New Korean Fund Aims For Stem Cell, Gene Therapy Edge
This article was originally published in PharmAsia News
Executive Summary
As some local biosimilar firms such as Celltrion have already got their feet firmly on the ground, the South Korean government is now shifting its strategic focus to support for stem cell and gene therapy ventures to help them advance into a global market where no clear leader has yet emerged.
SEOUL – Four South Korean government ministries, including the Ministry of Science, ICT [information and communications technology] and Future Planning, the Ministry of Health and Welfare and the Ministry of Food and Drug Safety, have jointly announced that the government is to invest a total of KRW340 billion ($305.4 million) in 2015 to support and nurture stem cell and gene therapy firms.
The government sees no clear international leader in the two biomedicine sectors and thinks that South Korea should therefore step up its efforts to develop a stronger position.
The move also comes against a background of recent decisive policy steps by neighboring Japan, which late last year enacted new and revised legislation to encourage the development of regenerative medicines, in a move broadly welcomed by the industry (Also see "Japan Regenerative Medicine Laws Take Effect, Encourage Industry" - Scrip, 4 Dec, 2014.).
Announcing the “Bio-health Future New Industry Promotion Strategy,” the Ministry of Science, ICT and Future Planning observed that the stem cell and gene therapy industry is still “at an infancy stage”, but predicted that the broader global "biohealth" market will - after the year 2024 - eventually outstrip the total markets for the country’s long-standing top three industries of semiconductors, chemical products and cars.
Under the new strategy, the government will provide companies in the sector with customized support and investments ranging from the discovery of projects, through clinical trials to the effort for approvals from foreign countries such as the U.S. FDA, and then help with actual sales in global markets.
For stem cell and gene therapy firms, the government will pursue market-centered R&D policies and “customized total package support” to help them explore and then actually invest in the sectors.
South Korea’s stem cell therapies are already potentially globally competitive in terms of technology and clinical trials, said the Ministry of Science, ICT and Future Planning. Of the five globally commercialized stem cell products, four originated from the country, which also ranks second in clinical study cases, it noted.
At one point, South Korea’s national focus and interest in the stem cell sector appeared to be in decline following the scandal over cloning scientist Hwang Woo-Suk and the legal battle over his discredited research (Also see "Court's Suspended Prison Sentence Brings Disgraced Korean Cloning Researcher A Step Closer To Return To Life Of Science" - Scrip, 28 Oct, 2009.).
After the controversy, then-President Lee Myung-bak, who left office in Feb. 2013, expressed his intention to regain the country's position as a stem cell research powerhouse. In 2011, the government said it would invest KRW100 billion - through an inter-ministry team - in stem cell research to restore the country's reputation as the world's capital of embryonic stem cell research, which was severely tarnished in 2005 when Hwang was found to have fabricated stem lines and research results (Also see "Korea Launches Inter-agency Body To Stimulate Local R&D, Earmarks $440 Million For Program" - Scrip, 27 Sep, 2011.).
Biosimilars Excluded
“The latest policy and the investment of KRW340 billion in 2015 will be basically focused on local Korean stem cell medicine and gene therapy firms, not biosimilar companies, which we think are armed with enough power to stand on their own feet now,” the ministry said.
Some biosimilar companies are known to be financially well supported, being linked to powerful family-controlled business conglomerates.
Samsung Bioepis Co. Ltd., a unit of the giant Samsung Group, is trying to position itself in the biosimilar market, and recently applied for the approval in South Korea of production and sales of SB4, its biosimilar version of Amgen Inc.’s arthritis blockbuster Enbrel (etanercept) (Also see "Samsung Bioepis Files Biosimilar Enbrel In South Korea" - Scrip, 16 Mar, 2015.).
Biosimilar frontrunner Celltrion Inc. is also widening its position in the global biosimilar market and moving to sell Remsima, its version of Johnson & Johnson‘s Remicade (infliximab), in 12 more European countries beginning February (Also see "Celltrion To Launch Biosimilar Remicade in More European Countries" - Scrip, 9 Feb, 2015.).
More widely, the government is encouraging more and more South Korean companies to move beyond traditional chemical generic drugs to globally competitive products including biosimilars. The health ministry recently launched its second “Global Pharma Industry Development Fund” worth KRW135 billion to help small and mid-sized local firms with cooperative technology development, deals with foreign venture firms, sales networks and production facilities in foreign countries, as well as international clinical trials.
The ministry injected KRW20 billion, while the remaining KRW115 billion was raised from the Korea Development Bank, Korea Investment Partners, Korea Investment and Securities and Industrial Bank of Korea (Also see "South Korea Launches Second Pharma Development Fund" - Scrip, 24 Feb, 2015.).
The Ministry of Science, ICT and Future Planning said the health ministry’s KRW135 billion fund - announced in February - is different from the latest four-ministry investment of KRW340 billion in stem cells because private firms also contributed to the earlier program.