Korean Pharmas Seek Tie-Ups, Support To Enter Pharmerging Markets
Kimco To Lead Government Project
Executive Summary
Through its latest government-linked project, Korean pharma consortium Kimco aims to speed up industry collaboration and step up technology competitiveness to move into rapidly growing pharmerging markets.
The Korea Innovative Medicines Consortium (Kimco), the first joint investment and development consortium to be set up by South Korean pharma firms, will lead a new government project to support the industry’s entry into global "pharmerging" markets.
South Korea’s Ministry of Trade, Industry and Energy has selected Kimco to head a joint initiative to develop incrementally modified existing drugs making use of value-added formulation technology, or other changed properties to add benefits and improve effectiveness or patient compliance, dubbed collectively technology-based medicines (TBMs).
“The project is meaningful as Korean companies will form a consortium to carry out a government policy project and enter the global markets,” Kimco said.
Kimco was established in 2020 by the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, and 56 pharma firms in the country to support R&D into infectious disease therapies and vaccines, as well as potential global blockbusters, with the aim of supporting global market entries.
Korean pharmas are adopting diverse approaches as they seek to internationalize to pursue higher growth and new opportunities outside the limited expansion of the domestic market. Some have already been looking at entering large emerging markets such as Indonesia and Brazil.
Through the new government project, Kimco plans to speed up collaborations and maximize technology competitiveness through a public-private consortium model, something that has already been actively pursued in some other countries to accelerate innovation and more recently to address the emergency pandemic situation.
The notable parallel example is the Innovative Medicines Initiative jointly set up by the European Commission and members of European Federation of Pharmaceutical Industries and Associations.
Support For Seven Firms
Kimco will provide a total of KRW20.2bn ($18.1m) in funding, supported by the government and private sector, over the next three years and nine months (to the end of 2024) to seven companies - Daewon Pharmaceutical, DONGKOOK Pharmaceutical Co Ltd, Rex Pharm Tech, Addpharma, Wooshin Labottach and Yuhan Corporation - to move ahead with projects for the clinical development and launch of long-acting injections, nano-solubilization technology and controlled delivery drugs.
Target markets will include the Association of Southeast Asian Nations, Middle East, Commonwealth of Independent States as well as Central and South America, and the longer term aim is to create an expanded open innovation environment involving matching between both major and smaller companies conducive to Korean firms’ development of global blockbusters.
Kimco said one hope is to combine leading firms’ know-how in development, approval, manufacturing and global infrastructure entry with smaller firms’ competitive R&D technologies.
The total pharmerging markets, excluding China, are valued at about $216.1bn, accounting for 17% of the global market. In particular, the ASEAN region, which accounts for about 9% of the world populations, is emerging as a "blue ocean" opportunity, according to Kimco.
However, it notes that many pharmerging markets still do not have fully established approval systems and regulations for TBM products, market entry barriers which have made it difficult for Korean firms to secure local infrastructure and advance into these markets.
Other Support Activities
Kimco was established in August last year as the Korean pharma industry moved to take on a more active role amid the pandemic.
Since its establishment, the group has reached an agreement with the major Naver domestic online business platform, bioventure Syntekabio and an AI-based new drug development support center to develop COVID-19 treatments and new drugs.
Kimco was also designated by the government to lead measures to upgrade manufacturing facilities for COVID-19 therapies and vaccines, with the aim of bolstering Korean firms’ capabilities and stabilizing the supply and demand condition.
The government is setting basic policy and strategies for such projects as well as planning, evaluating and managing research projects, while Kimco will actually proceed with individual projects.