential goals include integrating the company’s disposable resins into antibody capture and expand adoption of its technology into “as many applications as possible, whether we take those to market or not.”
Cell Therapies: Another success is Australian company Living Cell Technologies, which is uses pancreatic cells from pigs from the Auckland Islands. (Sailors in the 17th and 18th centuries left the animals on the islands as a food source. Bradley describes the pigs as very free from disease but very ugly.) The company harvests the pancreatic cells, encapsulates them in alginate, and uses them as a potential treatment for diabetes. Its product, Diabecell (in phase 2b trials) is the subject of an A$25 million deal with Otsuka Pharmaceutical in a 50/50 joint venture known as Diatranz Otsuka.Japan: A Small Country with a Major Market
Japan’s focus has historically been on its strong internal market,
but Japanese companies are now starting to look outward. For example, Daiichi Sankyo acquired US cancer company Plexxikon, and FujiFilm bought the Merck BioManufacturing Network, a leading contract manufacturing and development service. This move outward is also taking in emerging markets in other parts of the Asia–Pacific. For example, Japanese generic drug maker Nichi-iko has signed an agreement with DKSH, a Swiss trading company that will allow Nichi-iko to export generics into Malaysia, Thailand, and Hong Kong (13).
“The attraction of Japan is not in the costs. The cost of living is very high and the Yen is very strong. It’s in its huge market for health care. The country has an aging population and has universal access to health care, which makes it the second largest biopharmaceutical market in the world,” says Doug Sipp, manager at the RIKEN Center for Developmental Biology.
Biosimilars: Although Japan hasn’t traditionally been a large user of biosimilars and generics, increasing healthcare costs are expected to drive a move towards this market, supported by a government campaign. Indian company Lupin (through its Japanese subsidiary Kyowa Pharmaceutical) and Fujifilm are moving into generics (13). Japan now has a clearer regulatory pathway, and biosimilars are beginning to take off. Gedeon Richter, for example, is collaborating with Mochida to launch Gedeon Richter’s biosimilars, and Sandoz is launching Japan’s first biosimilar, Somatropin BS (13).
Therapeutics Areas: Another government campaign is encouraging vaccine manufacturing in Japan. Takeda, for example, is developing and producing influenza vaccines (13). Other disease incidences are increasing in Japan. For example, the number of breast cancer cases in Japan is rising, likely as a result of diet and lifestyle becoming more Westernized (14).
Stem cells and their use in regenerative medicine are key research areas. Japan was the first country to use autologous stem cells for cosmetic procedures. Stem cell research is supported by the Japanese government. “There are parallel pathways for the introduction of stem cell therapies in Japan. If they are developed for commercial and nationwide use, they have to go through the Japanese Pharmaceuticals and Medical Devices Agency, which is akin to the FDA. However, there is a lot of latitude given to individual licensed physicians under the medical practitioners law if they are producing stem cell therapies for individual use and outside of the national health insurance scheme,” says Sipp. “This means that doctors can do a lot in the context of their own practice, but this does allow for individual physicians to market unproven stem cell treatments direct to consumers, putting patients at risk.” As Driscoll observes, “Historically there has been little oversight for stem cell therapies across the Asia–Pacific region, and the limited oversight that does exist doesn’t have teeth,” adds Driscoll. “This has allowed people to offer highly questionable ‘therapies’ for a multitude of diseases to desperate patients who are neither screened appropriately nor followed-up.” In response to this, the Japanese Ministry of Health, Labor, and Welfare is looking into revising the rules and calling for more oversight, explains Sipp, which “may lead to tension between physicians and bureaucrats.”
Japan is a world leader in human induced pluripotent stem (iPS) cells. This area has huge potential, and it doesn’t carry the ethical issues associated with embryonic stem cells. Mouse iPS cells were first discovered in Japan, and articles on human iPS cells were simultaneously published in Japan and the United States. Here are some examples:
Stem cell company Cellular Dynamics is a spinout from the research at the University of Wisconsin.
iPS Academia Japan is a clearinghouse for iPS intellectual property and a spinout from the research at Kyoto University. Both Cellular Dynamics and iPS Academia Japan have cross-licensed some of their fundamental IP.
iPierian is a biopharmaceutical company using iPS cells derived from patients with specific diseases to create disease models for target and drug discovery. Its initial focus is on neurological disease. Although iPierian is a US-based company, it uses expertise and patents derived from the work at Kyoto University.
Laboratory for Retinal Regeneration at RIKEN CDB is collaborating with Japan Tissue Engineering (J-TEC) to develop human-induced pluripotent stem (iPS) cells with potential in retinal regeneration in age-related macular degeneration (AMD). “The researchers are gearing up for clinical trials, and these could be the first iPS cells in the world into human studies,” says Sipp.
Working in Japan isn’t the same as working in the West. Companies considering working in or locating to this region need to be aware of the issues. Althoughresearch agreements are similar to those in the West, negotiation is a little different. Communications can be difficult because English is not always spoken fluently, and collaborations are relationship-driven. Decisions are often made by consensus, so they can’t be rushed. Administration is often slow moving, with the regulatory body in Japan being rather conservative and slow moving,” says Sipp. “However, it is worth persevering because the levels of science know-how and expertise are high. Companies looking to work in Japan do need to partner with a Japanese company or set up locally, because it is hard to rely just on phone and email.”Singapore: A Manufacturing and Distribution Hub
Singapore’s location in the Asia–Pacific, its history of international business, and its outward-looking government situates it ideally as a hub for the region. Singapore is a small country, with successes historically linked to the financial arena. Nonetheless, its national government has identified certain knowledge-intensive industries — including biotechnology and biomedicine — as future growth areas. The Singapore government has invested a large amount of money in the region in the form of grants and incentives to attract world-class research and international companies, which it hopes will then drive the set up of local companies. “This process has been under way for about 10 years and is turning Singapore into a biomedical hub,” says Eddie Liew, CEO at Singaporean tissue engineering company Bio-Scaffold. “Singapore has always attracted companies from abroad, which have been supported by the Singapore Economic Development Board.”
“Singapore is a very small country but has become a hub for manufacturing and distribution for southeast Asia,” says Wheelwright. “All large multinational companies have manufacturing plants in Singapore. It is an export-driven market.” As an example of the region’s outward face, a merger between vaccine start-up SingVax and US vaccine development company Inviragen has combined the expertise and pipeline of the two companies. The companies have retained facilities both in the United States and Singapore. This provides access to very different markets and target groups for clinical trials and maintains two teams of researchers with their own areas of expertise (15, 16).
Bioengineering: “Singapore’s key research strengths are in bioengineering and medical devices,” says Ai San Yip, commercialization associate at Exploit Technologies, a member of the Agency for Science, Technology, and Research (A*Star). One example is Bio-Scaffold International, a privately owned biomedical company. The company started marketing research equipment but then moved into R&D. It has developed a patented technology working jointly with A*Star, and the f
irst product commercially marketed is a biodegradable scaffolds for guided tissue engineering This change of direction grew out of a collaboration with the Singapore National Science and Technology Board (NSTB) and the Gintic Institute of Manufacturing Technology. Bio-Scaffold holds a joint patent with the A*Star. The biodegradable scaffolds are made from PLGA — a copolymer approved for use in medical devices, and allow cells to grow through and replace the scaffold with new tissue. The use of this synthetic polymer eliminates the fear of infection and cross contamination that can be linked with the use of biological materials such as animal bone.
Bio-Scaffold launched its first biodegradable scaffold (Alvelac) in Singapore in 2008. The technology is used to fill dental sockets and stimulate bone growth after tooth extraction. In 2010, it had its first international launch, into the United Kingdom, through a distributor. “We chose the UK because it is a key center of dental and medical excellence, and its update there validates our product,” says Liew. “We have a CE mark, so we plan to move into the rest of Europe. Our next step will be to develop bioscaffolds for reconstructive cosmetic and orthopedic surgery.” According to Liew, the company progressed from its initial idea to the market in around five years.
Liew’s advice for companies in the Asia–Pacific that want to move into international markets is to make sure that their products and technologies are good, work with partners, and invest in marketing. Overseas companies moving in to Singapore should also take advantage of the government agencies to open doors. “Singapore is business friendly, and although it is a small market, it’s a good base for moving into Southeast Asia,” says Liew.South Korea: A High-Tech Focus
The South Korean pharmaceutical market is expected to reach around $14.75 billion in 2012. Its national government has made biopharmaceuticals and medical technology key areas for development focus. South Korea is home to around 250 life sciences manufacturing companies, and many of these are growing at a double-digit rate (17).
“In recent decades, the South Korean government recognized that the next ‘big thing’ would be biotech and started investing public funding in this through grants and investments,” says Antonio S.J. Lee, associate director of business development and R&D Strategy at Medipost. Two medical clusters in Osong and Daegu have already received government investments of around $5 billion.
South Korea is another Asia–Pacific hub for stem cell therapies, with high levels of public interest, little ethical resistance on adult stem cells, and national government support and funding, explains Lee. “South Koreans are generally very well educated in science and are interested in high-end medical technology, including stem cells.”
Medipost, based in Seoul, is developing stem cell drugs based on human umbilical cord blood-derived mesenchymal stem cells (hUCB-MSCs), funded through its services as a cord blood bank and other government grants. The company’s lead product, Cartistem, has completed phase 3 trials for knee cartilage regeneration and is pending approval in South Korea. Following approval, this would be marketed in collaboration with Dong-A Pharmaceuticals and would be the world’s first hUCB-MSC derived adult stem cell drug for treating osteoarthritis. Medipost receivedclearance to begin phase 1–2a trials in the United States. The company has other stem cell products in its pipeline: Neurostem-AD in phase I for Alzheimer’s disease; Pneumostem in phase 1 for bronchopulmonary dysplasia; and Promostem in phase 2 to support hematopoietic stem cell transplantation.
“The challenge we face in South Korea is that we are in a small country, so we need to be in a global rather than just a domestic market. The lack of clear guidelines on mass-manufactured allogeneic stem cell drugs may not allow us to immediately launch our stem cell drugs worldwide” says Lee. “The scandal of the faked stem cell research in the mid 2000s has also damaged the reputation of South Korea and Asia, and we have had to work through this. But South Korea has all the ingredients to encourage the biopharmaceutical industry — high standards of medicine, great infrastructure, government support, good human resources, and public support.”Malaysia: Growing Fast
Malaysia’s pharmaceutical market is expected to reach $1.75 billion by 2014, with strong growth in generics predicted (18, 19). The country’s growth in its biotechnology sector has been driven by the support from the government and the adoption of the National Biotechnology Policy (NBP). Malaysia’s very small market includes government-sponsored and privately owned CMOs. “Those companies are manufacturing drugs for export, rather than for the domestic market,” says Wheelwright.
“Once locations such as India become too expensive, locations such as Vietnam, Malaysia, and Indonesia will be interesting. To develop their biopharmaceutical skills, companies need a ‘seed’ — such as the Pasteur Institute in Vietnam. This creates the initial expertise, and then companies will spin out,” adds Harris.Strength in Diversity
The Asia–Pacific is a vast and diverse region, but certain themes are common for all its countries: government investment, growing markets, changing disease and population demographics, and well-educated workforces. Vast differences among individual countries in the region (and especially with Europe and the United States) are well recognized. Although those difference can pose certain challenges, they also can be strengths.
Rather than just being a location for cost-effective production, the Asia–Pacific region is now a burgeoning market for manufacturers seeking new customers, a source of innovation, and an exciting R&D center for pipeline-poor biopharmaceutical companies hungry for new products. For those companies prepared to work across cultures, languages and time zones, this is a region to watch.
Corresponding author Suzanne Elvidge is a medical writer and editor;