1. Current Status of Korean Bioindustry and Suggestions for Korea-Australia Bilateral Cooperation Current Status of Korean Bioindustry and Suggestions for Korea-Australia Bilateral Cooperation Nov. 2004 Nov. 2004 Young-Hoon Park Young-Hoon Park CJ Corp. CJ Corp.

2. AGENDA I. Introduction I. Introduction II. Driving Forces for Korean Bioindustry II. Driving Forces for Korean Bioindustry III. Current Status of Bioindustry in Korea III. Current Status of Bioindustry in Korea IV. Suggestions for Korea-Australia IV. Suggestions for Korea-Australia Bilateral Cooperation in Biotechnology Bilateral Cooperation in Biotechnology V. Conclusion V. Conclusion

3. I. Introduction - Public Initiatives to promote Biotechnology in Korea Korea has traditionally sound basis for biotechnology development. ( strong fermentation industry) Korea has traditionally sound basis for biotechnology development. ( strong fermentation industry) Korean Government has developed strategic plans to foster competitiveness of bioindustry and biotechnology R&D capability since early 1980s. Korean Government has developed strategic plans to foster competitiveness of bioindustry and biotechnology R&D capability since early 1980s. –Biotechnology Promotion Law (1983) –National Biotech R&D Programs - HAN Projects (‘92 - 2001) - Biotech 2000 Program (‘94 - 2007) –Third phase of Biotech 2000 Program (‘02-’07) is currently being carried out.

4. Strategic Plans for Biotechnology Promotion (1) Strategic Plans for Biotechnology Promotion (1) zHAN Projects (‘92 - 2001) - New functional biomaterials BACKGROUND BACKGROUND - national demand was recognized to strengthen international competitiveness of Korean bioindustry IMPLEMENTATION STRATEGY IMPLEMENTATION STRATEGY - A biotechnology promotion program to attract industrial investment. - Public matching fund to industrial participation - Public R&D infrastructure was significantly fortified. (structural biology, microbial screening, etc.) (structural biology, microbial screening, etc.) INVESTMENT (’92~’01) INVESTMENT (’92~’01) - Public sector 199.2B Won + Private sector 186.8B Won - Public sector 199.2B Won + Private sector 186.8B Won

5. Strategic Plans for Biotechnology Promotion (2) Strategic Plans for Biotechnology Promotion (2) zBiotech 2000 Program (‘94 - 2007)  BACKGROUND - Need for an interministrial coordination of government biotechnology promotion programs - need for redirection of national Biotech R&D - aims to strengthen fundamental research capability of life science  INVESTMENT - Total 16,092 Billion Won (~US $14B) for 14 years (Public sector 6,413 B Won + Private sector 9,679B Won) (Public sector 6,413 B Won + Private sector 9,679B Won) (US$5.6B) (US$8.4B) (US$5.6B) (US$8.4B)

6.  BASIC DIRECTIONS - to promote fundamental research in biotechnology and to attract investment from private sectors through the development of advanced technology on the strong basis of conventional biotechnology - to accelerate diffusion of the public consensus for ESST - to realize the importance of bioresources and strategic support for biodiversity conservation  STRATEGIC APPROACHES - to level up the basic life science capabilities - post genomic researches are stressed - Accelerate the commercialization of R&D outputs z Biotech 2000 Program (‘94 - 2007)

7. 199419982000 2003 AGR 30% Increase US$97M US$214M US$473M US$47M Biotech 2000 Program R&D Supports from Public Sector FY2003 US$473M

8. II. Driving Forces for Korean Bioindustry (1)Activities in Academia  Biotechnology-related Departments were set up in around 40 Universities  Biotechnology-related Departments were set up in around 40 Universities  College of Science 60%, College of Agriculture 25%, College of Engineering 15%  College of Science 60%, College of Agriculture 25%, College of Engineering 15%  30 University-associated Research Institutes on the Genetic Engineering were established  30 University-associated Research Institutes on the Genetic Engineering were established  Institute of Molecular Biology and Genetics, Seoul National University, etc.  Institute of Molecular Biology and Genetics, Seoul National University, etc.  Science Research Center (SRC) & Engineering Research Center(ERC)  Science Research Center (SRC) & Engineering Research Center(ERC)  Over 20 Centers in Biotechnology Area in the Universities  Over 20 Centers in Biotechnology Area in the Universities  Seoul National University, Korea University, Hanyang University, etc.  Seoul National University, Korea University, Hanyang University, etc.  Biotechnology-related Societies  Biotechnology-related Societies  Korean Society for Biotechnology and Bioengineering(KSBB)  Korean Society for Biotechnology and Bioengineering(KSBB)  Korean Institute of Chemical Engineering / Division of Biochemical Engineering, etc.  Korean Institute of Chemical Engineering / Division of Biochemical Engineering, etc.

9. (2)Research Institutes  Biotechnology-dedicated Research Institutes  The only government-supported research institute established in 1985  dedicated to biotechnology research Korea Research Institute of Bioscience and Biotechnology(KRIBB)  A Private Research Institutes established in 1984  Focus on the R&Ds in the field of Biopharmaceuticals MOGAM Biotechnology Institute  A private life-science research complex established in 2003 POSTECH Biotech Center

10.  Biotechnology-related Research Institutes  Korea Institute of Science and Technology(KIST)  Korea Tomorrow & Good Research Institute(KTGRI)  Korea Food Research Institute(KFRI)  Korea Institute of Toxicology(KIT)  Korea Biotechnology Commercialization Center(KBCC)  Korea Institute of Energy Research(KIER)  Korea Ocean Research & Development Institute(KORDI)  Agency for Technology and Standards(ATS)  National Institute of Health(NIH)  National Institute of Environmental Research(NIER)  National Institute of Agricultural Science and Technology(NIAST)  Korea Forest Research Institute(KFRI)  National Veterinary Research and Quarantine Service(NVRQS)  National Fisheries Research and Development Institute(NFRDI)  National Institute of Scientific Investigation(NISI) Government-donated Research Institutes National and Public Research Institutes

11.  Korean Collection for Type Cultures(KCTC)  Korean Culture Center of Microorganisms(KCCM)  Korean Cell Line Research Foundation Microorganism Depository Organizations  Asan Institute for Life Science  Samsumg Bioscience Research Institute Private Research Institutes  Korea Institute of Science and Technology Information(KISTI)  Agriculture and Life Science Research Center, Seoul National University  Biological Research Information Center(BRIC), Pohang University Research Institutes on Bioinformatics  Others

12.  Biotechnology Innovation Center, Chuncheon  Bio Venture Center, Daejeon  Center for Biotechnology and Bioventure, Jeonbuk  Bio21 Center, Kyungnam  Biotechnology Industrialization Center, Dongshin University  Biotechnology Innovation Center, Youngdong University  Technology Innovation Center, Sangju National University  Bioindustry Development Center, Jeju  Marine Biotechnology Center for Functional Material Industry, Busan  Bio Venture Town, Daejeon  Bio Venture Plaza, Chuncheon  Institute for Marine Bioindustry, Gangneung  Biotechnology Center for Bioindustry, Jeonnam  Biotechnology Research Center, Jeonnam  Biohealth Industry Support Center, Kyungbuk  Bioscience Park, Jeju  Traditional Pharmaceutical R&D Center, Chungbuk  Animal Resources Support Center, Chungnam  Healthcare Industry Center, Chungbuk  Marinebio Enviromental Industry Center, Kyungbuk  Biomaterial Industrialization Center, Daegu  Herb Medicine Support Center, Daegu  Bio Venture Plaza, Kyungnam  Bio-Industry Support Center, Busan Regional BioBusiness Promotion center(15) Bio Venture Center(9 ) (3) Biocluster

13.  Industry Organizations  Industrial Organization affiliated to Ministry of Commerce, Industry and Energy(MOCIE) established in 1991  Main Activities - Promotion of Bioindustry - International Cooperation in Bioindustry  Member Companies : 64 Companies (50 with R&D Capabilities)  Research Association established as an affiliated Organization of MOST in 1982  Bioventure Organization established as an affiliated one of Ministry of Commerce, Industry and Energy(MOCIE) in 2000 Bioindustry Association of Korea(BAK) The Korea Biotechnology Research Association(KBRA) Korea Bio Venture Association(KOBIOVEN)

14.  Types of Companies  FY 2002  No. of Companies : 556  No. of R&D Companies : 493  No. of Sales Companies : 128 Types of CompaniesNo. of Companies Companies focusing on only R&D 148 Companies working on both R&D and Sales of Domestic Bio-products 345 Companies Selling the Imported Bio-products only 63 Companies Selling both the Domestic and Imported Bio-products 65 Types of Bioindustry Companies in 2002  FY2003  No. of Companies in Bioindustry : About 650 1. Category of Companies III. Current Status of Bioindustry in Korea Source : Bioindustry Association of Korea(BAK), 2003

15. Biopharma Biochemicals BioFood BioEnvironment BioEnergy Bioelectronics Bioprocess Bioinformatics Fields of Bioindustry No. of Companies Distribution of Korean Bioindustry 171 67 112 63 49 12 49 33

16.  Size distributions Large Size Group Large Size Group  Above 30 Companies  LGLS, CJ, Daesang, TS Corporation, etc.  Operating the fully Integrated System on R&D, Production, Marketing  Above 30 Companies  LGLS, CJ, Daesang, TS Corporation, etc.  Operating the fully Integrated System on R&D, Production, Marketing Mid- Size Group Mid- Size Group  Above 70 Companies  Dong-A Pharm., Chong Kun Dang, Green Cross, Daewoong, etc.  Focused on the Competitive Core Products  Above 70 Companies  Dong-A Pharm., Chong Kun Dang, Green Cross, Daewoong, etc.  Focused on the Competitive Core Products Small Size & Venture Group Small Size & Venture Group  Above 500 Companies  Dong Kook Pharm., Bioneer, Macrogen, KoBioTech, etc.  Individually concentrated on the Niche Fields of R&D, Production and Marketing  Above 500 Companies  Dong Kook Pharm., Bioneer, Macrogen, KoBioTech, etc.  Individually concentrated on the Niche Fields of R&D, Production and Marketing

17. 2. Manpower  FY2002  Total : 8,707  R&D Area : 5,082(58%)  Manufacturing Area : 3,625(42%)  FY2003 : About 10,000 Manpower of Bioindustry in 2002 Ph.D.M.S.B.S.TechnicianTotal R&D 9942,4291,206 4535,082 Manufacturing 19 3441,0882,1743,625 Total1,0132,7732,2942,6278,707 Source : Bioindustry Association of Korea(BAK), 2003

18. 3. Market Size  FY2002 : US$ 1.14 Billion  Biopharmaceuticals 43%, Non-biopharmaceuticals 57%  Domestic Products 68%, Imported Products 32%  FY 2003 : About US$ 1.4 Billion AreaDomestic ProductsImported Products Biopharmaceuticals Biofoods Biochemicals Bioenvironments Bioenergy ＆ Resources Bioprocess & Bioequipment Bioelectronics & Bioinformatics 336M 100 77 66 87 36 76 155M 4 36 1 17 141 5 Total (US$) 778M 359M 1.14B Bioindustry Market Size in 2002 (Unit : US$ million) Source : Bioindustry Association of Korea(BAK), 2003

19.  Human Growth Hormone  Vaccines : Hepatitis B Vaccine, etc.  α-Interferon, γ-Interferon  Antibiotics : 7-ACA, etc.  Diagnostic Kits  Amino Acids :L- Lysine, L-Threonine, etc.  Oligosaccharides  Microbial Agents  Insulin  Human Growth Hormone  α-Interferon, β-Interferon  Vaccines : Influenza, etc.  Erythropoietin  Diagnostic Kits  Equipments : Bioprocess, etc.  Industrial Enzymes  Examples of Domestic Products  Examples of Imported Products 4. Example of Bio-products

20. Biotech Investment plan Company Samsung SK LGLS Daesang Green Cross ISU Chemical DooSan CJ US$ 155 million by 2004 US$ 230 million by 2005 US$ 100 million by 2005 US$ 115 million by 2006 US$ 77 million by 2004 US$ 32 million in 2001, domestic and oversea investment US$ 85 million to Biotech, 30 million to Biotech Ventures US$ 230 million by 2004 Investment Plan by Major Corporates 5. Investment Plan by Major Corporates

21. IV.Suggestions for Korea-Australia Bilateral Cooperation in Biotechnology (Joint Development / Licensing ) Red Biotech(Health-care related) R&Ds and products Red Biotech(Health-care related) R&Ds and products èRecombinant therapeutic proteins (Influenza vaccine, therapeutic antibodies, etc.) and novel DDS technology èAnticancer drugs èScreening of novel bioactive substances from natural resources and international standardization èStem cell technology & application products White Biotech(Biofine chemicals related) R&Ds and products White Biotech(Biofine chemicals related) R&Ds and products  Metabolic pathway engineering of industrial microorganisms è Bioconversion process engineering Green Biotech(Agricultural biotech related) R&Ds and products Green Biotech(Agricultural biotech related) R&Ds and products èTransgenic animals and plants èPlant biotechnology (ex. Metabolomics study using genome model plants, rice or arabidopsis) (ex. Metabolomics study using genome model plants, rice or arabidopsis) Environmental biotechnology related R&Ds Environmental biotechnology related R&Ds èBioremediation technology

22. Korea-Australia Bilateral Cooperation in Biotechnology R&D Infrastructure Gene bank program Gene bank program - Identification, preservation and exchange of microbial - Identification, preservation and exchange of microbial strains and their genetic sources strains and their genetic sources - Exchange of related data bases - Exchange of related data bases  Preclinical and Clinical trial program Natural Products Screening program Natural Products Screening program - Exchange of experts and collaboration through - Exchange of experts and collaboration through joint research projects joint research projects - Training opportunities for screening specialists - Training opportunities for screening specialists Exchange of biotechnology information data bases Exchange of biotechnology information data bases

23. V. Conclusion Korean bioindustry needs international cooperation for its growth and more efficient globalization. Korean bioindustry needs international cooperation for its growth and more efficient globalization. There are great deal of opportunity for bilateral cooperation in biotechnology between Korea and Australia. There are great deal of opportunity for bilateral cooperation in biotechnology between Korea and Australia. It is thus suggested; It is thus suggested; èto form "Korea-Australia Joint Biotechnology Forum" and hold regular meetings.  It may be good to establish a joint cooperative fund to support the exchange of scientists and joint cooperative research projects.

24. Thank you for your attention…. Thank you for your attention….