Setting Sights on Korea as a new Biotech Hub

Demographically, South Korea has been an appealing investment opportunity for pharma companies. It has a relatively large population of around 51 million people, spending on healthcare is increasing steadily, and its aging population – which accounts for 16% of the total population – spend the most on healthcare (Han, 2021).

However, intellectual property (IP) laws have historically made it difficult to secure patent protection for novel drugs, which has often prevented strategic partnerships between U.S. and Korean biopharma companies. Similar challenges have been faced by the U.S. biopharma market with China, which is looking to strengthen its IP laws, and market itself as an R&D leader in the biopharma space, especially in the discovery of novel cell and gene therapies.

This year however, the Korean Supreme Court broke new ground by relaxing restrictions around what constitutes a novel therapeutic invention (Han, 2021). The previously stricter limitations required that a new therapeutic breakthrough demonstrate “remarkable effects” compared to therapeutics in the same or similar class, which resulted in lack of protection. Generic drug companies in Korea could easily access to an innovative company’s invention and able to sell it for a fraction of the price to the general public. Weak protection of innovative therapeutics made the prospect of partnership with a Korean biotech unappealing to many U.S. biotech companies until now.

The strengthening of IP protections by the Korean Supreme Court supports the Korean government’s vision of Korea as a biopharma industry leader in the coming years, especially within R&D and innovation of novel therapeutics. Several government investment funds over the last decade have been started to enable Korea to become an international player in the biopharmaceutical industry, such as the Korea Drug Development Fund (KDDF), and a $1.7B five-year biotech plan initated in mid-2019.

The KDDF began operating in 2011, and has poured over $1B into supporting the 100 most promising drugs in development in Korea, providing them with funds and business development support. Through this initiative, KDDF is helping to move drugs out of laboratories and into the global pharmaceutical market (KDDF, 2021). Since its inception, KDDF has played a role in licensing 34 deals worth $4.7B, many with global companies. Deals in the pipeline weigh heavily in oncology, CNS diseases, Immunology, metabolic disorders, and infectious disease. The organization is now on a mission to help its current in-process programs find partners, which will be made easier with the recent change to IP laws.

In Summer 2019, South Korea also launched a five-year, $1.7B plan for biotech-related research, development, and commercialization (Global Data Healthcare, 2020). The plan aims to help South Korea capture 6% of global pharmaceutical and medical device manufacturing by 2030, and to export $50B of product. It will also be used to support the development of domestic biopharma startups and blockbuster drugs (Global Data Healthcare, 2020).

Korea’s rapid and efficient response to the COVID-19 pandemic, as well as its impressive production of biosimilar pharmaceuticals has also facilitated in the global biopharma industry seeing Korea as a new biotech hub. To date, at least five Korean companies have COVID-19 vaccines in trials, and the country aims to reach herd immunity by the end of 2021 with their own vaccine candidates. Private investments fueled by COVID related deals have also expedited the biopharma innovation, such as deals made between Novavax and AstraZeneca with SK Bioscience, a South Korea-based CDMO (Parrish, 2021).

Even before the pandemic, for the past 5 years, Korea’s pharma industry has been expanding by an average of 5.4% per year, and finished drug products, in particular biosimilars, are the majority of what the industry produces (Parrish, 2021). Bioepis, a collaboration between global biopharma company Biogen and Samsung Biologics (based in Incheon) have developed nine biosimilars products together that have won global approvals (Parrish, 2021).

The combination of focus on innovation and R&D by the government, changing Korean law that allows easier collaboration between companies, and government funding as well as private investment have all contributed to the inception of Korea as a new biotech hub.

As life sciences executive search consultants at BayBridge, through deep analysis of the global biopharma market and inquiry through our networks, we have anticipated the arrival of Korea as a new biotech hub, and have worked diligently to build relationships with client and talented individuals working as multinationals in Korea and the U.S.

The necessary placement of the best biotech executive leaders in Korean biotech hubs will only continue to increase in the coming years, and working with the talented life sciences executive search consultants at BayBridge guarantees only the best candidates are put forward for these roles.

If you’re interested in learning more about BayBridge’s Talent Management approach to executive search, please get in touch with one of our expert life sciences consultants today.

References

Global Data Healthcare. (14 December 2020). South Korea: Biologics production and Covid-19 deals boost bio/pharma industry. Pharmaceutical Technology. https://www.pharmaceutical-technology.com/comment/south-korea-biologics-production/

Han, S. (1 November, 2021). Why South Korea is now more attractive to U.S. biopharma. Life Science Leader. https://www.lifescienceleader.com/doc/why-korea-is-now-more-attractive-to-u-s-biopharma-0001

Korea Drug Development Fund. (Accessed 17 November 2021). KDDF: A rich source of innovative drugs for global pharma companies. Nature. https://www.nature.com/articles/d43747-020-00682-4

Parrish, M. (21 June 2021). Global Dose: Focus on South Korea. Pharma Manufacturing. https://www.pharmamanufacturing.com/articles/2021/global-dose-focus-on-south-korea/