By 2020, biotechnology could be making a 5 per cent contribution to gross domestic product

National biotech plan is starting to pull in foreign investment
BiotechCorp forecasts up to RM3 billion (£468 million) of new local and foreign investment by the end of the year

Spearheading the drive to develop the biotechnology sector is the Malaysia Biotechnology Corporation, or BiotechCorp, headed by Iskandar Mizal Mahmood. He predicts that Malaysia will become increasingly attractive to foreign investors, as the country develops into a diversified biotechnology hub. Encouraged by investor interest, by the end of this year he expects to see up to RM3 billion (£468 million) worth of new investment from local and overseas companies. “We are focusing on getting the environment right to reward investors and entrepreneurs,” he says.

Mr Iskandar’s target for 2010 under the National Biotechnology Plan is to get investment up to RM6 billion (£935 million) and the industry contributing 2.5 per cent to national economic growth. By 2020, it is intended that biotechnology’s contribution to gross domestic product will be 5 per cent and that Malaysia will be a force in the global biotechnology market. The creation of 100 new technology companies is envisaged together with 280,000 jobs.

Giving a progress report recently, Mr Iskandar said market capitalisation of biotechnology and biotech-related healthcare companies listed on the Malaysian stock exchange stood at more than RM3 billion (£467 million). Investment in new biotech companies, including direct foreign investment, was close to RM1 billion (£155 million). He promised “a continued push for maintaining sustainable investment” and an environment that would reward investors and entrepreneurs.

Surprisingly, given its unique advantages, Malaysia has started developing its biotechnology sector relatively late compared to other nations such as India, China and Singapore but it is making up ground fast. From a zero base in 2004, it now has 123 biotechnology and related companies.

At the BIO International Convention, one of the world’s biggest biotechnology events held in Boston last May, Malaysia was the third largest international participant, after the United States and Canada, fielding 14 exhibitors and 320 delegates led by the Deputy Prime Minister, Najib Tun Razak.

Malaysian firms signed a record 11 memoranda of understanding (MoUs) at the event including pacts with leading Indian companies Manipal Education and Medical Group (MEMG) and Avestha Gengraine Technologies, and with Twin Rivers Technologies, one of the largest and fastest growing oleochemical producers in the United States. Since then, MEMG has established a stem cell research centre at Technology Park Malaysia, Kuala Lumpur, in which it proposes to invest up to RM30 million (£4.6 million) over the next three to four years.

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Jamaludin Jarjis, Minister for Science, Technology and Innovation, says Malaysia has much to offer as an investment destination and this has been noticed. “There is flourishing interest from the West on outsourcing of the biotechnology sector to Asia. Malaysia is strategically located in Asia and we will make use of the interest to woo those involved to our country.”

The government is keen to see partnerships with established pharmaceutical companies in bio-pharmaceuticals such as diagnostic tools and vaccines for tropical diseases. To attract foreign companies to invest, Malaysia is offering incentives, such as tax breaks and matching grants, to help support R&D and commercialisation activities. BiotechCorp acts as a one-stop-centre, providing support, facilitation and advisory services for firms that are keen to establish their presence in the country.

The National Biotechnology Plan places the emphasis on research, development and commercialisation, acquisition of technology, innovation, entrepreneurship and infrastructure. Central to it is the creation of a network of centres of excellence around the country, known as BioNexus Malaysia. This comprises the best institutions that Malaysia has to offer in biotechnology and life sciences, and leverages on existing infrastructure, including leading universities and research institutions.

BioNexus status is awarded by the Science, Technology and Innovation Ministry and brings privileges and incentives, including 100 per cent income tax exemption for a period of up to 10 years. At present there are around 40 companies with this status. MEMG, the Indian company setting up the research centre, is the first international firm to be so designated.

The 2008 budget allocated RM236 million (£36.8 million) for biotechnology development. Among other things, the allocation will be used to fund the acquisition of technology, development of a biodiversity research centre and a biotechnology commercialisation centre, and cancer research.

To encourage co-operation between biotechnology companies and local universities, it was announced that BioNexus-status companies will be allowed to make use of the laboratories and research facilities at the universities. Revenues from any new commercialised technology are to be shared with participating scientists and researchers.