"Need to Foster an Ecosystem for M&A Activation to Boost Domestic Bio Industry Growth"

'Drawing the Present and Future of the Korean Bio Industry' BIX 2022 Keynote Session

On the 3rd, visitors are touring the exhibition at 'BioPlus-InterPhex Korea 2022' held at COEX in Gangnam-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Lee Gwan-ju] Opinions have emerged that an ecosystem enabling active mergers and acquisitions (M&A) is necessary for fostering and securing the future of the domestic bioindustry.

Hwang Man-soon, CEO of Korea Investment Partners, cited the expansion of M&A as one of the key tasks for the future of the Korean bioindustry during the keynote session of 'BioPlus-Interphex Korea 2022 (BIX 2022)', which opened on the 3rd at COEX in Seoul.

CEO Hwang assessed, "The cumulative number of domestic bio companies is about 3,000. Startups are occurring every year, and remarkable growth has been achieved in global contract manufacturing organization (CMO) capabilities, trillion-won sales of diagnostic kits, and the therapeutic sector."

He then suggested measures for continuous growth of the bioindustry, including ▲activation of the KOSDAQ market ▲support for high value-added patents ▲expansion of the industrial talent pool. He emphasized inducing a virtuous cycle of funding and industrial growth through temporary short-selling restrictions and the need for qualitative growth of patents.

CEO Hwang particularly mentioned the necessity of long-term tax support to expand M&A. He pointed out, "The reason why there are not many M&A cases among domestic big pharma is due to environmental factors," adding, "Because they want to pass it on to their children." He further stated, "Tax support to prevent dilution of shares upon inheritance and establishment of a board-centered governance structure are necessary."

Lee Jung-kyu, CEO of Bridge Biotherapeutics, also emphasized M&A as an important keyword for the bioindustry’s development over the next decade. Lee said, "There are too many startups and companies are very fragmented by sector," adding, "If you ask whether the potential has global competitiveness in size, today's answer is 'No'." He especially stressed, "Passing biotech companies to children is 'old-fashioned.' The concept of management rights centered on shareholding ratios must be revolutionized."

Choi Yoon-hee, Senior Research Fellow at the Korea Institute for Industrial Economics & Trade, who appeared as the last presenter in the keynote session, proposed a private-sector-centered growth strategy for the bioindustry. Choi said, "There are many startups, but the question is whether they are high-quality startups and whether they can grow into mid-sized companies," adding, "An exit strategy for companies is needed, and an environment where companies can grow centered on M&A must be created."

The need for efficiency in policy aspects was also raised. Choi stated, "When evaluating policy efficiency, Korea is at a mid-level," and suggested, "Research and development policies have been supply-driven, but now market policies need to be balanced."

This keynote session was organized under the theme ‘Drawing the Present and Future of the Korean Bioindustry 2022’ to highlight the necessary ecosystem changes for the success of the Korean bioindustry from three perspectives: investment, companies, and policy.

Meanwhile, BIX 2022 will be held over three days until the 5th. On the second day, the 4th, sessions on contract development and manufacturing organization (CDMO) business expansion strategies are scheduled, and on the last day, various sessions including gene-editing technology will take place.

This content was produced with the assistance of AI translation services.