On February second, the Korean Ministry of Health and Welfare announced the start of a second round of financing to the biopharmaceutical industry, as part of the Global Pharmaceutical Industry Development Fund (GPIDF). A total of USD 123 million will be invested in Korean pharmaceutical and biotech companies for the purposes of financing the overseas M&A/joint ventures, the development of overseas facilities for production or R&D, including global clinical trials. The Ministry of Health and Welfare has contributed USD 18 million to the fund directly, while the Korean Development Bank, the Industrial Bank of Korea, Korea Investment and Securities, Korea Investment Partners, and others contributed the remaining funds; Korea Investment Partners will be managing the portfolio. Targeted primarily at small and medium sized pharmaceutical enterprises with strong product candidates, the investments will be made for eight years, with an option for a two-year extension.
This funding round is a small part of a much broader government initiative in support of the Korean life sciences industry that began in the mid 2000s. Korea’s budding clinical trial industry was targeted first, and the government partially funded the development of 15 world-class clinical trial centers at major teaching hospitals, which allowed Seoul to climb from twelfth to first place worldwide in terms of clinical trials on a per city basis between 2007 and 2012. Another mechanism, the USD 1 billion Korea Drug Development Fund established in 2011, was created with the goal of developing ten new drugs by 2019 by supporting specific private R&D projects from the pre-clinical stages through commercialization. The GPIDF’s first round of funding of USD 92 million took place in 2013, and was one of the first manifestations of the governments pledge to invest USD 8.9 billion in for pharmaceutical R&D between 2013 and 2017. The ultimate goal of these combined efforts is the achievement of the “Pharma 2020 vision”, which is for Korea to develop 20 new drugs and rank seventh globally in terms of new drug development by 2020.