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Spotlight on Asia


In the US and Europe, businesses and policymakers worry about how to create the next biotech center of excellence in their own backyard. Is it just a matter of pumping money into a fancy new research institution or encouraging venture capital investment, they wonder, or is there something deeper and more entrenched, like a long-standing tradition of academic excellence at local universities that also encourage their researchers to transfer their discoveries into the private sector?

It’s one thing to consider these issues on the scale of one metropolitan area, another when you think about creating the conditions for a viable biotechnology sector in a whole country — or an entire region of the world, for that matter.

Take Asia, for example. To generalize quite broadly, countries like India, Korea, and China — with the notable exception of Japan — all currently have rapidly growing economies, and certainly all have rich supplies of skilled workers. What would be required to create viable, competitive pockets of academic and commercial expertise in the life sciences?

Drilling down to India may prove a useful test case. In the past two decades the Indian subcontinent has experienced a remarkable period of economic growth, brought on by economic liberalization policies implemented in the 1980s and the subsequent transfer of labor-intensive industries from the US and Europe to India, among other Asian countries. In the area of technology and life sciences, Indian engineers have succeeded in establishing a robust computer programming sector; a strong pharmaceutical industry has emerged as well.

In recent years, Indian industry and academic scientists have begun providing services for life science companies based in the US and Europe, writing software for mass spectrometry instrumentation, for example, and analyzing gene expression experiments for labs and companies overseas. But what are the factors that would be required for India to make the jump from providing commodity services to creating a biotechnology sector in its own right?

According to policymakers, scientists in India, and consultants to the life sciences industry, there are at least four: providing ready access to government funding, venture capital, and commercial loans; establishing centers of academic excellence useful as breeding grounds for new ideas; an intellectual property regime conducive to protecting new inventions; and last but not least, creating a commercial climate that promotes entrepreneurial activity.


For a developing economy, access to capital is potentially the most elusive element necessary to creating a homegrown biotechnology sector. That said, the Indian government is making an effort to divert funds toward helping young companies perform proof-of-principle studies and develop early-stage products. In a draft report published at the end of March, the Indian Ministry of Science and Technology’s Department of Biotechnology proposed instituting a scheme similar to the Small Business Innovation Research grants available to startup businesses in the US. The report also proposes to encourage commercial lending to biotech startups by providing incentives to banks through the Reserve Bank of India.

Meanwhile, India may be in the relatively unique position of experiencing a trend in “reverse brain-drain.” Although the rate of Indian scientists and businesspeople returning to their homeland after acquiring education and business experience in the US and Europe may not yet outweigh immigration in the opposite direction, the trend is significant, according to an Ernst & Young research report. In terms of capital, scientists and businesspeople returning to India have the opportunity to raise venture funding overseas, says M. Vidyasagar, a former professor at the University of Waterloo, Canada, who returned to India in 1993 and now serves as executive vice president in charge of advanced technology for Tata Consultancy Services in Hyderabad.

Indeed, Vidyasagar says VC firms from the US and other developed economies are taking trips to India to seek promising investment opportunities. “Some of the venture funds have started coming to India because they find that there are probably just as good ideas there as in the US, and the Indian venture firms aren’t that strong,” he says. “We do see US-based venture firms coming to India in fairly large numbers; we didn’t see that happening a few years back.”

Academic centers

Creating world-class academic centers is in theory another prerequisite to establishing a viable biotechnology sector. On that front, India has a reputable educational system, especially in technical fields. Graduates from the various branches of the Indian Institute of Technology, for example, are known for their strong grounding in the sciences and engineering. Tata’s Vidyasagar says majoring in science and engineering is very popular among Indian students. The problem, however, is that many of the most promising graduates go on to pursue postgraduate degrees in other countries — often never to return.

In its National Biotechnology Development Strategy, the Indian Ministry of Science and Technology points out potential measures to limit such “brain drain.” Expanding the number of PhD fellowships paid for by the Indian government should encourage Indian students to pursue postgraduate work in their homeland, as should providing additional funding to support young faculty members establishing their labs in Indian universities.

Anuradha Acharya, co-founder and CEO of Ocimum Biosolutions in Hyderabad, says the Indian government’s actions to promote life sciences research and business are encouraging Indians overseas to return and get involved in India’s fledgling sector. The government’s incentives are at the very least creating a buzz about life sciences in India, which appeals to Indians overseas looking to get in on the action, she says. “People think there’s something happening here, and they’re curious,” says Acharya, who worked as a manager in the US before returning to India in 2000. “Once they find out what’s going on, they know that they’re coming back at a stage when they … can play a crucial role.”

But the country has a long way to go before it has world-renowned research institutions capable of attracting the most talented students and researchers, says Vidyasagar. On one hand, pay scales for academics in India are still markedly lower than in more developed countries — Indian government grants notwithstanding. Furthermore, a smart researcher would be drawn to the most reputed academic centers that already exist, which right now happen to be in the US and Europe. “Honestly speaking, the Indian academics are not as strong as at MIT or Harvard — they’re really way ahead of everybody,” says Vidyasagar.

Intellectual property

Meanwhile, India has made significant progress in protecting intellectual property rights. In March the Indian government passed a bill amending its 1970 Patent Act to provide greater rights to patent-holders from competitors, a measure expected for years that brings India in line with World Trade Organization standards. The benefit to drug developers is tangible: in the past, Indian pharmaceutical manufacturing companies have prospered by creating alternative routes to synthesizing drugs already on the market; the new measure now makes it easier for those same drug companies — and biotech companies as well — to develop their own medicines with confidence that they can see a return on their investment.

The number of patents filed in India during the past few years in anticipation of the change in the intellectual property laws bodes well for Indian inventors. “We have a very good record of productivity if you link the number of patents to the amount invested, which suggests that if you scale the investment, the return from the investment is more in India, at least as measured by the number of patents,” says Vidyasagar.


Although a somewhat intangible aspect of promoting the development of a biotechnology sector, creating an academic and commercial climate that promotes entrepreneurial activity is nonetheless essential. In India, this is hampered predominantly by overly strict regulations governing the role that academic scientists can play in helping found new business ventures, says Vidyasagar, who contributed to the Indian government’s biotech report on this matter.

Acharya at Ocimum seconds this assessment, saying her initial reaction to government incentives when founding Ocimum was to steer clear of any bureacratic entanglements. But she says the past few years have shown that the Indian government is paying more than just lip service to promoting life sciences research. “Things are changing, and once you start seeing that there is a little [transparency], and the government is fair, then you know you have a chance. If it is not, if it is a biased government, then you don’t feel like going there,” she says.

The biotech strategy laid out by the Ministry of Science and Technology does contain provisions to help pave the way for new biotech startups. By 2010, the Department of Biotechnology aims to support at least 10 biotech parks across India, with government funding of up to 30 percent in the form of grants or 49 percent in the form of equity.

If India can be taken as a model for Asian countries hoping to establish themselves as players in the life sciences, it does highlight some formidable barriers. The Indian government’s biotech strategy report lays out a plan for creating a biotech sector, yet it remains to be seen whether funding will necessarily follow. On the other hand, says Vidyasagar, the relative immaturity of the biotech sector points to the many opportunities for investment. “We don’t really have a true biotech industry in India yet. We have a reasonably good pharma industry, but things like identifying new targets, validating new targets, or even coming up with biologics, I don’t think we have such a big R&D activity,” he says, “so if someone wishes to get into that, I think that’s a good field.”

Elsewhere in Asia…


With a per capita income of about US$24,000, Singapore has plenty of money to invest in biotechnology research. Lately this has taken the form of investments that help US or European companies and universities establish R&D outposts.

Last summer, with the help of Singapore’s Economic Development Board, Novartis opened a tropical diseases research facility in Singapore’s Biopolis — a biotech research campus near the National University of Singapore — that will initially focus on drug-resistant tuberculosis and dengue fever.

In addition, the Singapore government helped Lilly found an R&D group dedicated to systems biology research, and contributed funding to a branch of Baltimore’s Johns Hopkins University called Johns Hopkins Singapore that includes research efforts led by Daniel Chan, a JHU researcher who specializes in protein biomarker discovery. Even Germany’s Max Planck Institute has a satellite campus in Singapore’s Biopolis that is working to create a gene database of cancer cell lines and tumor tissues.


Like India, China has a well-developed pharmaceutical industry, and it also has a population of 1.3 billion, at least a large fraction of which is rapidly growing wealthier and more able to afford new therapeutics.

There are also examples of Chinese companies delving into the market for life sciences tools. CapitalBio, a Beijing-based biotech tools company, will begin making its LuxScan 10K Confocal Scanner available to the North American, European, and Asian markets this year.

Academic researchers in China have also taken the plunge into proteomics. The China Human Proteome Organization, a member of HUPO, is completing a three-year study of the human liver proteome, with the help of $16 million from the Chinese government.


As the second largest economy in the world, Japan has one of the most developed biotech industries, and a robust academic research enterprise in the life sciences to boot. Japanese researchers have taken a large role in genome sequencing — most recently sequencing the genome of Gabacilus kaustophilus, a thermophilic bacteria, and Lactobacillus helveticus CM4, a microorganism that helps produce an herbal supplement.

With strong pharmaceutical and life sciences tools sectors, Japan is one of the Asian economies best able to compete with the US and Europe. But the Japanese government is also taking measures to encourage partnerships between Japanese and foreign companies. In May, the government is sponsoring a week-long business partnering program in Nagoya to help US companies “best assess market opportunities and develop partnerships and alliances,” according to the Japan External Trade Organization.


Not to be left out, Taiwan has been starting up biotech companies and getting involved in global consortia related to systems biology.

The academic organization Academia Sinica-National Science Council, sponsored by the Taiwan government, joined Bristol-Myers Squibb, Eli Lilly, Novartis, and Sigma-Aldrich in pledging to contribute $3.6 million apiece to help fund the RNAi Consortium, a three-year public/private project recently unveiled by the Broad Institute, which is one of six research institutions attempting to create a library of RNAi molecules against human and mouse genes.

The private sector also sees its share of activity. Biowell, a Taiwanese company, has invested some $10 million to create a DNA-based security technology, which it is licensing to US-based Applied DNA Sciences.


Korea is also emerging as a major player in the Asian biotech arena, and no small part of that relates to its work in, and funding of, genomics. The country’s National Livestock Research Institute was one of several funding sources for the swine genome sequencing project, a program aiming to obtain six-fold coverage of the porcine genome.

The country also joined in to be part of the Pacific Pan-Asian SNP Initiative sponsored by the Human Genome Organization and Affymetrix. Scientists in Korea — as well as China, India, Indonesia, Japan, Malaysia, Nepal, Philippines, Singapore, Thailand, and Taiwan — will work in coalition to provide a comprehensive picture of the genetic diversity in Asian populations.

Another recent effort came in the form of a sequencing project: Korean researchers at Seoul National University, Ewha Womans University, and Macrogen completed the genome sequence of Zymomonas mobilis, an alcohol-producing bacterium.


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