Country Report: Taiwan - Pharmaceutical Executive


Country Report: Taiwan

Pharmaceutical Executive

George Yeh, President, Taiwan Liposome Company
Even when they reach the international stage with a high-barrier product, the future may be uncertain. Rongjin Lin believes, "After 2015, 'difficult' generics will become 'simple' generics again! So even here, Taiwan has only a very small window to compete." Recently, TTY has jumped to developing patented drugs, following a progression that started with medium-barrier generics in Taiwan, moved to high-barrier generics internationally, and will culminate with incremental innovation and then "truly" innovative products by 2020—the "only way for us to survive," says TTY's chairman.

Developing an innovative pipeline while pursuing shorter-term gains is a popular approach in Taiwan, especially given the cultural proclivity for safer bets that investors are only now shedding. For instance, Taiwan Advance Biopharmaceutical Inc. (TABP), founded in 2000 as the first DCB spin-off, laid a foundation with businesses like food testing. Today, it is on its way to transforming into a biopharmaceutical company.

Like its generics-focused peers, TABP takes a niche strategy. Wen-Lung Su, Chairman, explains, "Our strategy is based on collaboration rather than competition. Our development efforts are currently focused on oncology, and today, the global cancer drug market is worth tens of billions of USD. If all players in this field adopted a competitive policy, then the current market environment—wherein the large players make billions, and the small players make very little—will never change. On the other hand, if smaller companies shift their approach and collaborate to expand the market, to the scale of hundreds of billions of USD, then these partners can share the profits from a new and larger pie." True its strategy, TABP's lead drug candidate will look to complement, rather than compete with, an Amgen oncology drug.

Time to Celebrate for Taiwan Inc.?
For many Taiwanese drug developers, the right niche is to apply a unique technology platform to an acquire-and-develop model, with an eye toward generating 'me-better' compounds for Asia-prevalent diseases. Perhaps the most prominent champion of this approach is Taiwan Liposome Company (TLC), which completed an IPO on the GreTai last year.

George Yeh, the company's president, speaks of a 'vacuum area': "TLC's approach is based on creating value-added products. We do not look to develop first-in-class or best-in-class molecules. Instead, we innovate in areas like drug delivery. For example: can our delivery system turn a daily dosage drug into a weekly dosage drug?

"Such products typically will generate yearly global sales of 400-500 million USD, which I call the 'vacuum area.' At one end of the vacuum you have the top twenty companies, which are hunting for the next game changing, billion-plus blockbuster. At the other end you have small, localized generics companies looking to enter the market quickly, with products that can generate peak sales of 100-200* million USD. Due to their lack of technical expertise, the small generics players cannot enter the vacuum area; Big Pharma, on the other hand, isn't very interested in it. As such, this third, value-added approach comes in under the radar, and is perfectly tailored for emerging markets—notably China—that are looking for discounted innovation."

Other companies are using their unique technologies to establish a foundation in service provision that can help fuel the development of their own drugs. This is the route taken by EirGenix, as well as a Rongjin Lin's TTY invested company, Mycenax Biotech. Both have focused on the biopharmaceutical space.

"CDMO service provides us not only revenue, but also new opportunities," explains Karen Wen, Mycenax's president. "We hope to make long-term relationships with our clients. Later along the road, we hope that with some of them, we can launch shared investment projects, and plan a long pipeline together"—particularly in an area like biosimilars, where Taiwan hopes to establish a competitive edge. Mycenax's TuNEX, now in Phase III, should be Taiwan's first commercialized biosimilar.

When the pipeline is ready, the typical strategy for Taiwan's biotechs is to market or co-market in Taiwan and China, and out-license elsewhere. But some are bolder: TWi, for instance, which will start with generics but has long-term plans for innovation, plans to use its IPO capital to buy into a sales and marketing operation in the US.


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