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Insight & Intelligence™ : Mar 31, 2014

Top 8 Biopharma Clusters in Asia

GEN's algorithm reveals the East's most promising regions.

Following is GEN’s ranking of the top eight biopharma clusters in Asia. Western drug developers may well have sown the proverbial seeds for the biopharma industries that have grown in and near Asia over the past generation by seeking countries where they could manufacture drugs, tools, and technologies for less than in Europe or the U.S.

Still, the countries deserve much of the credit for leveraging the influx of big pharmas, then spending sizeable sums of their own money, to build clusters that are increasingly growing domestic developers of drugs, diagnostics, and tools and technologies, fueled by research from universities and research institutes.

#8. Malaysia

Next year marks 10 years since the country established its National Biotechnology Policy aimed at growing the industry into a 5% contributor to GDP by 2020. With six years to go, Malaysia has some accomplishments—including its number of companies (seventh with 200 as of 2012), thanks in part to the BioNexus incentives program. A Malaysian billionaire, Genting Group Chairman Tan Sri Lim Kok Thay, is lead investor in J. Craig Venter’s Human Longevity, which vows to assemble the world’s largest human gene sequencing operation. And on Wednesday, Indonesian-based Kimia Farma said it will expand its Malaysian presence beyond a single dispensary in Sepang: “The number will increase. Our sales in Malaysia have continued to increase,” corporate secretary Djoko Rusdianto told Antara News. Malaysia also placed eighth in patents (1,190) and R&D spending ($4.953 billion in 2011).

#7. Singapore

The dazzling Biopolis that anchors Singapore’s biopharma industry reflects how far the multi-ethnic city-state has come in building one of Asia’s fastest-growing industry clusters. Singapore hosts many of the largest industry giants including, Bayer, GlaxoSmithKline, Novartis, and Roche, which account for many of its biopharma jobs (37,735 in 2012). The country is sixth in venture capital ($17.7 million to three companies), and sixth in patents (3,068), but lower in number of companies (eighth at 95 as of 2012), and R&D (seventh at $6.987 billion, of which more than $1.5 billion is for biomedical research)—though considerable research activity occurs at 30 public-sector institutes under the Agency for Science, Technology and Research (known as A*STAR) and the Ministry of Health.

#6. Australia

Despite embracing biopharma later than many Asian countries, Australia is actually second in the number of biotech and pharma patents (10,599), and fourth in number of companies (527 in 2011). The country saw investors flock to biopharma following the collapse of gold prices and an imploding mining sector, boosting both giants like ASX and new launches: “How biotech finally boomed,” the Sydney Morning Herald headlined a feature on the industry in January. Australia ranked fifth in venture capital awards ($26.1 million to five companies) and sixth in IPOs ($6.8 million to Algae Tec in 2011). The land Down Under is also sixth in R&D spending (about $20.5 billion in 2010) but lags in number of jobs (13,000 as of last year).

#5. Taiwan

Officials have set their sights on growing biotech for some two decades, and since 2007 have passed three laws designed to improve the business climate, joining with private funds to raise more than $2 billion for startups. One priority has been government R&D funding, where Taiwan ranked fourth by spending about $27.5 billion. That spend has helped build jobs (19,332 in 2011) and homegrown businesses, where Taiwan ranks fourth in IPOs ($25.1 million to a single company, Taiwan Liposome in 2012) and sixth in number of companies (400 in 2011). The country ranked seventh in both patents (2,281) and 2013–14 venture capital, thanks to the $17 million won by Senhua Biosciences in December.

#4. South Korea

Taking office last year, President Park Geun-hye excited biopharma industry leaders with her vision of a “second miracle on the Han River.” The first was the transformation of the country a generation ago into an economic powerhouse by tying manufacturing with growth in several tech sectors—including biopharma, where South Korea shines in number of existing companies (second at 857 in 2010) and R&D spending (third at $65.394 billion in 2012). Earlier this month, Sanofi Pasteur said it will join homegrown SK Chemical to build a pneumococcal conjugate vaccine plant in Angdong. Domestic public company growth has stayed steady; South Korea finished fourth in patents (8,739) and fifth in IPOs ($17.5 million raised by a single company, Seegene) but startups lag, judging from a dearth of 2013–14 venture capital awards.

#3. India

FDA Commissioner Margaret A. Hamburg, M.D., tried to balance criticism of some Indian drug manufacturers with praise for the country’s progress in building one of Asia’s biggest biopharma clusters with some 50,000 jobs (as of last year) during her recent trip to the subcontinent. Yet these days, even some industry professionals are critical; Krishna Ella, CMD of Bharat Biotech, complained: “Students who graduate do not even know how to handle lab equipment sometimes.” India’s strengths are in company growth, ranking second in VC activity (more than $66 million to four companies) and fourth in IPOs (thanks to Claris Lifesciences raising $80 million in 2010). However, the country is fifth in both number of companies (about 500 as of last year) and at least fifth in R&D spending (figures range from $24.3 billion in 2007 to an estimated $40 billion in 2012), as well as fifth in patents (4,793).

#2. Japan

The Land of the Rising Sun may soon be eclipsed in biopharma by China, whose great leap forward over a generation contrasts with Japan’s economic stagnation. Prime Minister Shinzo Abe vows to grow a biotech industry alongside the legacy cluster of pharma giants, in part by speeding up decisions on new drugs and stepping up R&D spending; the nation will soon consolidate three agencies into a single research funding source akin to the U.S. NIH. Japan trails China in overall R&D funding (second at $151.8 billion in 2012); biomed R&D numbers vary wildly. There’s no question Japan’s on top in patents (39,797) and recent IPOs (nine companies raising $2.636 billion)—though the IPO figure was skewed by Otsuka Holdings’ $2.4 billion offering in 2010—while Japan finished third in companies (538 in 2011) and fourth in venture capital ($47.1 million to four companies).

#1. China

China didn’t grant patents until 1984, and didn’t issue patents for biopharma inventions until eight years later. That explains why the world’s most populous nation, which is at or near the top in many of GEN’s cluster criteria, places only third in biotech and pharma patents with 9,302. In the decades that have followed, China has caught up impressively in biopharma, leading Asia in R&D spending ($160 billion biomedical of a $243.4 billion recorded by OECD), companies (7,500 as of last year), jobs (more than 250,000 as of last year), and venture capital ($73.9 million to five companies), while coming in second to Japan in IPOs (just under $2.1 billion raised by an Asian-leading 14 companies). Years of massive government spending on research explains why, as does a domestic pharma-and-herbal medicine sector growing with global biopharma giants, many drawn by lower-than-Western labor costs.