Cultivating Taiwanese Biotech

Called Ilha Formosa (beautiful island) by Portuguese explorers, Taiwan has proven to be an attractive location for an array of high-tech industries. Revenue at Taiwan’s three major science parks—Hsinchu Science Park, the Central Taiwan Science Park and the Southern Taiwan Science Park—is expected to top TWD 2 trillion ($60.8 billion) in 2007, according to Taiwan’s National Science Council (NSC). The country has been a force in the electronics industry for a number of years, but biotech is now on the rise, thanks to significant support from the Taiwanese government and partnerships among foreign biotech companies, Taiwanese biotech firms and the Taiwanese government. Many of the major companies in the life science instrument industry have offices in Taiwan, including Applied Biosystems, Invitrogen and Beckman Coulter. Earlier this month, Dionex announced that it would open a subsidiary in Taipei. While the electronics sector is Taiwan’s leading industry, and the country is on the verge of becoming one of the global powerhouses in the semiconductor industry, the biotech sector does not provide the same short-term gains that the electronics industry does. As Ho Mei-yueh, minister of the Council for Economic Planning and Development, explained to the Taiwan Journal, biotech requires a longer-term investment and involves higher risks than the electronics industry. The Industrial Development Bureau of the Ministry of Economic Affairs announced that revenues from the Taiwanese biotech industry in 2006 reached an estimated TWD 177.2 billion ($5.5 billion), an 11% increase over 2005. The Bureau also estimated that the biotech industry has grown an average of 12% between 2001 and 2006. However, this is only a fraction of the global market for biotech and pharmaceutical manufacturing. In response, the government is taking a number of steps to nurture the biotech sector. These efforts include tax incentives for biotech companies and investment in new biotech facilities and programs. In June, the Taiwanese legislature passed the Biotech and New Pharmaceutical Development Act. The Act extends a 35% tax break on R&D and personnel spending for biotech companies and allows employees of government research institutions to consult for private companies, develop drugs with them and hold shares. The Act will stay in effect until 2021. In order to bring Taiwanese pharmaceutical companies into accordance with international standards, Taiwan’s Department of Health is requiring all pharmaceutical manufacturers to comply with the standards set out in the EU’s Pharmaceutical Inspection Convention and Pharmaceutical Inspection Cooperation Scheme. Companies must comply with the new regulations by 2009. The Taiwan Pharmaceutical Manufacturer’s Association estimates that compliance costs for the 168 pharmaceutical companies in the country will be TWD 100 million ($3.0 million) per company per project. Science park programs have been successful for improving the high-tech output of a number of countries, and Taiwan is no exception. Construction of a biotech park for medical research adjacent to Hsinchu Science Park began in September 2006 and should be complete by 2009. Another biotech park, located in Kaohsiung, is expected to be completed by 2010. Construction of a biotech park in the Nangang District of Taipei will begin in 2012. Academia Sinica, Taiwan’s leading research institution, plans to invest TWD 15 billion ($455.9 million) in research at the park on genetics, translational medicine and drug development, with an emphasis on clinical experiments, and the NSC has pledged TWD 12.1 billion ($367.7 million) to support the park’s infrastructure development. Foreign biotech companies have also been increasing their presence in the country. In December 2006, Pfizer CentreSource, a subsidiary of Pfizer that produces active pharmaceutical ingredients (APIs), entered into an agreement with ScinoPharm, a Taiwanese pharmaceutical manufacturer that maintains an FDA-approved facility, under which Scinopharm will manufacture steroid APIs for Pfizer. In January, the Japanese pharmaceutical firm Tanabe Pharmaceuticals raised its nonprescription drug production in Taiwan from 6% to 25% of its total output. In June, it was announced that Genentech would start a research venture with the Taiwanese government, founding a lab at Hsinchu to focus on AIDS treatment. The venture, which will be called TaiMed, is expected to receive TWD 3 billion ($90.5 million) for its first three years.

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