Government "Leap to 5 Major Bio Venture Powers"... Expansion of Venture Capital Supply

Announcement of 'Pharmaceutical Bio Venture Innovation Ecosystem Creation Plan'
Establishment of a consultative body with the Ministry of Health and Welfare and others to develop scale-up strategies

The government will continuously expand the supply of venture capital and funding for new drug development to leap forward as one of the top five bio venture powerhouse countries.

On the 15th, the Ministry of SMEs and Startups announced the “Pharmaceutical Bio Venture Innovation Ecosystem Creation Plan” at the ‘Ministerial Meeting on National Issues and Economic Affairs & Ministerial Meeting on Industrial Competitiveness Enhancement’ held at the Government Seoul Office. Under the vision of becoming a “Top 5 Global Bio Venture Powerhouse,” the plan sets goals to nurture “at least three pharmaceutical bio unicorns” and achieve “over 30 trillion KRW in bio venture technology exports by 2027.”

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First, the Ministry of SMEs and Startups will increase the supply of venture capital for bio ventures to lay the foundation for the bio venture investment environment. A new venture fund focusing on pre-clinical stage investments will be created to serve as seed money for early-stage venture funds. The investment size per case will be between 1 billion and 2 billion KRW, and linkage with the ‘K-Bio·Vaccine Fund’ will be strengthened to enable continuous growth through follow-up investments.

A new fund will also be launched to promote strategic collaboration between domestic bio ventures and domestic and international pharmaceutical bio companies. This will include a fund of approximately 16 billion KRW jointly participated by 14 domestic pharmaceutical companies and a fund of about 30 to 40 billion KRW involving Japanese bio-related companies. The Korea Fund of Funds will provide incentives such as first-loss coverage and excess profit transfer to reduce the risk of private capital losses and enhance returns, encouraging bold investments from domestic and foreign pharmaceutical companies.

The Ministry of SMEs and Startups will form a consultative body with the Ministry of Health and Welfare (clinical cooperation) and the Ministry of Science and ICT (research and development) to establish a bio venture scale-up strategy. This aims to maximize the growth capabilities of bio ventures and improve the efficiency of financial support. Additionally, to foster specialized bio venture capital (VC), VCs with expertise and corporate support capabilities will be designated as ‘K-Biotech Supporters.’ When Supporters make pre-investments of over 3 billion KRW in early-stage bio companies, a first-round matching investment will be made, and additional funds from the Korea Fund of Funds will be injected if necessary. If technology export succeeds, part of the government subsidy will be donated and pooled into a fund to be used as matching capital resources to support future bio ventures.

Furthermore, to move away from an industry structure centered on generic drugs and enable domestic innovative companies to create blockbuster new drugs, the K-Bio·Vaccine Fund will be continuously established. The first and second funds were jointly invested by the Ministry of Health and Welfare and national policy banks last year, with a final cumulative formation of 306.6 billion KRW. The Ministry of SMEs and Startups plans to form the third to fifth funds, each with a scale of 100 billion KRW, within this year and aims to raise 600 billion KRW by the end of the year. The already established K-Bio·Vaccine Fund will be guided to focus investments on key areas such as pharmaceuticals to directly contribute to innovation in the bio sector.

In addition, to promote qualitative growth in bio startups, support for corporate presentations (IR) education and customized consulting will be strengthened for pharmaceutical bio startups in regional and metropolitan areas, along with enhanced incubation and networking. Joint development of new drug pipelines based on division of labor will also be pursued by combining the technological capabilities of domestic bio ventures with the new drug development platforms of domestic pharmaceutical companies.

Oh Young-joo, Minister of SMEs and Startups, said, “Although Korea’s bio ventures have grown quantitatively and qualitatively thanks to world-class research and development (R&D) capabilities, the ecosystem where innovation actors are organically connected is currently insufficient. We will spare no effort to create a virtuous cycle ecosystem where bio ventures can smoothly transfer technology, accumulate knowledge and capital, and challenge new drug development.”

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