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INVESTMENT

OPPORTUNITIES
IN KOREA

BIOPHARMACEUTICAL

R1
CH
HO

R2

OH

INVESTMENT
OPPORTUNITIES
IN KOREA

BIOPHARMACEUTICAL

KOREA,
Where Success Knows No Limits

Contents
04

Industry overview

The pharmaceutical industry

Biotech industry

10

Competitive standing and outlook

Global market outlook

Future development of pharmaceutical and biotech industries

18

Government policies and related regulations

Government policies by industry

22

Cost

24

Success cases

28

Related companies and associations

05

01 INDUSTRY OVERVIEW

INDUSTRY
OVERVIEW

The pharmaceutical
industry

Koreas pharmaceutical market stood at KRW 19.291 trillion (USD 17.3 billion)* in 2013, up 0.3%
YoY, and posted a five-year CAGR of 2.3% from 2008 to 2013. Given that the market recorded
a higher growth rate than the global market until 2010, its growth pace has slowed. However,
Koreas pharmaceutical market continues on a steady growth path despite the global economic
crisis.
In particular, it is notable that Koreas pharmaceutical production increased by 4.1% YoY,
to KRW 16.2 trillion, in 2013, departing from a stagnant growth trend since 2010. Koreas
pharmaceutical exports posted a 2008 - 2013 CAGR of 13% driven by Korean pharmaceutical
companies with a growing presence in the global market.
In contrast, Koreas pharmaceutical imports dropped 10% YoY, to KRW 5.2 trillion in 2013,
contributing to a sharp decline in trade deficits.
In a nut shell, Koreas pharmaceutical industry records modest growth across the board. As
Korean pharmaceutical companies have steadily sharpened their competitiveness, the Korean
industry has increased exports and production volumes and fast reduced trade deficits.
Koreas pharmaceutical industry employed 78,259 individuals in 2013, up 5.1% YoY, or 3,782
individuals. This marks an upturn in pharmaceutical employment, breaking from a downward
trend since 2010, and indicates that business activities have recently gained momentum in
Koreas pharmaceutical industry.
Recent developments in Koreas pharmaceutical industry

Production

(Unit: KRW million)

2008

2009

2010

2011

2012

2013

% YoY

A 5-year
CAGR

13,893,810

14,788,387

15,569,588

15,440,251

15,560,663

16,191,845

4.1%

3.1%

Export

1,255,891

1,772,242

1,770,059

1,943,493

2,309,534

2,318,522

0.4%

13.0%

Import

4,319,756

4,953,881

5,108,911

5,447,053

5,728,874

5,155,829

-10.0%

3.6%

Trade
balance

-3,063,865

-3,181,639

-3,338,852

-3,503,560

-3,419,340

-2,837,308

-17.0%

-1.5%

Market size

16,957,675

17,970,026

18,908,439

18,943,812

18,980,003

19,029,152

0.3%

2.3%

* Source: Korea Health Industry Development Institute (2014), Analysis of Koreas Pharmaceutical Industry (2013)

* Currency conversion based on March 10, 2015 rate.

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BIOPHARMACEUTICAL

Pharmaceutical researchers numbered 5,437, accounting for 6.9% of the total workforce in
Koreas pharmaceutical industry. As much as 70.2% of researchers have masters or doctoral
degrees and the research workforce structure was based mostly on higher-skilled talent.
Number of people employed in Koreas pharmaceutical industry
82,000

07

01 INDUSTRY OVERVIEW

Biotech
industry

The biotech industry uses biotechnologies based on DNA, protein and cells to produce various
products, such as biopharmaceuticals, and to create value-added services. The industry includes
biopharmaceuticals, bioengineered food, biochemicals and bio-environment, bioelectronics,
bio-process and device, bio-energy resources, others such as biological assay (assessment) and
bioinformatics services.
Koreas biotech industry stood at KRW 7.52 trillion in 2013, up 5.3% YoY, in terms of domestic
sales and exports, and posted a high CAGR of 8.9% from 2009 to 2013.

81,204

80,000
78,259
78,000
76,000

In terms of production value, the bioengineered food segment is the largest contributor, with
annual production of KRW 3.21 trillion in 2013, accounting for 40% of the biotech industry. The
second-largest contributor is biopharmaceuticals, with annual production of KRW 2.78 trillion.
Biochemicals and other biotech segments are small in terms of absolute production value but
expand at a fast pace, raising expectations that they will represent an increasing share of the
biotech industrys production.

77,314
75,406
74,477

74,000
72,000
70,000

2008

2009

2010

2011

2012

Korean biotech industry production (domestic sales + exports)

* Source: Korea Health Industry Development Institute (2014), Analysis of Koreas Pharmaceutical Industry (2013)

Year

Research workforce breakdown by educational background

(Unit: People)

2009
2010

Others
107

2011
Ph.D. holders
637
B.S. degree
holders
1,509

2012
2013

% YoY
M.S. degree
holders
3,184

* Source: Korea Health Industry Development Institute (2014), Analysis of Koreas Pharmaceutical Industry (2013)

Production

(Unit: KRW million)

Total

Biopharmaceuticals

Biochemicals

Bioengineered food

Other

Domestic sales

2,907,448

1,564,251

260,356

283,954

601,718

Export

2,728,749

1,209,223

69,907

722,474

371,403

Domestic sales

3,346,287

1,521,210

230,073

989,797

605,207

Export

2,441,539

852,028

60,352

1,356,334

172,825

Domestic sales

3,646,896

1,506,329

355,684

1,065,834

719,049

Export

2,749,356

954,412

74,783

1,531,965

188,195

Domestic sales

4,068,644

1,577,572

408,226

1,261,325

821,521

Export

3,060,585

1,139,980

97,173

1,610,631

212,802

Domestic sales

4,357,396

1,636,942

451,091

1,338,933

930,430

Export

3,166,435

1,138,462

111,110

1,682,131

234,731

Domestic sales

7.10%

3.76%

10.50%

6.15%

13.26%

Export

3.46%

-0.13%

14.34%

4.44%

10.30%

10.64%

1.14%

14.73%

47.36%

11.51%

3.79%

-1.50%

12.28%

23.53%

-10.84%

Domestic sales
CAGR
(2009 - 2013) Export

* Source: Korea Statistical Information Service (www.kosis.kr)

The domestic biotech market stood at KRW 5.87 trillion in 2013, up 6.1% YoY, posting a CAGR of
8.5% from 2009 to 2013.
By segment, the biochemicals segment posted the fastest growth, at 8.5% YoY. Of other
biotech segments, the bioelectronics and bio-environment segments recorded a high growth
rate of 53.8% YoY and 9.6% YoY, respectively, although their domestic sales were relatively low,
at KRW 37.3 billion and KRW 30.3 billion.

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BIOPHARMACEUTICAL

09

01 INDUSTRY OVERVIEW

In terms of domestic sales, biopharmaceuticals are the largest segment, accounting for 50%
of the biotech market. However, biopharmaceuticals record a slower growth rate than other
segments, while bioengineered food and biochemicals marked higher growth rates. The biotech
market is expected to grow beyond biopharmaceuticals to include diverse segments such as
biochemical, bioengineered food and other biotech segments.

Changes in number of biotech companies


1,000
900

913

958 971

2011

2012

2013

800
700
600

Size of Koreas biotech market (domestic sales + import)


2009

2010

2011

2012

(Unit: KRW million)

2013

500

CGAR
% YoY
(2009 - 2013)

400

Total

4,236,695

4,751,946

5,208,078

5,643,437

5,866,853

3.96%

8.48%

300

Biopharmaceuticals

2,536,348

2,620,986

2,736,657

2,819,494

2,961,578

5.04%

3.95%

200

Biochemicals

372,034

324,505

435,402

476,952

515,177

8.01%

8.48%

100

Bioengineered food

317,692

999,180

1,098,907

1,320,973

1,385,571

4.89%

44.51%

Other

813,452

807,273

937,112

1,026,018

1,004,527

-2.09%

5.42%

* Source: Korea Statistical Information Service (www.kosis.kr)

The number of companies in Koreas biotech industry increased by 13, from 958 in 2011 to 971 in
2012, marking an upward trend.
By segment, the number of biotech companies increased in the biopharmaceuticals,
biochemicals and other segments but slightly declined in the bioengineered food segment.

276

188

Total

The number of researchers amounted to 11,605 individuals, or 30.4% of the employees in Koreas
biotech industry. About 60% of researchers have masters or doctoral degrees. The workforce is
highly skilled in the biotech industry, as seen in the pharmaceutical industry.

Biopharmaceuticals

204 203

Biochemicals

247 250 252

202 199 199

Bioengineered food

Other

* Source: Biotech Industry Study (2014)

Workforce structure of Koreas biotech industry


Segment
Biopharmaceuticals

In 2013, the number of people employed by biotech companies stood at 38,197, marking an
increase of 627 individuals from 2012. In other words, the average number of employees per
biotech firm stood at 39.3.

305 317

Biochemicals
Bioengineered food
Other
Total
* Source: Biotech Industry Study (2014)

People

Doctoral degree

Masters degree Bachelors degree

Other

Share (%)

People

People

People

People

18,469

1,030

3,519

6,877

7,043

100%

6%

19%

37%

38%

4,936

362

1,355

1,937

1,282

100%

7%

27%

39%

26%

8,070

345

1,298

3,527

2,900

100%

4%

16%

44%

36%

6,722

359

1,239

3,079

2,045

100%

5.34%

18.43%

45.80%

30.42%

38,197

2,096

7,411

15,420

1,285

100%

5.49%

19.40%

40.37%

3.36%

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BIOPHARMACEUTICAL

02 COMPETITIVE STANDING AND OUTLOOK

Global market
outlook

11

The global pharmaceutical and biotech markets have steadily expanded thanks to an aging
population and growing awareness of healthy lifestyles worldwide.
The global pharmaceutical industry expanded 2.4% YoY, to USD 959 billion in 2012, and posted
a high CAGR of 5.3% from 2007 to 2012. The growth rates are relatively low compared to the
pre-crisis growth rate of about 8%. However, the global pharmaceutical industry has continued
on a steady growth path despite a global economic slowdown, as national healthcare spending
and demand for healthcare have increased amid aging populations in Asia.
The global biotech market amounted to USD 1.18 trillion in 2012. This global industry is one of the
most promising and expected to reach USD 1.57 trillion in 2015, with a 2010 - 2015 CAGR of 9.7%.
Size and growth outlook of the global biotech market
Year

Value (USD billion)

Growth rate (%)


% YoY

CAGR

2010

987.2

9.1%

9.7%

2011

1,079.0

9.3%

9.7%

2012

1,181.5

9.5%

9.7%

2013

1,298.4

9.9%

9.7%

2014

1,434.7

10.5%

9.7%

2015

1,572.4

9.6%

9.7%

* Source: IMS Health (2012)

COMPETITIVE
STANDING
AND OUTLOOK

Future
development
of pharmaceutical and
biotech
industries

The future development of the pharmaceutical and biotech industries is expected to be led by
technology convergence-driven new industries, such as BIT.
The ubiquitous healthcare industry has emerged thanks to IT-related innovative technologies,
creating new medical device markets such as portable diagnostic devices for remote health
monitoring, remote consultation and remote treatment. The personalized healthcare market is
estimated to reach USD 63.9 billion in 2015, from USD 33.7 billion in 2010.
Thanks to dramatic technological developments in DNA analysis, key product categories will
include chips and diagnosis kits based on DNA sequencing and protein analysis.
The preventive medicine segment, such as the introduction of biosensors and biomarkers, is
expected to develop thanks to growing demand for products that enable fast diagnosis and
early detection, for disease prevention. The development of personalized target therapy and
companion biomarkers (companion diagnostics) are expected to emerge as a new business
model for the pharmaceutical industry.

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BIOPHARMACEUTICAL

The industry shift from one-size-fits-all products to personalized treatment products should be
accelerated.
M edicinal treatment and management will take into consideration personal genetic
information and physical traits, departing from the practice of applying the same treatment
to all patients. In this regard, development of the single-nucleotide mutation search, precision
diagnosis and monitoring segments will enable drug response prediction and help establish a
system to fend off trial and error and side effects in advance.

Diagnosis of Koreas competitiveness


Korea accounts for 1.8% of the global pharmaceutical market and 1.7% of the biotech market
in terms of sales revenue. Koreas biotech and pharmaceutical markets are small in absolute
terms but have overtaken the global market in terms of growth rates. For example, Koreas
bioengineered food segment has posted a five-year CAGR of more than 50%, and the domestic
sales and exports of biotech products, such as bio-chemicals and biopharmaceuticals, recorded a
CAGR of 20 - 30%. Given the brisk pace of market growth and active business, Korea is expected
to enhance its competitiveness in the global market.
Koreas biotech industry is expected to maintain strong growth momentum and record KRW
20 trillion in production and KRW 13 trillion in domestic sales in 2017.
The fast growth of the biotech industry is attributed to socio-demographic and demand and
supply-side factors, among others. On the socio-demographic side, the biopharmaceuticals
and bio diagnostic device segments have been expanding quickly thanks to growing demand
for health checkups, disease prevention and geriatric treatment amid an aging population and
longer life expectancy.
On the demand side, the biopharmaceuticals, bio-cosmetics and bioengineered food
segments have been rapidly growing due to an increase in disposable income and standard of
living and a greater desire for a healthy, younger life.
On the supply side, as national spending on social welfare and public health has increased
due to an aging population, it is increasingly important to meet social demand in a more costeffective way. As such, the biotech industry has been a target of active national investments
and efforts to develop technology. Developing further on scientific achievements, the biotech
industry has been leading national and industrial efforts to generate new growth momentum
for industrial development.

02 COMPETITIVE STANDING AND OUTLOOK

13

Competitiveness of the pharmaceutical industry


Korean pharmaceutical companies have mostly developed generic drugs. However, the
development of new drugs is more important than ever to meet changes in the pharmaceutical
environment. As such, industry players, especially major pharmaceutical companies, have
strengthened their commitment to investing in new drug development.
The need to develop new drugs is gaining momentum due to government policies and
changes in the domestic and foreign pharmaceutical market. Therefore, the commitment and
investment of major pharmaceutical companies in new drug development are becoming
more important.
K orean pharmaceutical companies have delivered achievements in biosimiliar and
incrementally modified drugs (IMD), capitalizing on their knowhow and research expertise,
and made significant efforts to develop first-in-class drugs. As a result, Korean companies
have exported technologies to multinational companies and conducted global clinical trials,
earning recognition for their technological prowess. For example, Hanwha Chemical exported
its biosimilar version of Pfizers blockbuster rheumatoid arthritis drug Enbrel, and Hanmi
Pharmaceutical has licensed out its Poziotinib, a targeted anti-cancer treatment.
Korean pharmaceutical companies made research and development (R&D) investments worth
KRW 967.2 billion in 2012. The R&D investment posted a high CAGR of 13.7% over the past five
years, reflecting a growing commitment to R&D.
In addition, the average concentration ratio of the pharmaceutical industry increased from
6.24 in 2008 to 7.67 in 2012 in the R&D segment. Such an increase in R&D activities, which are
essential to the development of the pharmaceutical industry, raises expectations that Korea
will be able to enhance its competitiveness.
Korean pharmaceutical companies have actively sought partnerships with global pharmaceutical
companies. For example, Hanwha Chemical concluded an agreement with Merck to produce and
globally market the biosimilar of arthritis blockbuster Enbrel. Samsung BioLogics established a
biosimilar joint venture with the U.S.-based Biogen Idec, enhancing comprehensive partnerships
in areas such as R&D, manufacturing and marketing. As such, cooperation with multinational
pharmaceuticals is expected to generate strong synergy effects.

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BIOPHARMACEUTICAL

15

02 COMPETITIVE STANDING AND OUTLOOK

Koreas new drug development


Company

New drug

Development stage

Celltrion

Remsima (anti-rheumatic drugs )

Worlds first biosimilar antibody (approved in


July 2012 in Korea, June 2013 in EU)

Celltrion

Biosimilar Herceptin (breast cancer treatment)

Phase III clinical trial (completed in Asia in


November 2010)

Dong-A ST

Tedizolid phosphate (super bacteria antibiotics)

FDA approval (April 2014)

LG Life Sciences

Zemiglo (anti-diabetic drug)

Phase III clinical trials and sales right agreement


(June 2012)

Chong Kun Dang


Pharmaceutical

CKD-732 (anti-obesity drug)

Phase III clinical trials underway (October 2014)

Pharmicell

Hearticellgram (myocardial infarction treatment)

Worlds first stem cell treatment (July 2011)

Medipost

CARTISTEM (knee cartilage regeneration treatment) KFDA approval (January 2012)

Antrogen

Cupistem injection (Crohn's disease treatment)

KFDA approval (January 2012)

Core Stem

HYNR-CS injection (ALS treatment)

KFDA approval (July 2014)

The therapeutic antibodies segment is among the most promising in the pharmaceutical
industry. Koreas therapeutic antibodies market increased from KRW 30 billion in 2006 to KRW 83
billion in 2010. If the domestic development of new therapeutic antibodies speeds up, Koreas
therapeutic antibodies segment will reach KRW 300 billion in 2015.
ISU ABXIS recorded KRW 3.3 billion in sales with Clotinab, Koreas first antibody-based
treatment. Celltrion has actively conducted R&D in therapeutic antibodies, winning approvals
for its infliximab biosimilar Remsima and completing the phase III clinical trial of the biosimilar
Herceptine (breast cancer treatment).
Outlook for the Korean therapeutic antibodies market

(Unit: KRW 100 million)

3,000

3,000
Market size

2,500

R&D investments by Korean pharmaceutical companies

(Unit: KRW million)

R&D investments

800,000
648,362
600,000

1,500

967,239

1,000,000

2,000

1,000

813,755

684,207

500

578,268

830
300

400,000

* Source: Ministry of Trade, Industry & Energy, Five-year Plan for Technology Innovation (2013)

200,000
0

2008

2009

2010

2011

Competitiveness of the biotech industry

2012

* Source: Korea Health Industry Statistics System (KHISS)

R&D concentration among Korean pharmaceutical companies

(Unit: %)

Given that Korea is one of the countries with the most rapidly aging population, the outlook
for demand in the biotech industry is positive. In addition, the biotech industry is expected
to continue on a growth path driven by government support and the commitment of large
corporations to new business development.

9,00
R&D concentration rate

8,00
7,00
6,00
5,00

6.24

6.50

6.44

2008

2009

2010

7.41

7.67

2011

2012

4,00
3,00
2,00
1,00
0,00

* Source: Korea Health Industry Statistics System (KHISS)

Accordingly, Korean companies increase their R&D investments to secure their competitiveness
in the biotech industry. Koreas biotech R&D investments reached KRW 1.165 trillion in 2013,
continuing on a growth path.
Korea ranks fifth among OECD member countries, following the United States, France, Japan
and Germany in terms of the private sectors investments in the biotech segment. In addition,
the biotech segment accounts for 20% of the Korean governments investments, the second
largest among OECD member countries, following Germany.
Statistics show that the Korean government has played a key role in establishing the scientific
foundation for biotech research. The public sectors efforts have facilitated the private sectors
investments and put the biotech industry on the path to growth and development.

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02 COMPETITIVE STANDING AND OUTLOOK

Koreas biotech R&D investments

(Unit: KRW 100 million)

10,000
8,000

9,302

R&D investments

8,761

9,988

7,686

7,293

6,000
4,000
2,000
0

2008

2009

2010

2011

2012

* Source: Biotech Industry Study (2014)

By segment, major market players in the biotech industry are as follows.


Segment

Major companies

Biopharmaceuticals

Celltrion, Isu Abxis, Meditox, RNL Bio, JW-Shinyak, etc.

Biochemicals

CJ CheilJedang, Daesang, SK, LG Chem, GS Caltex, Cheil Industries, etc.

Bioengineered food

Daesang , CJ CheilJedang, Dongbu Farm Hannong, MOGHU Research Center, etc.

Bioelectronics and analytic device

Humasis, Bio Focus, Nano Entek, K-MAC, Seegene, Bioneer

Other

AmorePacific, LG Household & HealthCare, Hankook Cosmetics, Pharmicell, Medipost, etc.

The in vitro diagnostic segment is expected to be among the fast-growing markets of the biotech
industry. The segment has strong growth potential thanks to new technology development and
a rapidly aging population. The market is estimated to reach KRW 420 billion in 2014.
Koreas in vitro diagnostic medical device (IVDs) market
2009
Bioelectronics
Bioinformatics & biological assay
Bio diagnostics
(20% of the diagnostic test market)
Total

2010

(KRW 100 million)

2011

2012

2013

2014

369

489

553

624

724

840

1,406

1,355

1,531

1,730

1,955

2,209

600

690

780

881

996

1,125

2,375

2,534

2,864

3,235

3,675

4,174

* Source: Ministry of Trade, Industry & Energy, Five-year Plan for Technology Innovation (2013)

In particular, the bio-convergence segment has strong growth potential thanks to Koreas

technological capabilities in the semiconductor and IT segments, and Korean electronics


companies are showing growing interest in the bio-convergence segment.
- This segment includes biochips, biosensors, u-healthcare and diagnostic devices. In particular, the biochip and
biosensor markets have demonstrated significant growth potential and delivered strong performance.

17

In this regard, the development of bio chips has been led by public research institutes and

universities such as the Korea Institute of Science & Technology (KIST), Electronics and
Telecommunications Research Institute (ETRI), Korea Electronics Technology Institute (KETI),
Korea Advanced Institute of Science and Technology (KAIST), Pohang University of Science and
Technology (POSTECH), Seoul National University (SNU) and private research institutes and
large corporations such as Samsung Advanced Institute of Technology (SAIT), LG Electronics
Tech Center and LG Chem. Recently, an increasing number of biotech startups have been
entering the market.
Of Koreas IVD market, companies such as HBI, SD, Humasis, Bio Focus, Nano EnTek and K-MAC
are new entrants in the immune segment, and companies such as Seegene and Bioneer have
DNA diagnosis products and globally competitive technologies in the molecular diagnosis
segment.
In addition, as the focus of healthcare has shifted from treatment to disease prevention due to
an aging population, the personalized healthcare market is expected to fast expand, enabling
routine and customized health care through early diagnosis, a ubiquitous healthcare system
and personal health records.

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GOVERNMENT
POLICIES AND
RELATED
REGULATIONS

03 GOVERNMENT POLICIES AND RELATED REGULATIONS

Government
policies by
industry

19

Koreas pharmaceutical industry


The Korean government announced in July of 2013 the Five-year Comprehensive Plan for
the Support and Development of the Pharmaceutical Industry in an effort to promote the
pharmaceutical industry. In a fast-changing pharmaceutical industry, the Korean government
has launched a five-year initiative to encourage Korean pharmaceutical companies to go global
through the development of new drugs and products, departing from growth strategies focused
on generic drugs and the domestic market.
The five-year plan envisions that Korea will join the top 10 in the global pharmaceutical
industry by recording pharmaceutical exports worth KRW 11 trillion and creating four worldclass new drugs by 2017 through five core tasks, 13 key strategies and 41 action plans.
In September of 2013, the Ministry of Health and Welfare launched a fund worth KRW 100 billion
specializing in the pharmaceutical industry to promote high-risk investments by pharmaceutical
companies. The specialized fund is financed by the Ministry of Health and Welfare, Korea Finance
Corporation, Korea Development Bank and Korea Securities Finance Corporation. Its objective
is to support Korean pharmaceutical companies in their technology partnerships and overseas
expansion and to invest in small- to mid-size tech startups with weak financing capacity. The
first global pharmaceutical fund started investments in promising Korean pharmaceutical
companies such as Genexine, Crystal Genomics, DiNonAand CorenTec in 2014, providing growth
momentum for Koreas pharmaceutical industry.
The Korean government has pursued the PB 300 Project, which provides Korean companies
with consulting and advisory services, by recruiting leading experts from overseas as shortterm consultants. The objective of the PB 300 Project is to ensure that the government can
help Korean companies tackle challenges and enhance their capability by providing consulting
services with a talent pool of overseas experts in new drug R&D, planning, clinical trials,
manufacturing, approval and technology marketing. With the help of the PB 300 Project, Korean
companies that have technologies but lack clinical trial experience overseas will be able to
expand to global markets and emerge as globally competitive players by acquiring advanced
technologies and know-how, enhancing their competence in developing and marketing their
technologies and products.

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03 GOVERNMENT POLICIES AND RELATED REGULATIONS

To increase awareness of Koreas pharmaceutical products in the global market, the Korean
government has assisted Korean companies in their expansion to new emerging markets,
enhancing government-to-government collaboration and sending private-public market
development delegations. During Bio Korea 2013 (September 11-13, 2013), Pharm Fair was held
on the sidelines to bring together related foreign authorities in the drug approval segment and
promote marketing cooperation with overseas drug distribution companies. Pharm Fair created
an opportunity for Korean pharmaceutical companies to generate businesses worth KRW 170
billion, including the USD 100 million export deal between BC World Pharm and KOA SHOJI
(Japan). Such policy efforts should help Korean companies look beyond the domestic market,
reach out to the rest of the world and become globally competitive players.
The Korean government introduced a pilot procedure combining drug approval and price
evaluation from October to December of 2013, to shorten the time-to-market for new drugs
and the evaluation period of drug list prices and thus establish an efficient infrastructure for new
drug development.

The biotech industry


The government has designated the healthcare industry as one of the pillars of and core tasks
for Koreas transition toward a creative economy. It has made nation-wide efforts to increase
investments, raise private funds, develop a talent pool and enhance infrastructure efficiency.
For this goal, the government has set out key initiatives to develop Korea as one of the top
ten players in the global pharmaceutical industry and enhance strategic healthcare R&D by
increasing R&D competence in personalized healthcare, stem cell & rehabilitation medicine,
new drugs & medical devices and conversion between Western and traditional medicines.
In addition, according to the 2nd Basic Development Plan for Bioengineering (2012), the Korean
government will increase biotech investments to KRW 9.7 trillion through 2016 and is developing
a research talent pool of 73,222 masters or doctoral degree holders.
Government R&D investments in the biotech segment

(Unit: KRW 100 million)

2009

2010

2011

CAGR

123,437

137,014

148,902

9.8%

Biotech R&D

20,112

23,252

25,808

13.3%

Biotech R&D as % of government R&D

16.3%

17.0%

17.3%

Government R&D

21

The Korean government announced in July of 2013 the Government-wide Mid- to Long-term
Action Plans to Promote R&D for National Healthcare, integrating policy plans established
by ministries responsible for the biotech and healthcare industries. Moreover, the Korean
government seeks to increase public investments and ease investment restrictions in an effort to
promote private investments.
As part of a private-public initiative to promote the biochemicals sector, a total of KRW 250
billion will be invested for a five-year period from 2013. The Korean government is also making
efforts to establish a full-cycle R&D system through collaboration with related companies and to
overhaul the system, which requires that public organizations prioritize the purchase of certain
products upon procurement. As such, various mid- to long-term initiatives are underway to
ensure Korea will be among the top five in the global biochemicals market by 2020.
The Ministry of Trade, Industry & Energy has launched a five-year biochemicals technology
development project worth KRW 215.5 billion in 2014 with the goal of accelerating the
development of technology and production infrastructure.

22

COST

BIOPHARMACEUTICAL

23

04 COST

The average annual salary at Korean pharmaceutical companies is USD 27,681, with the top 25%
at USD 42,987 and the bottom 25% at USD 15,903. The starting salary at major companies tends
to be higher at multinational companies than Korean companies and is distributed as follows.
Starting salary at major pharmaceutical companies

(Unit: USD)

Company

Starting salary (USD)

GlaxoSmithKline

33,393

Korea Polyol

32,491

AstraZeneca Korea

31,769

Pfizer Korea

31,588

ISU Chemical

30,505

Dong-A Pharm

29,874

Yuhan Corporation

27,076

Dongwoo Fine-Chem

24,368

Average annual income is distributed as follows by academic background.


Average annual income by academic background
39,025

40,000

Average salary

35,000

32,139
28,384

30,000
25,000

(Unit: USD)

22,572

20,000
15,000
10,000
5,000
0

Associate degree holder

Bachelors degree holders

Masters degree holders

Ph.D. holders

24

BIOPHARMACEUTICAL

05 SUCCESS CASES

SUCCESS CASES

25

1) Celltrion: KRW 350 billion in investments from Temasek, Singapores sovereign wealth fund,
since 2010
Celltrion attracted KRW 207.9 billion in investments from Temasek, Singapores sovereign wealth
fund, in 2010 thanks to its superb biosimilar technologies and solid contract manufacturing
organization (CMO) business. Temasek acquired a 10% stake in Celltrion Healthcare, Celltrions
affiliate, and made an additional investment of about KRW 150 billion in 2013.
Investment incentives and outcomes
Celltrion has expanded the global market coverage of Remsima, a biosimilar version of
Remicade (rheumatoid arthritis drug), winning regulatory approvals in Korea and Europe. With
the completion of a phase 3 clinical trial of the biosimilar Herceptine (breast cancer treatment),
the company has made significant achievements in the biosimilar segment.
It was biosimilar capability that enabled Celltrion to attract foreign investments. Foreign
investments helped Celltrion repay its debts, raise operating capital, enhance its presence in
the global capital market and place a greater focus on developing biosimilar and therapeutic
antibody technologies.
2) Aprogen: Strategic partnership with Japans Nichi-Iko Pharmaceutical (2010) and exclusive
sales right worth KRW 30 billion (2014)
Aprogen, a tech venture in the Daeduk Specialized Zone, attracted an investment of KRW
13.3 billion in the biosimilar business from Japans Nichi-Iko Pharmaceutical in 2010. Nichi-Iko
Pharmaceutical acquired a 33.4% stake in Aprogen and entered into an agreement to conduct
clinical trials, file for regulatory approval and sell Aprogens biosimilars in Japan. Afterwards,
Aprogen developed the Remicade biosimilar and entered into an exclusive supply contract
with Nichi-Iko Pharmaceutical for KRW 30 billion in 2014.
Investment incentives and outcomes
Aprogen is a subsidiary of Schnell Biopharmaceuticals and the first company in Korea to have
promoted the development of new drugs based on protein and antibodies. Aprogen was
established in 2000 by two professors from the Korea Research Institute of Bioscience and
Biotechnology (KRIBB) and KAIST and has transferred four biosimilar drug technologies to
other companies. Currently, the company is developing four kinds of biosimilars and three
kinds of protein-based new drugs. In addition, the company transferred its business right to
biosimilars of Ramicade (rheumatoid arthritis treatment) and Rituxan (anti-cancer drug) to
Schnell Biopharmaceuticals.
Aprogen attracted equity investments from Japans Nichi-Iko Pharmaceutical in 2010 to finance
its biosimilar production and facilitate its advancement in the global market. The agreement
in 2014 includes an investment clause that Nichi-Iko Pharmaceutical will provide capital for
Aprogen to build large-scale biosimilar production facilities. As such, Aprogen has secured
financing for its production facilities and an exclusive right to supply products.

26

BIOPHARMACEUTICAL

3) Samsung BioLogics: Joint venture between Samsung and Quintiles Transnational Corp.
Samsung BioLogics has created a USD 300 million biosimilar development JV with Biogen Idec.
Samsung and Quintiles Transnational Corp, a U.S.-based global clinical research service
provider, established Samsung BioLogics, a joint venture with KRW 300 billion in capital.
BioLogics teamed up with Biogen Idec to establish a joint venture that develops, manufactures
and sells biosimilars. Samsung BioLogics started construction of a biopharmaceutical plant
with a cell culture capacity of 30,000 liters in June of 2011, with plans to complete the pilot
production of therapeutic antibodies in August of 2014 and start mass production in 2015.
Investment incentives and outcomes
Samsung BioLogics has secured access to the global biotech industry by attracting foreign
investment. In addition, Samsung BioLogics is well-positioned to sharpen its competitiveness
in the biopharmaceutical segment, as it can share knowhow with a global company in
various areas such as contract manufacturing and preclinical and clinical trials. In addition,
the establishment of mass production facilities for biosimilars should allow the company to
expand biopharmaceuticals production, extend global market reach and accelerate R&D.
4) Dong-A Pharm: Strategic partnership with GSK
In May of 2010, Dong-A Pharm forged a strategic partnership with the global pharmaceutical
company Glaxo Smith Kline (GSK). GSK acquired a 9.9% stake in Dong-A Pharm to jointly
operate the sales, clinical trials and commercialization of ethical drugs. It is a comprehensive
partnership that enables Dong-A Pharm to secure a stable supply of GSKs key pipeline drugs
and GSK to use Dong-A Pharms sales networks and marketing force in Korea. GSK and Dong-A
Pharm expanded their partnerships in March of 2012 to include over-the-counter (OTC) drugs,
generating synergy effects both in the OTC and ethical drug markets.
Investment incentives and outcomes
The partnership between GSK and Dong-A Pharm is an unprecedented model of partnership
between a global pharmaceutical company and a Korean pharmaceutical company. In
particular, GSK has identified Korea as an attractive investment destination, given Koreas
R&D capacity and clinical trial experiences, and thus showed great interest in Dong-A Pharms
overseas R&D pipeline. Through partnerships, Dong-A Pharm has secured an opportunity to
learn global clinical expertise and successfully expand its global business.

05 SUCCESS CASES

27

5) Genexine: Ajinomoto Genexine, a joint venture with Ajinomoto


Genexine, a Korean biotech venture, formed a joint venture, Ajinomoto Genexine, with
Ajinomoto in November of 2012 to produce cell culture media for biopharmaceutical
production. Ajinomoto has a 75% equity stake in the joint venture, which has KRW 35.7 billion
in capital. With the complement of the cell culture media production facilities at the end of
May 2014 in Songdo, Incheon, Ajinomoto Genexine can domestically produce Ajinomotos
patent-protected serum-free medium, which used to be imported, and plans to expand its
market presence, especially in Korea and Asia.
6) Investment incentives and outcomes
Ajinomoto needed to establish a production base in Asia to meet growing demand for
biological research and biopharmaceutical production. As such, Ajinomoto formed a joint
venture with Genexine, a Korean biotech company with solid biopharmaceutical infrastructure
and promising R&D networks. The joint venture makes it easier for Korean biopharmaceutical
companies to domestically procure customized cell culture media, which offer higher quality
than imported products. In addition, Ajinomoto Genexine is a good example of where a
competitive Korean biotech company has attracted foreign investment with its technological
prowess. It will pave the way for competitive biotech companies to further enhance their
technological competence and develop financing and marketing capacity by attracting
foreign investment and forging partnerships.

28

BIOPHARMACEUTICAL

06 RELATED COMPANIES AND ASSOCIATIONS

Related associations

RELATED
COMPANIES AND
ASSOCIATIONS

Name

Website

Korea Biodiesel Association

blog.naver.com/kbda0711

Korea New & Renewable Energy Association

www.knrea.or.kr

Korea Pellet Fuel Association

cafe.naver.com/ilovepellet

Korea Bioplastics Association

www.kbpa.net

Korea Bio Material Packaging Association

www.biopack.or.kr

Korea Association of Geriatric Hospitals

www.kagh.co.kr

Korean Hospital Association

www.kha.or.kr

Korea Pharmaceutical Association

www.kpanet.or.kr

Korea Medical DevicesSellingAssociation

www.komedia.or.kr

Korea Medical Association

www.kma.org

Korea u-Health Association

www.uha.or.kr

Korea Association of Health Promotion

www.kahp.or.kr

KoreaInternational MedicalAssociation

www.koreahealthtour.co.kr

Korea Global Healthcare Association

www.kgha.kr

Korea Biopharmaceuticals Association

www.ko-bia.or.kr

Korea Biotechnology Industry Organization

www.koreabio.org

Korea Research Institute of Bioscience & Biotechnology

www.kbra.or.kr

Korea Biosafety Association

www.kobsa.net

Korea Drug Research Association

www.kdra.or.kr

Korea Medical Devices Industrial Coop

www.medinet.or.kr

Korea Medical Devices Industry Association

www.kmdia.or.kr

Korea Pharmaceutical Distribution Association

www.kapw.or.kr

Korea Pharmaceutical Traders Association

www.kpta.or.kr

Korea Pharmaceutical ManufacturersAssociation

www.kpma.or.kr

Korea Food Industry Association

www.kfia.or.kr

Korea Crop Protection Association

www.koreacpa.org

Korea Seed Association

www.kosaseed.or.kr

Korea AnimalHealth Product Association

www.kahpa.or.kr

Korean Veterinary Medical Association

www.kvma.or.kr

Korea Advanced Farmers Federation

www.kaff.or.kr

Korea Animal Improvement Association

www.aiak.or.kr

29

30

BIOPHARMACEUTICAL

06 RELATED COMPANIES AND ASSOCIATIONS

Related companies

Company

Website

Seoul Pharma

www.seoulpharma.com

Suheung

www.suheung.com

Hutecs Pharmaceutical

www.hutecs.co.kr

SS Pharm

www.susungpharm.com

Ahn Gook Pharm

www.ahn-gook.com

RP Corp

www.rpskorea.com

PharmbioKorea

www.pharmbio.co.kr

SB Pharmaceutical

www.sbp.com

Company

Website

Gwangdong Pharmaceutical

www.ekdp.com

Kukje Pharm

www.kukjepharm.co.kr

Green Pharm

BC World Pharm

www.bcwp.co.kr

Kunwha Pharmaceutical

www.kunwha.com

GlaxoSmithKline

www.gskkorea.co.kr

Green Cross

www.greencross.com

Daelim Pharmaceutical

SK Chemicals

www.skchemicals.com

Daewoong Pharmaceutical

www.daewoong.co.kr

Estech Pharma

www.estechpharma.com

Daewon Pharm

www.daewonpharm.com

Dream Pharm

www.dreampharma.co.kr

JW-Shinyak

www.jw-shinyak.co.kr

Nensys

www.nensys.co.kr

Dai Han Pharm

www.daihan.com

LG Life Sciences

www.lgls.co.kr

Daehwa Pharmaceutical

www.dhpharm.co.kr

YD Diagnostics

www.yd-diagnostics.com

Dongkook Pharmaceutical

www.dkpharm.co.kr

Yungjin Pharmaceutical

www.yungjin.co.kr

Huniz

www.huniz.kr

Youyoung Pharmaceutical

www.yypharm.co.kr

Dong-A Pharm

www.donga.co.kr

Yuyu Pharma

www.yuyu.co.kr

Dong Wha Pharm

www.dong-wha.co.kr

UK Chemi Pharm

www.ukchemipharm.co.kr

Mundi Pharma

mundipharma.co.kr

Bioland

www.biolandkorea.com

Medica Korea

www.medicakorea.com

Yuhanmedica

www.yuhanmedica.co.kr

BiNex

www.bi-nex.com

Yuhan Corporation

www.yuhan.co.kr

Baxter

www.baxter.co.kr

Ildong Pharmaceutical

www.ildong.com

Bolak

www.bolak.co.kr

Ilsung Pharmaceutical

www.ilsung-ph.co.kr

Boryung Pharm

www.boryung.co.kr

ILYANG Pharmaceutical

www.ilyang.co.kr

Sewon Cellontech

www.sewoncellontech.com

Ilhwa

www.ilhwa.co.kr

B. Braun Korea

www.bbraun.co.kr

JRP

www.jrpharm.co.kr

Bukwang Pharm

www.bukwang.co.kr

Kyowa Hakko Kirin Korea

www.kyowa-kirin-korea.com

Samnam Pharm

www.samnam51.com

Jeil Pharmaceutical

www.jeilpharm.co.kr

Samsung Fine Chemicals

www.sfc.samsung.co.kr

Choa Pharmaceutical

www.choa.co.kr

Sama Pharm

www.samapharm.co.kr

Chong Kun Dang Pharmaceutical

www.ckdpharm.com

Samyang Biopharmaceuticals

www.samyangpharm.co.kr

JW Pharmaceutical

www.cwp.co.kr

Sam Yang Chemical

www.samyangchem.com

Jinyang Pharm

www.jinyangpharm.com

Samil Pharm

www.samil-pharm.co.kr

Unimed Pharm

www.unimed.co.kr

Samjin Pharm

www.samjinpharm.co.kr

Chunggei Pharm

www.chunggei.co.kr

Sam Chun Dang Pharm

www.scd.co.kr

Chodang Pharm

www.chodang.com

Saehan Pharm

www.shpharm.co.kr

KMS Pharm

www.kmspharm.com

31

32

BIOPHARMACEUTICAL

06 RELATED COMPANIES AND ASSOCIATIONS

Company

Website

Company

Website

Kolon Pharm

www.kolonpharm.co.kr

Astellas Pharma Korea

www.astellas.com/kr

Pharmicell

www.pharmicell.com

Handok Pharm

www.handok.co.kr

Tai Guk Pharm

www.taiguk.co.kr

Hanmi Pharm

www.hanmi.co.kr

Pharma King

www.pharmaking.co.kr

Hanbul Pharm

www.hanbulpharm.co.kr

Taejoon Pharm

www.taejoon.co.kr

Celltrion

www.celltrionph.com

Pacific Pharm

www.pacificpharm.co.kr

Hanall Biopharma

www.hanall.co.kr

Richwood Pharmaceutical

www.richwood.net

Hanzhung Pharmaceutical

www.hzpharm.co.kr

Fresenius Kabi Korea

www.fresenius-kabi.co.kr

Hanpoong Pharm

www.hanpoong.co.kr

Hana Pharm

www.hanaph.co.kr

Han Wha Pharma

www.hwpharm.com

Hawon Pharm

www.hawonpharm.co.kr

CMIC CMO

cmic-cmo.co.kr

Nelson Korea

www.nelsonkorea.co.kr

Hyundai Pharm

www.hyundaipharm.co.kr

PMG Pharm

www.pmgpharm.co.kr

Whanin Pharm

www.whanin.com

Daiichi Sankyo Korea

www.daiichisankyo.co.kr

Huons

www.huons.co.kr

DPH Korea

www.dhpkorea.co.kr

CJ Health Care

www.cjp.co.kr

Korea Vaccine

www.koreavaccine.com

Isu Abxis

www.abxis.com

Modern Cell & Tissue Technologies

www.mctt.co.kr

GL Pharm Tech

www.glpt.co.kr

Han Kook Shin Yak

www.hsp.co.kr

MG

www.medi-green.co.kr

Genexine

www.genexine.com

YD Global Life Science

www.bioyd.co.kr

Korea Arlico Pharm

www.arlico.co.kr

Korea Global Pharm

www.globalpharm.co.kr

Alcone Korea

www.alconlabs.co.kr

Sungwon Adcock Pharm

www.swpharm.com

Newgenpharm

www.newgenpharm.com

Mcnulty Pharmaceutical

www.mcnultypharm.com

Janssen Korea

www.janssenkorea.com

Humedix

www.humedix.com

Eisai Korea

www.eisaikorea.com

Donwoo Syntech

dongwookr.com

Otsuka Pharmaceutical

www.otsuka.co.kr

Samsung Bio Epis

www.samsungbioepis.com

C&R Research

www.cnrres.co.kr

White Global Pharmaceutical Corp.

www.whpharma.com

Korea Atomic Energy Research Institute

www.kaeri.re.kr

Crystal Genomics

www.crystalgenomics.com

Korea United Pharm

www.kup.co.kr

Bio Leaders

www.bioleaders.co.kr

Union Korea Pharm

www.ukp.co.kr

Meid Help Line

www.medihelpline.co.kr

CTC Bio

www.ctcbio.com

Korea Ginseng Corp.

www.kgc.or.kr

Hankook Korus Pharm

www.koruspharm.co.kr

Korea Pharma

www.koreapharma.co.kr

Pharvis Biotech Korea

www.pharvis.co.kr

Ferring Pharmaceuticals

www.ferring.co.kr

Korea Prime Pharma

www.koreaprime.co.kr

33

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