GENET archive


7-Business: "Investors must be willing to wait years, if notdecades" for cash return

                                  PART I
-------------------------------- GENET-news -------------------------------

TITLE:  Investments in biotech require long-term view
SOURCE: Taipei Times, Taiwan, by Amber Chung
DATE:   16 Jul 2004 

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Investments in biotech require long-term view

INVESTMENT ADVICE: Industry insiders said the government and investors
must be willing to wait years, if not decades, to see a return on their cash

"Investment in research-oriented fields, such as gene therapy and
molecular diagnostics, cannot be reaped quickly and thus may not be so
appealing to local investors - but they are beneficial to Taiwan's long-
term development."

Johnsee Lee, president of the semi-official Industrial Technology
Research Institute Despite the government's vow to boost the nation's
biotech industry, the focus on a quick return may not be feasible for a
sector that requires long-term commitment and effort, an industry veteran
told the Taipei Times yesterday.

"I think Taiwan is doing the right thing [boosting its biotech
industry]," Stefan Ziegler, general manager of Novartis Taiwan Co, said
on the sidelines of a forum held by his company in Taipei yesterday.

The government has put a lot of effort into increasing investment in
biomedical research and catching up with advanced countries in this
field, Ziegler said.

Expectation for short-term returns, however, is an issue that the
government and the industry have to address, as the sector requires long-
term commitment, he said, noting that the research and development of the
drug Gleevec, which entered the market in 2000, began in the 1960s.

Waiting for results from the money-burning R&D process may not be
inspiring to local venture investors.

"Life science research and industry development requires time, but
investors also need incentives [to invest]," said Lai Por-hsiung,
president of President Life Sciences Co, one of the speakers at the forum.

Investors seeking quick returns could raise the proportion of their
investment in divisions such as medical devices, Lai said.

With capitalization of USS 100 million, President Life Sciences, the
biotech venture-capital arm of Uni-President Group, has 40 percent of its
money invested in biotech, 30 percent in herbal medicine and
pharmaceuticals and the rest in medical technology.

"Investment in research oriented fields, such as gene therapy and
molecular diagnostics, cannot be reaped quickly and thus may not be so
appealing to local investors - but they are beneficial to Taiwan's long-
term development," said Johnsee Lee, president of the semi-official
Industrial Technology Research Institute, another speaker at the forum.

Since these fields are more related to pharmaceutical companies than end
users, the nation could take advantage of its skilled personnel and lower
research costs to become a R&D hub for overseas pharmacists, Lee said.

Minister of Economic Affairs Ho Mei-hsueh said on Wednesday that the
government would target new drug development and medical devices in its
efforts to promote the biotech industry, which is included in the "Two
Trillion, Twin Star" investment plan, along with semiconductors, flat-
panel displays and the digital-content industries.

The biotech industry generated NTD 131.6 billion in revenues last year,
with NTD 61.4 coming from pharmaceuticals, NTD 40.6 billion from medical
devices and the rest from new biotechnology, according to the
Biotechnology and Pharmaceutical Industries Program Office.

                                  PART II
-------------------------------- GENET-news -------------------------------

TITLE:  Local biotech industry to grow with incentives
SOURCE: The China Post, Taiwan, by Christopher Hansen
DATE:   16 Jul 2004 

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Local biotech industry to grow with incentives

The biotechnology industry is expected to continue to grow in leaps and
bounds, according to biotech experts at the 2004 Novartis International
Biotechnology Leadership Camp in Taiwan. To facilitate and encourage such
growth, the government has set several goals regarding increased
investment in biotechnology with the emphasis placed on improving the
biotech industry through strategic partnerships with the international
research community.

The Ministry of Economic Affairs (MOEA) predicts this year's investment
in biotechnology will amount to roughly NTD 20 billion. It's goal is to
have a total investment of NTD 150 billion and annual revenues of NTD 250
billion in the biotechnology sector during the five-year period between
2002 and 2006.

In an amendment made last year to the Action Plan for Biotechnology
Industry Development, which was first launched in 1995 to recruit
scientific and industrial talents, build up infrastructure, and develop
the biotech industry in Taiwan, the government hopes to attract eighteen
biotech investments, each exceeding NTD 500 million by 2010.

The Development Center for Biotechnology (DCB), headed by Li Jui-Lien,
will be responsible for four of the eighteen investments. The
multidisciplinary center will collaborate with local and international
companies to help set up joint ventures in the field of biotechnology.
The DCB's BioFronts program will attempt to bring the international and
local research communities together to develop technology that can be
made available to domestic companies. The program also aims to link
partners to move products from the research and development (R&D) phase
to the market.

According to Chen Chao-Yih, Director General of the MOEA's Industrial
Development Bureau, Taiwan is an ideal place to invest in because it is
the gateway to Mainland China and the Asia-Pacific. Taiwan also possesses
solid biotech R&D capabilities as well as a wide range of medical
services and resources. Taiwan's successful experience in the field of
electronics and information technology (IT) also makes the island very
suitable for the production of medical devices.

"Because we are so strong and so successful in the IT and electronics
area, we can try to apply the IT technologies to the medical devices and
produce new products, huge opportunities, and huge potential," said Chen.

To attract investors, the government has offered many incentives for
investment in biotechnology in Taiwan. Investors can receive tax
deductions and even exemptions depending on the field of biotechnology in
which the investors invest. Investors can also receive low interest loans
along with rent discount programs. The government provides several R&D
assistance programs that support technology development as well.

Despite having experienced personnel in the field of biotechnology, Li
believes that there is a lack of management and infrastructure in Taiwan.
Policies and incentives that meet the needs for developing the biotech
industry must be set up, and the needs of the industry must also be
understood in order to increase distribution efficiency. In order to
maintain Taiwan's competitiveness in the Asian region, alliances must
continuously be formed with international organizations and the different
aspects of biotechnology production must be streamlined.


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