UNTIL EARLY 2020 Seegene was a medium-sized South Korean purveyor of medical diagnostics with round $110m in annual gross sales. On January twenty seventh that 12 months Chun Jong-yoon, Seegene’s boss, and his counterparts at different biotechnology corporations have been summoned to an emergency assembly by the federal government. Officers requested if they might produce exams for a novel coronavirus which had been spreading quickly in Wuhan, China. Seegene’s take a look at package was given the go-ahead by regulators. When instances started spiking quickly afterwards in Daegu, in South Korea’s south-east, the corporate went into emergency mode. “We stopped all different actions and simply threw all the things we had at covid-19,” says Mr Chun.
Seegene’s staff labored across the clock, snatching a couple of hours of sleep in motels close to the workplace. Dozens extra have been employed in a single day. Inside weeks the agency was exporting thousands and thousands of take a look at kits to dozens of nations across the globe. It ended the 12 months with $1bn in gross sales and $440m in internet revenue. Different South Korean biotech corporations have had a equally good pandemic. 5 of the ten most beneficial firms within the KOSDAQ index of medium-sized corporations now come from the biotech sector, up from two on the finish of 2019. So do two out of the ten largest firms within the benchmark KOSPI index.
In addition to exams, they’ve been producing remedies and vaccines for covid-19. SK Bioscience began making the AstraZeneca jab this 12 months and in February signed a deal to make the Novavax one. The following month it raised $1.3bn in an preliminary public providing; its share worth shot up by 30% on the primary day of buying and selling, which it ended with a market capitalisation of practically $12bn. In Could Samsung Biologics, a listed subsidiary of South Korea’s largest conglomerate, signed a deal to assist distribute a whole bunch of thousands and thousands of Moderna photographs from subsequent month. It’s constructing a brand new manufacturing facility in Incheon which, the corporate claims, will depart it with a 3rd of the world’s contract-manufacturing capability for “biosimilars”, generic variations of biotech medication.
Even earlier than enlisting biotech corporations to battle covid-19, successive administrations have used tax incentives, partnerships and grants for analysis and improvement to foster the trade. Partly due to such largesse it had been rising at practically 7% a 12 months earlier than the pandemic, twice as quick as South Korea’s GDP. However that was from a low base, and concentrated on the much less profitable me-too finish of the market. South Korean corporations have but to provide you with a blockbuster therapy licensed all over the world. As such, they account for lower than 2% of the worldwide biotech market, says Lee Seong-kyou of Korea Biotechnology Business Organisation, a commerce group.
The trade’s boosters consider that, within the phrases of Kwon Oh-sung of the Korea Institute for Industrial Economics and Commerce, a authorities think-tank, “the pandemic has been a turning level”. Firms have in all probability “discovered extra and accrued extra expertise over the previous 12 months than within the ten years earlier than that”, thinks Mr Lee.
Some fortunate ones, akin to Seegene, have additionally accrued earnings which they will put to make use of. Mr Chun had lengthy hoped to good diagnostic kits that may take a look at for extra ailments with much less advanced tools. This might enable him to widen his buyer base from governments and large hospitals to smaller clinics and even particular person practices. “We’ve all the time had the plan however we by no means had the money to work on it,” he says. “Now we do.”
Can the money preserve flowing? Some buyers could also be getting chilly ft. After hovering in 2020, South Korean biotech’s share costs have pale considerably (see chart). Earlier this 12 months six of KOSDAQ’s high ten corporations have been in biotech: one has joined them since however two have dropped out. Seegene’s shares are price half as a lot as at their peak final August. The market worth of SK Bioscience has dipped beneath what it was after its glowing debut. Shares of Samsung Biologics and Celltrion, the trade’s two giants, are buying and selling beneath their latest peaks.
Given the comparatively easy expertise concerned in merchandise akin to take a look at kits, firms like Seegene now discover themselves uncovered to intense competitors, together with from trade behemoths akin to Roche of Switzerland. Startups gripe that financing is tough to come back by. Everybody grumbles a few scarcity of expert staff. The pandemic has given the trade a shot within the arm. For a booster, the businesses should look to themselves. ■
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This text appeared within the Enterprise part of the print version underneath the headline “Booster shot”