Global Dose: Focus on South Korea

June 21, 2021
One of East Asia's biotech hubs aims for speedy growth

The scenes from South Korea early in the COVID-19 pandemic stood in stark contrast to much of the world. While other countries struggled to get their public health infrastructure up and running, Korea quickly streamlined its approach to testing and isolating new cases, ultimately creating a model response for how to contain a viral outbreak.

Korean drugmakers were also quickly off to the races, developing their own vaccines to combat the pandemic. To date, at least five Korean companies have vaccines in trials and the country is aiming to reach herd immunity with the help of their own candidates by November.

The rapid and efficient response to the pandemic in Korea comes as no surprise. Fast-moving innovation has been the name of the game in several Korean health industries, including pharma, for a number of years. Now, the country’s drug industry is continuing a period of high growth while working to prop up one of the biggest pharma biotech hubs in the world.

Part of what has fueled that growth is an emphasis on drug R&D investments that has helped carry a number of new, high-selling biosimilars to the global market.

“Korea has recognized the pharmaceutical industry as a future growth engine, and since 2013, the government has established and is promoting a comprehensive five-year plan to foster the industry,” says Soonmahn Park, chief representative of the Korea Health Industry Development Institute (KHIDI), U.S. office. “Also, they are supporting innovative pharmaceutical companies with R&D capabilities and global market entry.”

With increased government backing and coronavirus-related deals ramping up, Korea’s pharma manufacturing landscape is pushing ahead with its rapid transformation.

The big picture

In 2020, South Korea’s pharma market was valued at $20.9 billion according to KHIDI. And for the last five years, the industry has been undergoing a major growth spurt. All told, the industry has expanded by 5.4% on average year over year — a rate that government data has shown was about three times faster than Korea’s overall manufacturing sector between 2014-2019.

Finished drug products dominate the country’s pharma industry, accounting for about 90% of what it produces. Exports have also been one of the highest-growing segments of the market, hitting an all-time high of $5.2 billion in 2019 while swelling by an average 15.2% each year since 2015.

Biosimilars, in particular, have lit a fire under the country’s industry.

In 2013, Celltrion, which is headquartered in Incheon, became the first company to develop a monoclonal antibody (mAb) biosimilar approved by the European Medicines Agency (EMA). Called Remsima, the biosimilar for Johnson & Johnson’s autoimmune blockbuster Remicade was approved by the U.S. Food and Drug Administration in 2016 and reached record sales of $244 million in the first three quarters of 2020.

Celltrion has since ushered two other biosimilars to the global market including Truxima (a biosimilar to Roche’s cancer and autoimmune therapy Rituxan), which has now captured 45% of the market share in five EU countries, according to KHIDI.

Korea-based Samsung Bioepis (a tie-up between Samsung Biologics and Biogen) is the country’s other big player on the biosims market and together, the two companies have developed nine biosimilar products that have won global approvals.

Investment injections

With Korean drugmakers proving their mettle on the global market, investments have poured in from within the country as well as from foreign players.

In 2019, the country launched an ambitious $1.7 billion five-year plan aimed at boosting R&D and commercialization efforts in medical biotech sectors. The ultimate endgame is to help the country’s medical device and pharma industry capture 6% of the global market by 2030 and reach $50 billion in exports.

As part of the plan, the government has included measures that will help prevent companies with cutting-edge tech from going belly up.

“It is an important part in the development of the Korean pharmaceutical industry to ensure that innovative bio-startups, the basis of the pharmaceutical industry ecosystem, can be continuously established and grown,” Park explains. “Therefore, various support policies such as R&D support, open innovation opportunities, and customized consulting for each stage of growth are being implemented. In addition, we are operating a technology special case and special growth rate system for listing on the KOSDAQ so that bio-companies with innovative technologies can enter and grow efficiently in the capital market.”

Private investments fueled by COVID-related deals have also kicked the industry into high gear.

Korea-based SK Bioscience, a contract manufacturer, has been pegged to produce two COVID-19 vaccines — one from Novavax and the other from AstraZeneca — and will manufacture the shots for the global and local market. The major vaccine deal won over investors who submitted a record amount of retail bids during the company’s $1.33 billion IPO last March that sent its shares soaring by 160%.

After its successful IPO — the biggest domestic listing since game-maker Netmarble Corp. raised $2.39 billion in 2007 — SK Bioscience reported that it would use the cash infusion on R&D and to grow its manufacturing capacity for a number of products in its pipeline, including a next-gen pneumococcal vaccine.

Manufacturing mecca

According to data from the Korean Ministry of Food and Drug Safety (MFDS), there were about 350 facilities in Korea producing finished drug products in 2019.

Most of the country’s pharma manufacturing facilities operate in three provinces, the biggest of which is Gyoenggi, which is home to half of Korea’s 21 FDA- and/or EMA-approved sites. Incheon, a bustling transport hub that borders the capital of Seoul, is also located in the Gyoenggi province and is poised to play a starring role in the country’s ambitions for biopharma expansion.

In 2019, the Incheon Metropolitan City government announced plans to expand its Songdo Global Biotech Cluster, already a sprawling site with 60 different companies and institutions, into a “world-level global biotech hub.” Under the plan, the government hopes to expand the Songdo Cluster to encompass an area of 2,381,000 square meters (~7.8 million square feet) with capacity for 560,000 liters of biopharma products by 2030.

Celltrion and Samsung Bioepis already operate facilities in the Songdo Cluster and their presence has played a role in attracting further investments from global companies. In November, German-based Sartorius announced that it will pump $100 million into a new manufacturing facility in the Songdo Cluster for biologics materials. Both Celltrion and Samsung have been major clients of Sartorius and the company cited these partnerships as a main driver in its decision to invest in Asian manufacturing.

If the Songdo Cluster reaches its target capacity, it would have twice the annual capacity of Singapore and a “higher production capacity than the world’s leading bioclusters,” Park says.

Regulatory backing

The industry has also recently been boosted by streamlined regulations. In 2020, the “Advanced Regenerative Bio Act” was implemented to support innovation in biopharma.

“The Act is a law that relaxes screening criteria when certain requirements are met when researching regenerative medicine,” Park says. “’Priority screening’ [was created] to first review innovative biopharmaceuticals for diseases without a treatment, [and] ‘customized screening’ [is to] conduct preliminary screening by receiving approval data in advance according to the schedule of the developer.”

Park says that the new law also offers “conditional authorization,” which allows companies to market their product in phase 2 of development with the condition of conducting phase 3 clinical trials.

According to Park, the first Korea-U.S. summit after President Biden took office also established a “global comprehensive partnership for vaccines that combines the advanced technologies of the U.S. with Korea’s production capabilities.”

“Accordingly, vaccine production in Korea will be greatly improved both in terms of quantity and quality,” Park says.

With government support, the manufacturing sector has been boosted by an emphasis on supporting the adoption of advanced production technologies.

“The Korean government is promoting technology convergence by carrying out related R&D projects and manpower training projects so that AI technologies can be actively applied in the pharmaceutical industry,” Park says.

Regulators have also made strides to streamline the process for launching a clinical trial in Korea. According to Novotech, a global contract research organization, the MFDS has established a goal of responding to trial applications within 30 days of submission. The emphasis on speed has helped shrink the average time frame for starting a clinical trial in Korea to about 152 days — compared to a global average of about 240 days.

Korea’s densely populated urban areas — and thus, easy access to a large patient population — has also helped the country become a hotbed of pharma research.

Of course, the industry is bound to take a few stumbles on its race to expand. Having enough workers to fill open positions remains a leading concern among pharma companies.

To help fill the talent gap, Park says that the country is leveraging the National Institute for Bioprocessing Research & Training (NIBRT), which is based in Ireland.

“The government is pushing ahead with the introduction of the NIBRT system, an educational program for bio-producers, to cultivate biopharmaceutical production professionals,” Park says.

In partnership with GE Healthcare, NIBRT courses are slated to be offered in Korea, China, the U.S., Singapore and more.

Korea also eased immigration policies in 2019 to open the door for more pharma pros.

“To keep our economy more competitive, we need to attract talent from all over the world,” said Yuh Pok-keun, head of the country’s Nationality and Integration Policy.

Put together, the measures represent an intense focus on setting the stage for continuing pharma growth in the country.

Korea’s president, Moon Jae-in, has summed up the country’s commitment to investing in pharma saying: “Our government will foster the biotechnology and pharmaceutical sectors as the country’s new economic growth driver, aiming to triple the export and the global market share of pharmaceutical products and medical instruments by 2030.” 

About the Author

Meagan Parrish | Senior Editor