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BIOECONOMY INITIATIVE MALAYSIA

INTRODUCTION The biotechnology industry is an increasingly significant economic contributor to leading Asian countries such as Japan, China, India, South Korea and Taiwan. Developing countries such as Singapore, Philippines and Thailand have also incorporated biotechnology into their long-term growth strategies and national development roadmap. Malaysia, through its National Biotechnology Policy (NBP) is among the leading Asian countries coordinating and intensifying a national effort in maximising the potential economic benefits of the entire biotechnology ecosystem and related value chains. Biotechnology offers technological solutions to future global challenges

Food and energy security Design treatment for human diseases

Minimising climate change

WHAT IS THE BIOECONOMY? The Bioeconomy refers to all economic activity derived from scientific and research activity focused on understanding mechanisms and processes at the genetic and molecular levels and its application to industrial process. Bioeconomy activities involve application to agriculture, health, chemical, energy industries and many others. It covers all industries and economic sectors based on the values implicit in biomaterials that can be translated into new income and social well being and at its core is its focus on sustainability.
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BACKGROUND The basis of the Bioeconomy is advanced knowledge in the life sciences and biotechnology supported by ICT, nanotechnology, chemistry, physics, engineering, information technology and market research. The Bioeconomy to 2030: Designing a Policy Agenda report published by Organization for Economic Co-operation and Development (OECD) estimates that bioeconomy will contribute a global average of 2.7% to Gross National Income (GDP) and the discoveries of 10-14 new drugs per year over the next 5 years and will be responsible for 10% of chemical production by 2030. The first phase of NBP recorded industry investment exceeding USD 1.3 billion (RM 4.5 billion) in which more than 40% contributed by the private sector. Contribution to GDP is estimated to reach 2.2% by the end of 2011. More than 50,000 workers in this field and in related fields were recorded in 2010. The figures suggest an industry with a promising potential for having a high impact on GDP and GNI growth.

RATIONALE Malaysia has an appropriate basis to become a global bioeconomy hub based on a number of factors listed in the annual report of the Malaysian Biotechnology Country Report 2009/2010 and Malaysian Biotechnology Statistical Indicator Report 2010. Some of these factors is the support by the government on the biotechnology sector, the implementation of positive policies, good infrastructure, natural resources, biodiversity and strategic location. Bioeconomy will be a sustainable economy for Malaysia as it encompasses all industries and economic sectors that produce, manage and utilise biological resources such as agriculture, forestry, fisheries, food, wellness, chemicals and renewable energy. Although based on knowledge and innovation in biosciences, bioeconomy converges with other economic sectors/technologies i.e. engineering, computer science, chemistry and nanotechnology, and cross-cuts into public and private sectors.

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Endorsed by the Biotechnology Implementation Council, chaired by the Honourable Prime Minister in May 2011, the Bioeconomy Initiative Malaysia will consolidate and converge to maximise participation of local private industry in the high-impact opportunities in bioeconomy and ensuring continuity and implementation of all related national policies. The rationales for Bioeconomy Initiative Malaysia (BIM) are: Recognising biotechnology as a key cross-cutting technology driver in transforming Malaysia into high income economy; The need for consolidation and convergence of many bioeconomy initiatives in multiple sectors to maximize local participation from both public and private domains; To tap into the unrealised application of locally developed technologies and discoveries; Reconciling the urgent need to focus on technology that utilises renewable resource; and A comprehensive bioeconomy initiative anchored by the National Biotechnology Policy and linked with other related policies.

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FRAMEWORK OF BIOECONOMY INITIATIVE MALAYSIA (BIM)

Other related policies

AREAS UNDER NATIONAL BIOTECHNOLOGY POLICY

Other related policies

"Green" Chemistry

Biocatalysts

Vaccines

Biogenerics

Advanced Bioprocessing Technologies for Fine & Specialty Chemical and Biomaterials

Bio-generic Manufacturing

Molecular Diagnostics

Biobanking

Industrial Biotechnology

Healthcare Biotechnology

Development of Agricultural Biotechnology Centres of Excellence

Adding Value to Crops & Foods

Natural products discovery and commercialisation

Marine Biotechnology Initiative

Agriculture Biotechnology

Other related policies

Other related policies

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Bioeconomy Initiative: Related EPPs

FDI in agriculture Breeding services Crop Herbal products Aquaculture Livestock Extracts Biofeed

AGRICULTURE

BioControl Biofertilizer

HEALTHCARE
Genomics Biosimilars Clinical trials Medical devices Pharmaceutical generics

INDUSTRIAL

Industrial biotechnology Oleo derivatives Food- and healthbased downstream Green technology

Legend :

Existing EPP with direct bioeconomy impact Existing EPP with indirect bioeconomy impact Proposed projects with direct bioeconomy impact

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Linkages to Industry

A. Extracts

C. BioControl

E. BioSimilar G. Industrial Biotech F. Genomics

B. BioFeed

D. BioFertiliser

Key Activities/Deliverables and Timeline

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BIOECONOMY OPPORTUNITIES

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1) Bioextraction: Increase Capabilities of Extraction Facilities a) Justification The Asia-Pacific Active Bio Compound market revenues will grow at a CAGR of 9.6% from 2010 to 2016. The high potency Active Bio Compound segment is showing attractive growth opportunities for the pharmaceutical players. A number of companies are expanding their facilities for the production of Active Bio Compound. A number of contract manufacturers are coming up with high potency manufacturing capabilities. There is an increasing trend of contract manufacturing being used in the high potency segment. b) Targeted result in 2020
Products
High Value Active Pharmaceutical Botanical Drugs -Polypeptide K from Momordica charantia sp High Value Active Bio cosmetic ingredient Xanthones from Garcinia mangostana High Value Active Health Supplementary ingredients Marine Collagen peptide from Tilapia spp
Year Output Active Compound Application Generic Products 2012 1 2 10 2013 3 10 2014 1 15 2015 1 2 10 2016 2 10 2017 1 15 2018 1 2 10 2019 2 10 2020 10

Targeted Output

Outcome

GNI Jobs Created

New domestic high value standardized active compound for pharmaceutical, food and cosmetic industry (100 products) Value add the locally sources standardized active compound (reduce import dependency on the active ingredients) Increase life expectancy and healthy community (refer to future health trend analysis)

Estimated USD 240 mil (RM 720 mil) until 2020 10,500 jobs in manufacturing, lab analysis, marketing, plantation

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c) Key Activities/Deliverables and Timeline

2) Bioextraction: Strengthening Mushroom Seed Production and Introducing New Varieties a) Justification Globally, mushroom industry is worth RM 135 billion (2005). Mushroom with its natural ascendency in term of dietary supremacy can be the primary functional food. Fungi from the Basidiomycota received great interest because it contains large number of biologically active compounds such as polysaccharides, glycoproteins, triterpenes and antibiotics. Potential to lower cholesterolemia, modulate the immune system and inhibit substances are able tumoral growth, protect liver, antifibrotic, anti-inflammatory, anti-diabetic, anti-viral and antimicrobial activities. However, nutritionals and functional properties of indigenous mushroom in Malaysia is scanty and poorly known. This shortfall is due to limited effort in exploiting the economic potential of indigenous mushroom and establishing a bioextraction facility.
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b) Key Activities/Deliverables and Timeline

3) Bioingredients: Uncovering Natural Bioresources to Develop Bioingredient a) Justification Malaysia is one of the 12 megadiverse countries in the world and is rich with unexplored natural resources. Malaysia is a strategic country to accommodate global food ingredients market which has an estimated of RM 72 bilion (USD 24 billion) in 2010 and grows at approximately of 3-5% annually. Current trend in increasing health awareness and food safety are influencing the reformulation, detection advances, and more stringent regulatory safeguards in food ingredient industry. The turning point in stevias fortunes came in 2008, when steviol glycosides (the sweetening components of the leaf) were deemed to be safe, and Rebaudioside A, one particular steviol glycoside, was granted GRAS (Generally Recognised as Safe) status in the US. Stevia herb in its natural form is approximately 20-30 times sweeter than common table sugar. Extracts of Stevia can range anywhere from 100 to 300 times sweeter than table sugar. Stevia also being used as medicine, cosmetic ingredient, and dentifrice.
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It is estimated global market for Stevia will reach 11,000 metric tonnes by 2014, equivalent to USD 825 mil. The aim is to strengthen the production, product quality and marketing efforts to penetrate global export markets for functional ingredients: Reb-A from Stevia rebaudiana Bertoni. b) Targeted result in 2020 Products Targeted Outputs GNI Jobs created Plantation of Stevia (PC1 strain), Stevia crude extract 500 ha of stevia plantation & 500 MT of stevia crude extract RM 43 million 800 jobs

c) Key Activities/Deliverables and Timeline

4) Biofeed: Production of Quality Feed with High Density for The Local Aquaculture Industry a) Justification Globally, aquaculture contributed 48 per cent of aquatic food in 2010.

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Live feed plays a crucial role for the success of any aquaculture activity - is essential for the early developmental stages of the life cycle of aquatic organisms. Local seed industry is facing a setback of continuous and consistent supply of quality live feed to sustain the aquaculture seed industry. This shortfall is due to limited effort in exploiting the economic potential of local live feed and establishing the production of live feed in commercial scale. Annual import value of artemia cysts is reported at RM 4.5 million and is expected to increase 6-10 folds within 5 years. Realising the economic importance of live feed and capitalising on Malaysias biodiversity advantage, hence live feed production should be pursued as a new industry through bioeconomy.

b) Key Activities/Deliverables and Timeline

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5) Biocontrol: Development of Biopesticides for Major Agricultural and Industrial Crops in Malaysia a) Justification Biopesticides are defined by the US Environmental Protection Agency (EPA) as pesticides derived from natural materials, such as animals, plants, bacteria and certain minerals. The EPA defines three kinds of biopesticides: microbial, consisting of microorganisms; biochemical, which are naturally occurring substances such as extracts and pheromones; and plantincorporated protectants, which are substances that plants produce from genetic material added to the plant. Biopesticides market is growing rapidly, increasing from USD 672 million in 2005 to over USD 1 billion in 2010, at an AAGR of 9.9%. In Asia, the biopesticide market was USD 120 million in 2010, an AAGR of 12% between 2005 and 2010. The biopesticide market generally (including botanicals, semichemicals and macro- or micro-organisms) was worth approximately USD 1 billion in 2007/8; approximately 2.5% of the USD 40.5 billion pesticide market (agrochemical sales estimate for 2008). *CPL Business Consultants. Advantages of Biopesticides: Safer and more effective compare to conventional chemically synthesized pesticides. Minimum resistance towards biopesticides.

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b) Key Activities/Deliverables and Timeline

6) Biofertiliser: Biofertilizer

Converting

(low-value)

Agrowaste

into

(high-value)

a) Justification Most of the Malaysian soils are highly leached infertile acid tropical soil and the application of fertilizer with high organic matter is essential to support crop cultivation. With large tracts of land cultivated with perennial crops such as palm oil and rubber, substantial quantities of fertilizers are required annually to sustain maximum growth and yield. Continuous and excessive application of chemical/mineral (fertilizer and pesticide) causes extensive soil deterioration and elimination of soil macro and micro fauna. Under the 3rd National Agricultural Policy, organic agriculture is being identified as a niche market opportunity for vegetables and fruits. Due to the promotion by the government for more sustainable use and better management of the available natural resources, the use of organic- and bio- fertilizers has gained popularity. Organic fertilizer are naturally occurring fertilizer which include manure, slurry, worm casting, peat and seaweed; whereas,
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processed organic fertilizer include compost, humid acid and amino acid. Generally, an organic fertilizer provides organic matter which is essential for the establishment of soil microorganism and is one of the building blocks for humus rich fertile soils. Naturally occurring soil microbes will convert the organic matter into its mineral form (nutrients) ready for plants. Biofertilizer, as the name suggest, contains biologically active living organisms that, both synthesize the atmospheric elements into soil minerals as plant nutrient, and decompose organic matters into its minerals. Biofertilizers may be in solid or liquid medium, enriched with high microbial density (i.e. > 10000000/g). Although the exact worldwide data for biofertilizer market is not available, but from available sales volume, it is estimated to be well over USD 3 billion. In Malaysia, the sale recorded by major Biofertilizer producer is estimated to be approximately RM 350 million (as of 2008). Incorporation of biofertilizer with organic fertilizer is crucial to: Improve soil fertility (with improved humid acid and amino acid content). Increase nutrient availability from the soil to the plants (i.e. breaking down of organic maters into its minerals, ready for plant uptake). b) Key Activities/Deliverables and Timeline

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7) Biosimilar: Develop and commercialise biosimilar a) Justification A biosimilar is a copy version of an already authorized biological medicinal product developed after its patent expired and with demonstrated similarity in physicochemical characteristics, efficacy and safety, based on a comprehensive comparability exercise. Not similar to generic drug (small molecule) because of its complexity, larger size and difficult to produce exact copy. Biosimilar is relatively a new area, started in 2006 with first approval of Omnitrope, a version of somatropin in EU. Currently 14 biosimilars already approved in EU. Guidelines already in place: EU, Malaysia (2008), India etc. Lower cost, shorter timeline, less risky than novel or innovator biologics. Biosimilars would provide an affordable alternative source (estimated discount as much as 85%*) of biologics drugs. Supply chain available in Malaysia (R&D, CMO, fill and finish facility, distribution). Fast growth (The global biosimilars market will grow from USD243 million in 2010 to USD3.7 billion in 2015 (source: Datamonitor). More than 30 branded biologics with sales of USD 51 billion set to lose patent exclusivity between 2011 and 2015. There is high potential for growth of biosimilar industry.

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b) Proposed biosimilar products


Product EPO Herceptin (trastuzumab) Rituxan (rituximab) Remicade (infliximab) Chimeric monoclonal antibody Rheumatoid arthritis, Ulcerative colitis, psoriatic arthritis, Crohn's disease.

Description

Glycoprotein hormone produced in kidney Used clinically for conditions such as -anaemia in patients with chronic renal failure, -chemotherapy induced anaemia in cancer patients. Epoetin beta (2004). Amgen/ Kirin *USD11 Billion

A humanised monoclonal antibody Targets a receptor that is overexpressed in tumor cells. Used as adjuvant therapy in patients with HER2 positive breast cancer.

A novel immunotherapeutic agent. Non-Hodgkins Lymphoma, Chronic lymphocytic Leukemia (CLL), Rheumatoid arthritis.

Indication

Off-patent Originator

2015 Genentech

2015 Roche/ Biogen Idec

2012 (US / EU) Johnson & Johnson/ Schering Plough USD5.1 Billion (datamonitor, 2007 sales) 5 to 10%

World market

USD4.1 Billion (datamonitor, 2007 sales)

USD4.6 Billion (datamonitor, sales 2007) 15%

CAGR

10%

23%

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c) Key Activities/Deliverables and Timeline

8) Biosimilar: Securing strategic investment for the biopharmaceutical and biologic projects a) Justification Lack of expertise and technology in this field. No commercial manufacturing plant for biopharmaceuticals has been setup in Malaysia yet.

b) Targeted result in 2020 Locally manufacture biopharmaceutical and biologic products. Technology transfer and developing local expertise in the relevant fields. Creating job opportunities (approximately 450 employees per company). GNI contribution (approximately RM 218.1 million in 2020 which is equivalent to USD 72.7 million).

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c) Key Activities/Deliverables and Timeline

9) Genomics: Bioinformatics And Healthcare genomics and proteomics a) Justification In 2010, the total global market for biomarkers was an estimated USD 13.5 billion. Global omics-based (proteomics, genomics) diagnostics technology market in 2009 was USD 19.3 billion. To pool the genome data together and easy accessible by the local and private sectors. High value project can attract FDI from companies involved in diagnostics, personalized medicine, precision medicine, etc.

b) Targeted result in 2020 Estimated GNI contribution of RM 1 billion. Jobs creation of 3,000 k-workers.
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c) Key Activities/Deliverables and Timeline

10)

Industrial Biotechnology (IB): Alternative Energy Crop Production

a) Justification Objective: To gradually reduce Malaysias dependence on natural gas a major input for Industrial Biotechnology and Malaysias manufacturing sector as a whole. The Malaysian Government has announced this year its commitment to reduce subsidies on natural gas to manage the countrys budget deficit. As a result, alternative sources of energy must be explored. Production and harvesting of energy crops is one of the most viable alternative energy options for Malaysia. These energy crops have not been fully explored in Malaysia. Prime example of an energy crop for Malaysia is Acacia. Low cost, low maintenance local plant with a 5-year planting cycle. Woodchips can be used to generate steam.
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Currently on small scale and scattered across the country. Other possible crop: Jathropa. b) Targeted result in 2020 Plantation area of 7,000 hectares. Steam supply to 3 strategic Industrial Biotechnology plants, valued at USD 77.1 million in 2020. GNI Impact in 2020 estimated at USD 65.8 million. Employment of 760 workers. c) Key Activities/Deliverables and Timeline

11)

Industrial Biotechnology: Biotechnology

Feedstock

Production

for

Industrial

a) Justification Objective: To create a supply of feedstock from domestic sources to attract IB investment. Feedstock is one of the single largest cost component that accounts about 40% -60% of the production cost in Industrial Biotechnology (IB). To make IB a long-term business opportunity, attention must be given to the critical issue of availability of the right feedstock and at the right cost. A mature industrial biotechnology sector requires a stable and sustainable supply of feedstock. As an emerging global destination
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of choice for industrial biotechnology activities such as bioplastics, biofuels and bio-based fine and specialty chemicals, it is critical for Malaysia to establish dedicated feedstock sources. Readily available and accessible feedstock sources would also attract further foreign interest to invest into the country. b) Targeted result in 2020 Starch production to be supplied to strategic IB plants, valued at USD 37.3 million in 2020. GNI Impact in 2020 estimated at USD 20.7 million Employment of 590 workers. c) Key Activities/Deliverables and Timeline

12)

Industrial Biotechnology: Translating Wastes to Wealth

a) Justification Objective: To create value from industrial/agriculture wastes. Wastes as the result of rapid growth in agriculture, industrial and manufacturing activities has drastically impacted the environment. Bioremediation is one of the key focus areas for development under the NBP. The success of bioremediation business represents a key ingredient in the completion of a conducive biotechnology ecosystem in Malaysia.

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A collective of green, biotechnology-based technology providers and businesses that offer innovative and highly effective waste management and treatment solutions have begins to emerge potential to contribute significantly to the economy. b) Targeted result in 2020 GNI Impact estimated at USD 11.4 million Employment of 100 workers. c) Key Activities/Deliverables and Timeline

13)

Industrial Biotechnology: Venturing into pre-commercialisation

a) Justification Objective: To attract new investment in IB and increase adoption of new IB technologies in local market. Bio-based chemicals/polymer producers often establish precommercial pilot plants as precursors to larger, full commercial production. These pilot plants are designed for early marketing purposes, demonstrate the viability of the technology in scale-up scenarios, conduct trials runs and testing to reduce commercialisation-scale risks, and even initiate early commercial activities. Support on these pilot projects will also position Malaysia as a viable destination for pre-commercialisation industrial biotechnology activities. These pre-commercialisation projects often lead to sizeable amount of investment.
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20 projects are targeted with average investment of RM10 million per project. To further accelerate the establishment of these projects, BiotechCorp will work closely with the existing economic corridors and state development agencies (such as ECER, IRDA, SCORE etc.). b) Key Activities/Deliverables and Timeline

14)

Industrial Biotechnology: Securing strategic investment

a) Justification Objective: To intensify investment in IB. Strategic investments, from both foreign and domestic sources, would substantially accelerate the development of the local biotechnology industry, while simultaneously establish a strong basis for a knowledge-based economy for the country and ensuring that the NBP targets are met. Increase in strategic investment would substantially encourage technology transfer, increase employment opportunities, generate revenue for the country and contribute significantly to the countrys total GNI. Collectively, the successful investments into industrial biotechnology would also position Malaysia as the preferred destination for industrial biotechnology investment and drive the economic growth of the country through bio-economy.
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b) Targeted result in 2020 Total investment of USD 500 million

15)

Other projects (to be proposed)

SUMMARY Bioeconomy Initiative Malaysia (BIM) is the framework to implement the action plan outlined in the National Biotechnology Policy (NBP) for the development of biotechnology industry in various fields so as the engine to improve the national economy, supporting Malaysias intention to achieve the status of high-income nation by 2020. The implementation of bioeconomy projects will add high economic value and provide a significant impact on GDP/GNI growth. The focus of bio-based economy includes focusing on investments in infrastructure, research and development (R&D) and expansion of highly skilled talent pool required by this sector. These focuses lead to rapid success achieved by bio-based sector under Phase 1 of NBP in the past 5 years which has contributed more than 2.2% of GDP and aims to achieve 5% at the end of Phase 3. BIM covers life-sciences and bio-based economy with current priority areas in bioextraction, biofeeds, biocontrol, biofertilisers, biosimilars, genomics and industrial biotechnology. The implementations expected to yield GNI score of USD0.9 billion and total investment of more than USD 2.1 billion in 2020.

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