The Biotechnology industry – Future Directions in iMalaysia

Rofina Yasmin OthmanNational Biotechnology Division (BIOTEK) MOSTI

Malaysia is rich in Biodiversity

Malaysia is one of the 17 mega-diverse countries identified by the United Nations Environment Programme (UNEP) as harbouring the majority ofthe earth’s species, which may have immense benefits forhave immense benefits for the future generations.

Malaysia is well-endowed withnatural resources in agriculture, forestry and minerals

• Biotechnology is the new economic engine for sustainable development• By 2020 the government envisages this sector will employ up to 160 000By 2020, the government envisages this sector will employ up to 160,000

people and will contribute to 5 % of the Nation’s GDP• The sector is expected to generate RM248 billion in revenue by 2020.

Malaysia Economic Transformation & DriversMalaysia Economic Transformation & DriversSource : Malaysia’s National Economic Action

Council

Knowledge and

Knowledge-and innovationbased

KNOWLEDGE BASED / INTELLECTUAL CAPITALKNOWLEDGE BASED / INTELLECTUAL CAPITAL

P d ti it d i

Knowledge-and innovation driven

High-tech Manufacturing & Services

HIGH TECHNOLOGY / SERVICES HIGH TECHNOLOGY / SERVICES

KNOWLEDGE BASED / INTELLECTUAL CAPITALKNOWLEDGE BASED / INTELLECTUAL CAPITAL

Productivity-driven

Medium-tech Manufacturing & Services

Investment-driven

Assembly-type Manufacturing

TECHNOLOGY / FOREIGN DIRECT INVTTECHNOLOGY / FOREIGN DIRECT INVT

Labour-driven

Primary Commodities

INDUSTRIAL / IMPORT SUBSTITUTIONINDUSTRIAL / IMPORT SUBSTITUTION

Labour-driven

Commodities

AGRICULTURE / PRIMARY COMMODITYAGRICULTURE / PRIMARY COMMODITY

19961960 19951970 1980 2005 2020

Malaysia at a Crossroads

Gone beyondGone beyond middle income phase & need

to move to

Strategies have worked

but needto move to high income

economy

but need adjustment

M t hift t P tMust shift to new strategies

to tackle h ll &

Promote greater

competition & fl ibilit tchallenges &

upgrade economy

flexibility to enable private sector growth

4Source: EPU

The vision: a new economic model, based on innovation, creativity and high value-, y gadded activities,

The target: more than double the per capita income of the rakyat over the next 10 yearsyears

The New Economic Model (NEM)

•A Radical Change is needed - Sustainable over long-term- Reach everyone in the countryy y- Enable Malaysia to reach highincome status

• Characteristics of Malaysia in 2020- Market led- Well Governed- Regionally Integrated- Entrepreneurial- Innovative

• How Are We Going to Do it?- Economic Transformation Programme (ETP)

The ETP will be driven by 8 Strategic Reform- The ETP will be driven by 8 Strategic Reform Initiatives (SRIs)

- The NEM will be a catalyst to unleash Malaysia’s Growth PotentialMalaysia s Growth Potential

- NKEAs

Aspirations of a united and advanced nation in line with the 1Malaysia conceptAspirations of a united and advanced nation in line with the 1Malaysia concept

The Goals of the NEMAspirations of a united and advanced nation in line with the 1Malaysia conceptAspirations of a united and advanced nation in line with the 1Malaysia concept

Goals of the New Economic Model

High Income

Targets US$15,000 - 20,000per capita by 2020

R k tRakyatQuality of Life Meets present needs

without compromising future

Enables all communities to fully

benefit from the

Inclusiveness Sustainability

generationswealth of the country

Inclusiveness Sustainability

Source NEM

The Strategic Reform Initiatives (SRIs) Re-

energising Private Sector

DevelopinE i

8

Developing Quality

Workforce

Ensuring Sustainability of Growth 1

2

8

8Strategic Reform

Initiatives

Competitive

Domestic E

Enhancing Sources of Growth

27

Initiatives(SRIs)

Economy

Building

of Growth3

6Strengthenin

g Public SectorTranspare

nt & Market

F i dl

Building knowledge base infra-structure

4Friendly Affirmative Action

All th 8 SRI hAll th 8 SRI h tti i t ll t ttti i t ll t t

45

Source: NEM

All the 8 SRIs have crossAll the 8 SRIs have cross--cutting impact over all sectors to cutting impact over all sectors to address the economic downward spiral address the economic downward spiral

National Transformation

The Four Pillars of National Transformation

Vision 2020

HighIncome

Preservation and Enhancement of Unity in Diversity

Effective delivery of

Government

New Economic Model-

A high Income ,

Smooth Development of the

Government’s Development

RakyatQuality of Life

RakyatQuality of Life

Inclusiveness Sustainability

Unity in Diversity Government services

g ,inclusive and

sustainable Nation

Development Programme

1Malaysia1Malaysia Government Government Transformation Transformation

Economic Transformation

10th

Malaysia

6 National Key R lt A

8 Strategic Reform

People First Performance

Now

ProgrammeProgramme Programme Plan

Macroeconomic Growth Targets & E ditResult Areas

(NKRAs)Initiatives

(SRIs) March 2010March 2010

April 2009April 2009January 2010

& Expenditure Allocation

June 2010Source: NEM

THE NKEAsTHE NKEAs

Definition of “NKEA”

National Key Economic Areas (NKEA)is a driver of economic activity that has thepotential to directly and materially contributepotential to directly and materially contributea quantifiable amount of economic growthto the Malaysian economyto the Malaysian economy

Source NKEA labs

Source NKEA labs

NKEA AgricultureNKEA Agriculture

Demand is expanding rapidly for the products hi h M l i i bl t d

…but we are unable to capitalise on this d d d t t i

Global demand for herbal products, 1997 – 2020USD billion

10 5%

which Malaysia is able to produce… demand due to current issues

Lack of

Issues

▪ Predominance of small scale farmers e g in

There is no doubt that agriculture

Global demand for edible bird’s nest, 2010 – 2020

60 210

600

20201997

10.5%

2006

scale economies

scale farmers, e.g. in paddy farming, the average farm size is 2 ha (economic size approximately 500 ha)

that agriculture should be an NKEA

And that the Herbal,USD billion

6.83.4

10.5% Production Driven

▪ Minimal effort to meet market demands e.g. in areas such as shelf life extension, packaging, clinical trials

And that the Herbal and wellness Industry a Key area for focus for its

20202009

Global demand for aquaculture products, 2005 –2020USD billion

• Lack of R&D on post-harvest crop treatment and adoption of standards

potential to contribute significantly to the

170

54

8.5%

20202005

Low value products

▪ Focus on products that are commodities:

–Traditional fish vs. fish that meet food safety and

economy

EU demand for tropical fruits, 2001 – 2007USD billion

9.7%

safety and environmental standards

–Products for general health benefits vs. health supplements Source NKEA labs

74

20072007

health supplements that can make specific claims

16 Entry Point Projects (EPPs) and 11 Business Opportunities will generate USD6.7 billion GNI by 2020

2020 GNI contribution from top 10 EPPs USD million

USD5,637 mil

441 432 428 398 323 317 276419

1,419491

692

Overall GNI, 2020USD billion

High ValueHerbal

Products

Premium FFV

Mini Estate Sea-weed

Integra-ted Cage Farming

Paddy Farming in other irrigated areas

Replica-tion of iZAQ

Paddy Farming in MADA

Biotech MNCs

EBN Swiflet

Farming

Food Park

Others *USD billion

1.12.4

14.86.7

2020 GNI contribution from Business Opportunities USD million

* Regional Breeding Services (USD 146 mil); Dairy Cluster (USD 102 mil); Cattle Feedlot (USD 57 mil); Cattle Integration with Oil Palm (USD 47 mil); Cattle overseas JV (USD 36 mil); Fragrant Rice (USD 31 mil)

USD1,125 mil5.7

12.45.6

259

2009GNI

EPPs BizOpp

2020 GNI

259

13381 68 63 57 47 35 17

197 169

Orna-mental

Herbal Product

Aqua Feed Mill

Nutra from

FDI for Tropi cal

Free Range

Mush-room

Premium Snack

SFI Facilities

Aqua Export

Ready-to eatmental

FishProduct

DistributorFeed Mill from

Other Herbs

Tropi-cal Herbs

Range Chicken

room Project

Snack Facilities Export Center

to-eat Jackfruit

Source NKEA labs

Whats in it for the Malaysian Herbal industry?

• Taking Malaysian herbal products to the international market under one parent pbrand

• Creation of the Herbal development• Creation of the Herbal development Authority

• Focus on 5 herbs; generate revenue of USD 1,505 mil from high-value productsUSD 1,505 mil from high value products

Increase profit by adding value through high quality processing and innovative products

To From

H bHerbs

Functional Food Nutraceuticals and botanical drugs

Technology Driver-gyBiotechnology

Convergence of Wellness and Biotechnology

• Moving the industry up the value chain• Advent of the new technologies – omicsAdvent of the new technologies omics,

bioinformatics, nanobiodelivery systemsHi h th h t i d di• High throughput screening and discovery

• New Bioprocess technologiese op ocess tec o og es

• High value Neutraceuticals and Botanical Drugsg

• Personalised Medicine and nutrition

Biotechnology at the centre of technology convergence

NATIONAL BIOTECHNOLOGY POLICYNATIONAL BIOTECHNOLOGY POLICYBRAND STATEMENTBRAND STATEMENT

Biotechnology for wealth creation and socialBiotechnology for wealth creation and socialwell-being

VISIONVISIONVISIONVISION

Position biotechnology as the new economicgyengine to enhance prosperity and wellness ofthe nation by 2020

OBJECTIVES OF NATIONAL BIOTECH POLICYOBJECTIVES OF NATIONAL BIOTECH POLICY1. Generate new engine of growth for the nation by creating value

that is competitive, innovative and consistent with Vision 2020

2. Formulate an economic, legislative and regulatory framework that will support the core biotechnology sectors

3. Identify implementation strategies in order to establish Malaysia as a competitive nation with leading edge businesses

4 De elop biotechnolog to enhance healthcare and medical4. Develop biotechnology to enhance healthcare and medical support for a better quality of life for all Malaysians

5 Extract greater value from agriculture and natural resources by5. Extract greater value from agriculture and natural resources by utilizing Malaysia’s unique biodiversity / natural environment

SUMMARY OF POLICY THRUSTSTHRUSTS

THRUST 1THRUST 1 : Agricultural Biotechnology Development: Agricultural Biotechnology Development

THRUST 2THRUST 2 : Healthcare Biotechnology Development: Healthcare Biotechnology Development

THRUST 3THRUST 3 : Industrial Biotechnology Development: Industrial Biotechnology Development

THRUST 4THRUST 4 : R&D and Technology Acquisition: R&D and Technology Acquisitiongy qgy q

THRUST 5THRUST 5 : Human Capital Development: Human Capital Development

THRUST 6THRUST 6 : Financial Infrastructure: Financial InfrastructureTHRUST 6THRUST 6 : Financial Infrastructure: Financial Infrastructure

THRUST 7THRUST 7 : Legislative and Regulatory Framework: Legislative and Regulatory Framework

THRUST 8THRUST 8 : Strategic Development: Strategic DevelopmentTHRUST 8THRUST 8 : Strategic Development: Strategic Development

THRUST 9THRUST 9 : Government Support and Commitment: Government Support and Commitment

20

BIOTECHNOLOGY ECOSYSTEMBIOTECHNOLOGY ECOSYSTEM

TechnologyTechnology LawLaw IPIP

Technology, Incentives, Support, AwarenessTechnology, Incentives, Support, AwarenessR&DR&D

Venture Venture CapitalistCapitalist

OverseasOverseas

Technology Technology Transfer Transfer

LawLawRegulatoryRegulatory

IP IP SupportSupport

rket

rket

R&D R&D SupportSupport

CapitalistCapitalist

Gov.Gov.

ScientistsScientists

Bi t hBi t hMalaysian Malaysian ap

ital M

aap

ital M

aTaleTaleGov. Gov.

InvestmentInvestmentBiotech Biotech

ManagersManagers

yyBiotechBiotechIndustryIndustry

try

and

Ca

try

and

Ca ent Poolent Pool

FinancialFinancialInstitutionInstitution

WorkforceWorkforceDevelopmentDevelopment

N ti lN ti l

Indu

stIn

dust

MedicalMedicalCentresCentres

National National Biotech Biotech

InstitutesInstitutes

UniversitiesUniversitiesR & D InstitutesR & D Institutes

Scientific Discovery, Translational ResearchScientific Discovery, Translational Research

CompetitiveCompetitiveLeadingLeading

Implementation PhaseImplementation PhasePh IIIPh IIIPhase IIPhase II LeadingLeading

EdgeEdgePhase IIIPhase III( 2016 ( 2016 –– 2020 )2020 )

Global PresenceGlobal Presence

Phase IIPhase II( 2011 ( 2011 –– 2015 )2015 )

Science toScience toBusinessBusiness

Phase IPhase I( 2005 ( 2005 –– 2010 )2010 )

••Establishment of advisory Establishment of advisory and and implemnetationimplemnetationCouncilsCouncils

•• Consolidates strengths and Consolidates strengths and capabilities in technology capabilities in technology

••Develop expertise in Develop expertise in drug discovery and drug discovery and development based on development based on

Global PresenceGlobal PresenceBusinessBusinessCapacity BuildingCapacity Building

Councils Councils

••Establishment of Malaysian Establishment of Malaysian Biotech CorporationBiotech Corporation

••Education and training ofEducation and training of

p gyp gydevelopmentdevelopment

•• Further develop expertise Further develop expertise and strength in drug discovery and strength in drug discovery

d d l td d l t

natural resourcesnatural resources

••New products New products developmentdevelopment

••Education and training of Education and training of knowledge workersknowledge workers

••Development of legal and Development of legal and IP frameworksIP frameworks

and developmentand development

•• Strengthen innovation and Strengthen innovation and technology licensingtechnology licensing

Promote global Mala sianPromote global Mala sian

••Technology acquisitionTechnology acquisition

••Intensify investment Intensify investment promotionpromotion

••Business development Business development through Accelerator through Accelerator ProgrammesProgrammes

•• Promote global Malaysian Promote global Malaysian companiescompanies

••Intensify spinningIntensify spinning--off of off of companiescompanies

••Strengthen brandingStrengthen branding••Build Malaysian brandingBuild Malaysian branding

••Initial job and industry Initial job and industry creation in agricultural creation in agricultural biotech healthcarebiotech healthcare

••Develop capability in Develop capability in technology licensingtechnology licensing

••KnowledgeKnowledge--intensive intensive jobs creationjobs creation

ItIt isis intendedintended thatthat byby 20202020MalaysiaMalaysia willwill bebe aa globalglobal playerplayerbiotech, healthcare biotech, healthcare

biotech, industrial biotech biotech, industrial biotech and bioand bio--informaticsinformatics

jobs creationjobs creation yy gg p yp yinin biotechnologybiotechnology andand willwillgenerategenerate atat leastleast 2020 globalglobalMalaysianMalaysian companiescompanies

In RMK9In RMK9• In biotechnology, 349 biotech companies,

predominantly in agriculture, industry and y g yhealthcare, invested a total of RM4.5 billion

• (RM1.9 billion from the private sector and RM2.6 billion from the Government)billion from the Government)

• Of these>170 Bionexus companies were registered

• This investment was in a range of activities including genomic science, stem cells, biodiesel and medical devicesand medical devices

• There was also progress in research and development (R&D) by biotech companies with 650 patents granted for biotech related research650 patents granted for biotech-related research in Malaysia."

• Contribution to GDP estimated at 2.2%%

National Phamaceutical and Neutraceutical Institute

Plants Extracts Fractions Chemicals

NH2 OH

OO

CH3

CH3 CH3

CH3CH3

OAc

OSO3

HNH O

OH

Jaspine B

O CH3

OCH3

CH3

OH

Norcarotenoid

H3

NNH

2

NH2

H

H

OH

squalamineO CH3

Jaspine A

24

Bio XcellBio-Xcell

A custom built ecosystem for industrial and healthcare biotechnology, Nusajaya

RMK10 and theRMK10 and the NATIONAL BIOTECHNOLOGY POLICY

The 10th Malaysia Plan is in synchrony with the 2nd phase of the National Biotechnology Policy (NBP) “Science to Business“

The target for activities in the Biotechnology S t i l dSector include:

5% contribution to GDP and also to the increase in GNI by the year 2020increase in GNI by the year 2020

The establishment of 20 Global Biotechnology CompaniesCompanies.

STRATEGIES UNDER RMK – 10 WITHSTRATEGIES UNDER RMK 10 WITH SIGNIFICANCE TO BIOTECHNOLOGY

SECTORSECTOR• First: Designing Government philosophy g g p p y

and approach to transform Malaysia using NKRA methodology;

•Second: Creating a conducive environment for unleashing economic growth;

•Third: Moving towards inclusive socio-economic development;

•Fourth: Developing and retaining a first-world talent base; and

MALAYSIA AIMS FOR SELECTED NICHE AREAS ALONG MALAYSIA AIMS FOR SELECTED NICHE AREAS ALONG THE GLOBAL VALUE CHAINTHE GLOBAL VALUE CHAIN

Abundance of bio-resources

Abundance of bio-resources

Ethnic &Genetic diversity

Ethnic &Genetic diversity

Infra, electronics, manufact. & ICT

Infra, electronics, manufact. & ICT

Extensive tradeconnections

Extensive tradeconnections

EstablishedEstablished

Value PropositionsValue Propositions

Establishedresearch base

Establishedresearch base

Distribution/ Marketing to End

Users

Distribution/ Marketing to End

UsersValue ChainValue Chain

Primary & Secondary

Manufacturing

Primary & Secondary

ManufacturingTherapeutics and

VaccineTherapeutics and

Vaccine

Appl. Res. & Innovation in Agriculture,

Healthcare and I d t i l Bi t h

Appl. Res. & Innovation in Agriculture,

Healthcare and I d t i l Bi t hIndustrial BiotechIndustrial Biotech

Focus Areas and Sub-AreasSelected Niche AreasSelected Niche Areas

I d Ch llIssues and Challenges Faced by the local BiotechFaced by the local Biotech

Industry yIdeas and Opinions from theIdeas and Opinions from the

Biotech Community

TalentsTalents

• Shortage of homegrown talents and expertise• Human Capital availability and quality are critical p y q y

in the development of the biotechnology industry. y

• There is a need to enhance/introduce a direct industry input towards the coordination ofindustry input towards the coordination of demand driven human capital requirement to provide both the quality and quantity of humanprovide both the quality and quantity of human capital.

• Government/Institutions/private sector collaboration still modest

• Environment conducive to market driven innovative biovalues still developingg

• Limited number of world class companies to raise standard and create competitionraise standard and create competition

• Lack of Success Story (Domestic product with international competitiveness)international competitiveness)

• Need for indigenous global players

Need to increase competitiveness

• Minimal certification of local production facilities and workforce towards international standards

• delays in implementation of programmes• delays in implementation of programmes• and regular updating of guidelines and

amendments for relevant stakeholders • Facilitative regulatory environment• Facilitative regulatory environment

Finding the gaps in the value chainFinding the gaps in the value chain

Funding the gapFunding the gapGap in funding to drive conversion of R&D to C -Gap in funding to drive conversion of R&D to C

Commercial product development, industrial upscaling clinical trials regulatory complianceupscaling, clinical trials, regulatory compliance

Funding is a crucial issue and should not solelyFunding is a crucial issue and should not solely depend on Government grant scheme to support.

External sources of funds such as from VC and institutional private sector investors are needed,institutional private sector investors are needed, but are not forthcoming in view of the perceived risk and time lines for maturaton of biotechrisk and time lines for maturaton of biotech products

Sustain fundamental researchSustain fundamental research

• Greater understanding of biological processes will help to meet the needs of an expanding global population while reducing the adverse effects of humans on the environment.

• New treatments and preventive measures for diseases and injuries will improve the quality of life and lengthen the human life span.

• New paradigms in personalised healthcare andNew paradigms in personalised healthcare and wellness- research in nutragenomics and pharmacogenomicspharmacogenomics

Banking on Biotech IPBanking on Biotech IP• Need to advance financial and banking support g pp

to IP-related industries such as biotechnology industry. y

• Facilitate commercial exploitation of IP for value creation and bridge the gap between R&D andcreation and bridge the gap between R&D and commercialization.

• encourage banking and financing management• encourage banking and financing management sector to develop financial instruments for banks and financial institutions for the purpose ofand financial institutions for the purpose of collateralization and securitization of IP.

The Way Forward for BiotechnologyEconomic Transformation through Innovation • Align Biotechnology and the National Innovation Model to NEMs NKRAs and NKEAsModel to NEMs ,NKRAs and NKEAs• Promoting basic research in Biotechnology with perceived significant potential impact on Future

SRI 6Building the Building the

Knowledge Base Knowledge Base

p g p peconomic development• Reward for excellence in Biotech Research

and and InfrastructureInfrastructure

• R & D Biotech incentives for business enterprises• Incentives for International Networking• Incentives for International Networking • Strengthen the role of Universities as research institutes• Establish strong Biotech research teams• Increase emphasis on research training of young scientists in internationally competitive environments

The Way Forward for Biotechnology Economic Transformation through Innovation

•Transformation Health and wellness sectors through continuous Innovation of significant biotechnological advancement

SRI 6Building the

Knowledge Base

biotechnological advancement• Develop, acquire specialised skills needed to drive the Biotechnology sectorg

and Infrastructuredrive the Biotechnology sector • Foster R & D links between institutions of higher learning and private sector• Align Biotech R & D to national growth objectives • Fund Biotech R & D through an open access• Fund Biotech R & D through an open access system through competition• Biotechnology Research Powerhouse andBiotechnology Research Powerhouse and centre of excellence run on a commercial basis

SRI 7Malaysia must build on its strategic location together with advantages arising from its richSRI 7

Enhancing Sources of

Growth

together with advantages arising from its rich biodiversity

• Focus on Herbal downstream industries to develop indigenous technology and innovation or acquire technology to meetnew market demands

•Develop industries that support sustainable•Develop industries that support sustainabledevelopment such as use of traditional plants and herbs for modern applications developedand herbs for modern applications developed through Biotechnology

Preserving our natural non-renewable resources and safeguarding the interest of

SRI 8Ensuring S t i bilit

future generations by managing it with strategic policies

Sustainability of Growth • Embrace Green technology

• Increase downstream activities on high valueIncrease downstream activities on high value added products•Utilizing biotechnology in various ways to reduce or mitigate carbon emission

KEY AREAS OF OPPORTUNITY FOR GROWTH AND COVERGENCE IN BIOTECHNOLOGY ANDAND COVERGENCE IN BIOTECHNOLOGY AND

THE HERBAL INDUSTRY

TOXICOLOGYDISCOVERY SUSTAINABLE

CROP PRODUCTION TOXICOLOGY PRECLINICAL

STUDIES

STANDARDISATION PRODUCT DEVELOPMENT

TerimaTerima KasihKasihTerimaTerima KasihKasih

BahagianBahagian BioteknologiBioteknologi KebangsaanKebangsaanBahagianBahagian BioteknologiBioteknologi KebangsaanKebangsaanKementerianKementerian SainsSains, , TeknologiTeknologi dandan InovasiInovasi MalaysiaMalaysia