Malaysia's Biotech Ambitions Move a Step Forward
(FEER)
06-Feb-2003
MALAYSIAN-BORN KIM TAN, one of Britain's leading biotech entrepreneurs, has been one of the loudest detractors of his home country's bid to build a biotech sector from scratch.
He's long maintained that Asia is way behind the biotech curve, and Malaysia more so than most countries. The country's domestic science community is virtually non-existent, he says, which will make it tough to compete with the United States and Europe for investment. Malaysia's neighbours, like Singapore, meanwhile have similar ambitions but more money with which to lure talent from abroad.
Then, last week Tan changed tack, announcing he will team up with a government investment arm and manage Malaysia's first biotech venture-capital fund.
Why the change of heart? "Nationalism," says Tan. "I could make far more money and it's easier over there [in Britain]. The main reason: I'm a Malaysian. One has a responsibility to [his] country."
Tan's decision to play the role of founding father for Malaysia's planned life-sciences sector is a coup for the country's government, which wants to create a biotech hub, called Biovalley, near Kuala Lumpur. The government has said Biovalley will include three nationally-funded research institutes and tax incentives to lure foreign companies. More details on the hub will be announced later this year.
As manager of the fund, Tan will provide key expertise and commercial know-how to the Biovalley initiative, says Mohammed Sheriff Mohammed Kassim, managing director of Khazanah Nasional, the government agency involved in the fund. Tan has three listed biotech companies: London-listed KS Biomedix, which is developing cancer-fighting antibodies; TranXenoGen, which is using genetic engineering in chickens to make them produce eggs containing therapeutic proteins which can then be extracted for use in drugs; and Genemedix, listed both in London and Singapore, which makes generic drugs.
"Kim Tan has already made a mark internationally. He's Malaysian, and I think the government thinks that he's a natural choice to help start this off," says Chin Yoong Kheong, the managing partner of KPMG Malaysia's business consultancy and a biotech-sector specialist. "There's a lot more work to be done, but getting Tan here is a good start."
Malaysia faces stiff competition from countries in the region who share its biotech ambitions. Singapore plans to invest over $3 billion in the life-sciences sector over the next five years, and has succeeded in luring top scientists from overseas to both private and public research facilities. According to the city-state's Economic Development Board, biomedical-science manufacturing output rose by 3.2% to $3.8 billion last year. Australia, Japan and China, meanwhile, have also introduced legislation and funding to spur their own industries.
UPHILL CLIMB
Tan still maintains that the region, Malaysia included, faces an uphill climb. "The scientific base is young, embryonic almost, compared to the West. We have very little in terms of intellectual property. There's been very few patents filed, particularly from Asean countries," he says. "If we were a classical venture-capital fund looking for opportunities to invest in Asia, and in Malaysia in particular, we'd find those opportunities are very little."
He says Malaysia did not woo him. "I took it to them. I've been waiting to see what the government was going to do [about building the sector]. They are committed," he says. "So I decided, right, let's do something."
The result is SpringHill Biotech Ventures, which will manage a $30 million venture-capital fund backed by Khazanah Nasional, the Malaysian unit of Singapore's life insurer Great Eastern Holdings, insurance firm Pacificmas and palm-oil conglomerate TH Group. SpringHill will license new technologies developed abroad that are almost ready to hit the market and can be used, in turn, as a platform for further research in Malaysia. It will also invest in start-ups in the United States and Europe, and set up joint ventures with research and manufacturing companies that agree to operate in Malaysia.
Nationalism may be a driver, but there are potential benefits, too. Tan's listed companies passed over Malaysia in the past in favour of Canada and China as facility sites because the incentives were better. If Malaysia becomes more competitive, he says, he would ask the boards of those companies to consider putting future plants here.
Copyright © 2003 www.Feer.com
<<< back to news |
