Singapore, Nov 1, 2006: When it comes to ranking countries on biotechnology achievements in the Asia Pacific region, Malaysia doesn’t make it to top three. The country has not had a single successful biotech company in the last five years. Its much hyped BioValley did not get the expected response from foreign biotech companies. However, Malaysia is not giving up. Plush with natural resources and a biodiversity wealth, the country is taking steps to get into the top league of biotech superpowers. BioSpectrum looks into some key factors that will help Malaysia reposition itself in Asia.
Malaysia is one of the world’s 12 mega biodiversity centres with abundant natural resources. The government’s concerted efforts have resulted in the realisation of joint-ventures and collaborations between local and foreign parties in undertaking research and development (R&D) activities for the production of vaccines, diagnostic kits and other biotech related products.
The pharma sector in Malaysia focuses on biopharmaceuticals and branded generics including biogenerics in order to remain competitive. The local industry produces 25-30 per cent of the domestic demand, and also exports to Asia-Pacific Rim countries, the Middle East, Africa, Latin America and Europe.
With Malaysia joining the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Cooperation/Scheme (PIC/S), the country’s pharma exports are poised to grow in the coming years.
Malaysia enjoys a strong position in the medical devices sector; it supplies 80 per cent of the world market for catheters, and 70 per cent for rubber gloves. Other medical device products manufactured in Malaysia include syringes, surgical equipment, blood transfusion sets, blood pressure transducers, dialysis solutions, diagnostic radiography equipment, and orthopaedic products.
The medical devices industry in Malaysia conforms to internationally recognised quality standards such as the US Food and Drug Administration, Department Of Health (UK) and Bundesgesundheitsamt (Germany).
Strict regulatory and IP regime
Malaysia has a firm regulatory framework in place. The Drug Control Authority of the Ministry of Health controls the production, import and sale of pharmaceuticals and traditional medicines in Malaysia. The Intellectual Property Corporation of Malaysia (IPCM) works actively for better implementation of IP rights.
The country complies with agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). It is also a signatory of the Patent Co-operation Treaty (PCT) in 2003, facilitating patent registration and consequently protection to foreign inventions.
National Biotech Policy: In line with its ambition of becoming the third engine of growth for the Malaysian economy, the National Biotechnology Policy was unveiled 2005.
| The Policy Thrust |
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Malaysia’s National Biotechnology Policy encompasses nine thrusts which underline its commitment to the sector:
- To transform and enhance value creation of the agricultural sector through biotechnology.
- To capitalize on the strengths of biodiversity to commercialize discoveries in health-related natural products and bio-generic drugs.
- To leverage our strong manufacturing sector by increasing opportunities in bio-processing and biomanufacturing.
- To establish biotechnology centres of excellence in the country, where we bring together multi-disciplinary research teams in coordinated initiatives.
- To build the nation’s human capital in biotechnology via education and training.
- To develop financial infrastructure to support biotechnology.
- To improve the country’s innovation system by reviewing the country’s legal and regulatory framework.
- To build international recognition for Malaysian biotechnology.
- To establish a dedicated and professional agency to spearhead the development of Malaysia’s biotechnology sector.
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Agencies and centres of excellence
The government set up the Malaysian Biotechnology Corporation to identify good value propositions in both biotech research and commerce and provide financial help and development services. The corporation works closely with government agencies and relevant ministries such as such the Ministry of Health, the Ministry of Agriculture and Agro-Based Industries and the Ministry of Commodities & Plantation Industries.
Malaysian Biotechnology Corporation will also be working under the purview of the Ministry of Science, Technology and Innovation to enhance biotech R&D and to help improve regulatory environment.
Malaysia is also working towards developing BioNexus Malaysia, a network or nexus of centres of excellence from existing institutions around the country. As a start, resources were put into developing three centres of excellence.
- Centre of excellence for agricultural biotechnology to be focused around Malaysian Agriculture Research and Development Institute (Mardi) and Universiti Putra Malaysia.
- Centre of excellence for genomics and molecular biology in Universiti Kebangsaan Malaysia
- Centre of excellence for pharmaceuticals and nutraceuticals will be built in the original BioValley site in Dengkil.
Creating a conducive environment
In August 2006, the Malaysian Chapter of the Federation of Asian Biotech Associations (FABA) was launched to facilitate interaction between the industry and the government for encouraging investments in the biotech space.
To encourage biotechnology investment from private sector corporations, the government offers 100 percent group tax relief or deduction on qualifying investments in biotechnology.
It also offers a host of prepackaged tax incentives to biotech businesses including 10-year tax exempt pioneer status, exemption of import duties on approved equipment and materials, double tax deductions on qualifying expenses and R&D investments among others.To make biotech an attractive proposition for the VCs, the government is taking measures to facilitate their entry to the capital markets. The Malaysian stock Exchange, MESDAQ, takes into consideration the special characteristics of biotech companies with its long gestation periods and higher risk profiles.
Malaysia set up The Malaysian Life Sciences Capital Fund that is handled jointly by government-owned venture capital firm, Malaysian Technology Development Corp Sdn Bhd (MTDC), and San-Francisco based Burill & Co. Set up with a modest $40 million, the fund’s size today has reached $200 million in less than a year.
Out of the $200 million, $140 million will be invested in about 20 companies, while the remaining will be invested in the Burill Life Science Capital Fund.
Success Stories
One of the most discussed success stories of Malaysia is Innobiologics, country’s first full-fledged government-owned drug and biotechnology firm. The company boasts of having the Malaysia’s first ever cGMP-compliant biopharmaceutical production plant. Set up with an investment of $27 million from the government, this plant hopes to create new opportunities for Malaysia to venture into the production of biopharmaceuticals.
Another homegrown company that has done the country proud is Carotech, a leading supplier of phytonutrients and biodiesel products. The company can produce 45 tonnes of crude palm oil a day, which can be processed into either biodiesel or vitamin E.
Carotech’s parent company, Hovid Bhd., is one of the largest GMP-certified pharmaceutical companies in Malaysia.
Hovid has the largest export portfolio among all Malaysian owned pharmaceutical companies. It manufactures well over 350 generic pharmaceutical products, health supplements, injectable products and herbal medicines.
Ambu Sdn Bhd, a manufacturer of medical devices in the cardiology and neurology segments is an example that reflects development in the Malaysian devices market. Despite being a small to medium sized company, Ambu has grown considerably since its inception 11 years ago.
The company is confident of future expansion as a result of the conducive investment environment prevailing and supporting services available for companies in the medical devices industry in the country.
By using all the favourable factors combined with strong support strategies from the government, Malaysia hopes to create more such commercially successful companies that will help it to be in the top league in life sciences in Asia in a few years.
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