BioWorld International Correspondent

SAN FRANCISCO - Delegations from more than 60 countries gathered here this week at the BIO 2004 International Convention, vying for investment and promising to create the most favorable regulatory and fiscal regimes for biotechnology.

Government ministers from the UK, Germany, India, Malaysia, Australia, Thailand and New Zealand laid out their wares at the international plenary session on Sunday, while 12 countries later made detailed presentations of their national policies for promoting biosciences.

Opening the plenary session, Gunther Winkler, vice president of strategy at Biogen Idec Inc., told the ministerial speakers, "If you want to attract biotechnology and make biotechnology a flourishing industry, you have to provide the foundations for it."

That means providing proper protection of intellectual property and ensuring there is adequate reimbursement for biotechnology companies to get a return on investment. "Outside the U.S. the trend is against this," Winkler said.

Ian Macfarlane, minister for industry, tourism and resources in Australia, claimed the country has one of the most efficient and transparent regulatory regimes, with strong IP protection and an efficient system for clinical trials.

Biotechnology companies will be core recipients of Australia's second National Innovation Fund of $3.7 billion, announced last month, and the government is doubling its investment in the Australian National Stem Cell Research Center, putting in a further $38 million.

In addition, there is a world competitive tax regime for non-national investors, and the government has set up a pharmaceutical partnership program to encourage multinational R&D companies to partner with start-ups in Australia.

"Biotechnology has unprecedented government support," Macfarlane said.

From a late start Germany has fast-forwarded in the past two years to become a leading biotechnology location, said Georg Wilhelm Adamowitsch, state secretary, Federal Ministry of Economics and Labor. "We are at the heart of Europe, with efficient infrastructure and strong research.

"Germany now has 350 biotechnology companies, more than any other country in Europe," Adamowitsch said. "Our companies are still too young, but the product pipeline has grown in the past year." The first product from a German company was approved recently.

Adamowitsch acknowledged also that German companies face a difficult situation in the capital markets and in raising venture capital. "However, I can see light at the end of the tunnel. Funding for biotechnology is expanding all around the world and German companies are increasingly attracting the attention of venture capitalists, and valuations are going up."

Biotechnology is the future, but the industry has yet to produce commercial returns, noted Jamaludin Jarjis, minister for science, technology and innovation in Malaysia. To promote biotechnology Malaysia is developing a strategy to lower the risk for investors by taking R&D off the normal profit-and-loss account and moving it to another part of the balance sheet. The government also is strengthening intellectual property rights to further mitigate risk.

Jarjis noted there is international competition to attract capital and also for talent. "We are creating centers to attract the best talent and we will do so in biotechnology as we have done in [information technology]."

The Indian government, too, is giving biotechnology pride of place, aiming to emulate the success it has had in creating a thriving IT services sector, Maharaj Krishnan Bhan, secretary of the Department of Biotechnology, Ministry of Science and Technology, told delegates.

As evidence of its commitment, Bhan noted that India's prime minister recently spent eight hours chairing a nanotechnology conference. "There is an abundant belief in the Indian government that biotechnology holds the key to health and wealth," Bhan said.

While India does have a shortage of some resources, it also has some significant strengths. For example, it recently created eight new biotechnology research centers. Such investment is linked to attitudinal changes. "The Indian government is heavily supportive of private-public partnerships, having never spent any money on private research in the past," he said.

The country has set up commissions to deal with two key shortcomings: the Indian regulatory framework governing clinical trials and poor IP protection. "We have identified weaknesses in the system and we have simplified policy consistent with what is happening globally," Bhan said. "From 2005 the regulatory framework will be as good as anywhere else in the world."

On intellectual property protection, Bhan promised, "We will strengthen it next year and a government commission will look at how to enforce it."

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