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2011 Scrip Asia 100: Asian-flavoured pharma deals

This article was originally published in Scrip

Executive Summary

Over the past year, companies from China, India, Japan and South Korea dominated licensing activity in the Asia-Pacific (APAC) region, as might be expected given the sizes of their pharmaceutical markets and growth prospects, write Patricia Giglio and Dr Brian Bialkowski of MedTRACK. This article is part of the 2011 Scrip Asia 100.

At 33%, the proportion of total APAC product deals accounted for by drug licensing and development agreements was higher than the figures for US and European counterparts, at 23% and 25%, respectively (see Table 1).

The number of Asian transactions is on the rise compared with the previous year. In particular, Indian companies showed a marked increase in licensing activity, signing 17 deals, up 50% (see Table 2). This is a sign that Indian companies are increasingly using business development to support the strong R&D activity that is being carried out in the region.

Table 1: Licensing as proportion of total product deals*

Region 2009 2010 US 20% 23% EU 24% 25% APAC 22% 33% China, India, Japan, South Korea 23% 35% *March 2010-March 2011
Source: MedTRACK

Chinese firms' dealmaking activity was level with India's; MedTRACK counted 18 transactions within the 12-month period, representing a 30% increase. Chinese companies are starting to broaden their focus beyond the generics market and are looking to establish themselves as viable players in the drug development space.

Table 2: Asian licensing and venture financing deals by country*

Country Number of licensing deals Number of venture financings Australia 9 9 China 18 28 India 17 9 Indonesia 1 0 Japan 24 9 Malaysia 1 2 New Zealand 0 1 Philippines 0 0 Singapore 4 5 South Korea 17 1 Taiwan 3 3 Thailand 0 0 Vietnam 0 0 *March 2010-March 2011
Source: MedTRACK

The more developed APAC markets showed a different picture: Japanese companies maintained their leading position, signing 24 deals, but Australian licensing deal activity in the life sciences decreased by roughly 30%, consistent with the decline seen over the past five years.

Within the APAC region, deal distribution by therapeutic area mirrored the rest of the world, with cancer and CNS-focused transactions leading the way. Notably, India displayed a particularly strong focus on infectious diseases compared with the rest of APAC.

In general, venture capital investment remained modest throughout Asia, where companies have historically been less reliant on venture funding. Investments remained on par with the year before and, while Chinese companies experienced a slight increase in the number of investments, the average value per investment remained similar to the previous year. This stands in contrast to the US and EU settings, both of which experienced a decline in capital investments, continuing the downward trends seen over the past few years.

Dealmaking activity is driving R&D growth in APAC, while Western companies continue to capitalise on the commercial opportunities of emerging markets. With Western pharma facing greater resource constraints, and countries such as China and India offering lower costs and rapid economic growth, APAC is on the path to becoming a hub for drug development.

Figure 1: Asian licensing and venture financing deals, March 2010-March 2011

Source: MedTRACK

Click on the map to zoom

Patricia Giglio is a product analyst at Life Science Analytics and Dr Brian Bialkowski is MedTRACK's product manager. This article is part of the 2011 Scrip Asia 100 Business chapter. Also in this section:

Asia life science-focused VC firms

M&A Watch

Japan pharma: post-quake analysis

Five ways to get it right in India

Read the full Scrip Asia 100 analysis, including league tables of Asia's top pharmaceutical players, interviews with the leaders of domestic companies and multinationals, product approval and clinical trials data, and analysis of how pharma should address Asia's diverse and evolving regulatory systems at scripasia100.com.

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