By TBY | Malaysia | Dec 10, 2015
Biotechnology was relatively undeveloped across South-East Asia until the early 2000s. Malaysia pioneered research in the field, and today excels as a regional leader in the sector.
In pursuit of the country’s goal to become a regional leader in biotechnology, in 2005 the government introduced the National Biotechnology Policy (NBP), an initiative in coordination with National Biotechnology Division (BIOTEK) under the Ministry of Science Technology and Innovation (MoSTI). This set out the key strategies and policy direction to drive this forward and create an ecosystem in which companies in the sector could flourish. On top of this, it included the development of a legislative and regulatory framework and of human resource capabilities. However, with high sunk costs acting as a barrier to entry, few regional competitors to emulate, as well as a time lag between technological breakthrough and profitability, the government was aware that Malaysian biotech start-ups were reliant on the government to kick-start their growth. With this in mind, the idea of a special agency solely dedicated to pushing forward the country’s biotechnology agenda was formulated. In 2005, the government established Biotech Corp to be act as a one-stop center for all matters related to biotechnology. Among its principle activities, the agency is in charge of granting “BioNexus Status” to eligible companies in the sector, in an effort to encourage more players to enter the industry.
BioNexus Status companies receive fiscal incentives such as tax breaks as well as other benefits including freedom to bring in foreign workers and source funds from abroad; access to shared laboratories and facilities; and assistance for international accreditation and standards. Since 2005, Biotech Corp has awarded BioNexus status companies to 225 companies in Malaysia, representing a total approved investment of $729 million. “[BioNexus status] made it easier to bring talent from our more experienced companies within Europe or Latin America,” said Jean Louis Couzet, Executive Chairman of Biotec International Asia, which uses its technology to generate biogas for tropical agro-based industries.
The various applications of biotechnology in Malaysia span across a range of sectors including pharmaceuticals, energy, agriculture, and even halal, where Malaysia can exploit its position as a global leader in certification of halal products and logistics. Revongen, which is part of the first batch of companies to receive BioNexus status in Malaysia, is using its technology to develop biomarkers to detect contamination from pork.
According to EL Law, Founder of Revongen, firms in the sector continue to rely on government support and struggle to access private funding for biotechnology activities, which are considered less tangible or riskier than other investments. “Unless a borrowing company can demonstrate a safe and monetizable product, banks are wary of extending credit to biotech firms.”
Yet while the government continues to provide funding assistance for biotechnology under 10th Malaysia Plan (10MP), the biggest challenge in recent years has been ensuring that R&D is commercialised. For this, MoSTI introduced the Commercialization Year initiative in 2014. “The objectives of the Commercialization Year included targeting at least 60 R&D generated products for commercialization every year; providing a comprehensive commercialization platform, and addressing issues such as low product commercialization uptake,” said Datuk Dr. Ewon Ebin, former Minister of Science, Technology and Innovation.
Looking ahead, Malaysia will need to work hard to stay ahead of its ASEAN neighbors that are catching up. Malaysia is also working to increase its share of investments into biotechnology, and has set out a goal of $1.14 billion from the US between 2016 and 2020.