Biotechnology in Malaysia

SUMMARY

One of only 12 centers of mega biodiversity in the world, Malaysia has the ingredients for a successful biotech industry:

  • 15,000 known species of flowering plants

  • 286 mammal species

  • 150,000 invertebrate species

  • 1,000 butterfly species

  • 12,000 moth species

  • over 4,000 marine fish species 

This rich flora and fauna is yet to be exploited for healthcare applications, increased food production, protection of the environment, and wealth creation.  Malaysia’s mega biodiversity, together with its modern infrastructure and strong government support for biotech, offer great potential for pharmaceutical discoveries, strategic partnerships, and biotech business development.

 Biotechnology is not new to Malaysia, but the country’s rich natural resources and scientific expertise have not yet been commercialized to reap the benefits.  Local research and development has not led to the registry of new patents or launching of new biotech enterprises and Malaysia is still in its infancy as far as the biotech sector is concerned. 

 The BioValley project, which was launched in 2003, is expected to attract USD$10.5 - $12.2 billion  in investments during the next ten years.  200 companies are expected to be based in a special area of the Multimedia Super Corridor by 2013, with the Malaysian government contributing USD $263 million to jump-start the project. There should be ample opportunities for U.S. companies to participate in strategic alliances.

MARKET OVERVIEW

Biotechnology includes any techniques that use living organisms to make or modify products, improve plants or animals, or develop micro-organisms for specific uses.  It is a rapidly growing, dynamic industry, spanning many disciplines in science and engineering and will be one of the key drivers of transformation to a knowledge-based economy.

Malaysia’s foray into biotechnology is not new.  Its initial involvement with R&D was in the agricultural sector, which was the country’s primary economic activity before it went on an industrialization drive in the early 70s.  Institutions that were, and continue to be, the bulwark of the country’s current biotechnology R&D include the Malaysian Agricultural Research and Development Institute (Mardi), University Putra Malaysia, and Forest Research Institute of Malaysia.  Over the years, biotech research units have been set up in most Malaysian public universities.  The private sector has engaged in some biotech R&D largely focused on plant tissue culture.  Although according to the Economic Report for 2002/2003, some 50 Malaysian companies use biotechnological processes, (primarily in food production, herbal products, and pharmaceuticals) this still falls short of fulfilling the country’s biotechnological potential.  With 12,500 species of flowering plants, 1,100 species of ferns, and one of the world’s most diverse coral communities, Malaysia has a very diverse bio-source universe still  untapped.  The exploitation of these assets appears to be one of the main thrusts of Malaysia’s revised biotechnological strategy in which agricultural-based biotechnology R&D will remain an important component.

National Biotechnology Directorate (Biotek)

Since its establishment in 1996, the National Biotechnology Directorate (Biotek), which is under the Ministry of Science, Technology & the Environment (MOSTE) has played a major role in spearheading the national biotechnology program via research, development and commercialization, corporate relations, and human resource development. Most  biotech research is carried out in the local universities and R&D institutions with Biotek acting as a coordinator and promoter of private/public sector participation in the national biotechnology program.

 Under Biotek’s management, biotech R&D activities in the country are categorized into seven sectors: molecular biology, plant biotechnology, animal biotechnology, medical biotechnology, environmental and industrial biotechnology, bio-pharmacy and food biotechnology.  The R&D in each sector is carried out via a Biotechnology Cooperative Center (BCC), which is overseen by a coordinator.  Due to the importance of agriculture to Malaysia's economy,  it is not surprising that agriculture and food technology have received greatest emphasis.

BCC, in collaboration with leading research institutions and universities, conducts R&D in each biotech category.  In 1999, Biotek formed a partnership with the Massachusetts Institute of Technology (MIT) to develop and train scientists in areas such as genomics, bio-informatics, and bio-processing.  The main objective of the Biotek-MIT program was to nurture a group of professionals capable of spearheading the development of biotech in Malaysia.

BioValley

Malaysia’s biotechnology agenda will be spear-headed by BioValley Malaysia,  a project that involves the development of a centralized cluster of “world-class facilities and infrastructure”.  Co-location of a critical mass of researchers, industry workers, and entrepreneurs in the Bio-Valley should create an environment  which would facilitate networking and the sharing of information and ideas.  The project will incorporate research, commercial, educational, recreational and residential facilities and include a zone for manufacturing.  The proposed 484-hectare biotech research and development zone in the Multimedia Super Corridor (MSC) is expected to foster closer and greater interaction between the fields of biotechnology and ICT.  According to the Economic Report of 2002/2003, the entity will be known as the Biotechnology and Information Technology Super Corridor.  The development of BioValley, which is expected to be on the same scale as the MSC in comprehensiveness, should be completed in 2006 and fully operational in 2009.

Three new research institutions will form the core of BioValley: the National Institute of AgroBiotechnology, the National Institute of Pharmaceutical and Neutraceutical Biotechnology, and the National Institute for Genomics and Molecular Biology.  The respective institutes’ field of focus was selected based on factors such as availability of research resources, ability to optimize national capacity, and capitalize on successful R&D and private sector investment.  The institutes will forge links with Malaysian universities, act as incubators for innovative research, train scientists and support emerging local biotechnology companies.  The institutes have already begun their operations in three temporary facilities housed in University Kebangsaan Malaysia, University Putra Malaysia, and Mardi, respectively. The experiments and research carried out will be transported to the BioValley, when it becomes a reality several years from now. 

BioValley will be managed by BioValley Development Corporation, while administration of entrepreneurial activities within the area will be facilitated by Biotechnology Development Directorate (BDD).  The Corporation will also address issues of bio-safety and public awareness of biotechnology while the BDD’s primary activities will include patent drafting, technology transfer and licensing, managing relationships with industry, supporting initial business plans for start-up companies and attracting multinational and domestic development.  The proposed corporation will be accountable to the National Biotechnology Development Board under the mandate of the ministerial Biotechnology Coordinating Council.  The high-powered council is chaired by the Deputy Prime Minister and members include the Minister of Science, Technology and Environment; Agriculture; Health; International Trade & Industry; Domestic Trade and Consumer Affairs; Primary Industry; Energy Communication and Multimedia; and Education. The Ministry of Science is responsible for spear-heading the development of biotech in Malaysia.  However, as biotech is multi-sectoral, other ministries are also involved in the development of biotech in areas where it concerns their respective industries.  Biotech companies located within the BioValley will enjoy the benefits of MSC-status companies.

Private Participation

Malaysia has little R&D expertise in general, not only in biotechnology.  It has just three researchers out of 10,000 engaged in R&D, and spent a mere 0.3% of GDP on R&D.  Government support and participation is required to attract investors.  Starting up a biotech venture can cost anywhere between US$130,000 and US$13 million.  A strategy worth looking into is to offer foreigners research opportunities not available in their home countries.  Studies on genetic materials from Malaysia’s rainforests, marine life, tropical crops and diseases common to the Asian races are some examples.

Several factors have influenced the size and direction of private investments in biotechnology. Besides industrial specialization, other factors are:  salary levels; local demand; size and direction of governmental incentives; access to financial markets and venture capital; specific know-how and experience; and public perception and national regulations.

Statistical Data

Statistics on biotechnology in Malaysia are difficult to obtain since it is a newly emerging industry and documented data is not currently available.  Frost & Sullivan estimates the size of the Malaysian biotechnology market at over US$10 million. 

Sales Prospects

According to MIT’s research, BioValley is expected to attract  US$10.5 billion to $12.2 billion in investment over the next 8 to 10 years, attract 250 new companies, and create 17,000 jobs.  The Malaysian government is already contributing  US$263 million to jump start the project.  Besides developing an infrustructure for new research, the government is also providing funds to local universities to conduct research in biotech and has set aside US$6.8 billion for these institutions to conduct research in agro-biotech, healthcare, environment, and energy.

Agricultural biotechnology is seen as a potentially powerful tool to ensure ample food supply for Malaysia.  Tissue cultures of oil palms, rubber trees, rattan, and other forest trees) together with food crops (rice, banana, sago, herbs, and medicinal plants) and ornamentals (orchids, pitcher plants) have been successfully carried out.

 Priority topics identified for further biotech development  include:

A)  Plant biotechnology

genetic engineering for disease resistance, especially viruses

biotechnological management of insects, pests, weeds, and  nematodes

genetic modification of fruits to improve flavor and shelf life

B)  Animal Biotechnology

  • embryo transfer technologies to produce high quality animals

  • gene markers to identify animals for improved productivity and meat quality

  • novel delivery systems for vaccines  

C)  Food Biotechnology

  • microbial contamination in foods and animal feeds

  • development of improved food ingredients

New developments in industrial biotechnology in Malaysia encompass activities such as the optimization and enhancement of new treatment systems through bio-augmentation or genetic engineering.  Research into the development of new monitoring tools, namely bio-sensors, is under way.  This will facilitate accurate and real-time monitoring of the environment.

Research in medical biotechnology has generated several diagnostic tools for dengue and other infectious tropical diseases.  Although R&D activities in bio-pharmacy are relatively new in Malaysia, a bio-enhanced formulation of the anti-malaria drug, artermisinin,  has been produced.  Other projects include screening of mediums for bioactive compounds, the experimental production of bio-molecules using biotechnological approaches, and the development of advanced drug delivery systems for bio-molecules.

Some local scientists have argued that because Malaysia’s biodiversity can only be developed over the long term, the country should first focus on the pharmaceutical sector, as it will yield results faster. Agro-related biotech supposedly has a lower return on investment, whereas for pharmaceuticals it is 100 percent.  Malaysia's research into biopharmaceuticals is still in its early stages and only eight projects have been approved since 2000.  Malaysia is keen on collaborating with established pharmaceutical companies in this sector.

Under the Promotion of Investment Act 1986, a list of biotechnology activities and products was drawn up for high tech investment including:

  • Development, testing and production of pharmaceuticals, fine chemicals, food or feed supplements, and bio-diagnostics;

  • Development and production of cell cultures and biopolymers; and

  • Development and production of biotechnology processes for waste treatment

Malaysian bio-IT (or bio-informatics) market is estimated at US$7.1 million for 2003, (up from US$4.1 million in 2002).  It is very much in the start-up phase, where just a few institutes are spending real dollars on computational biology.  The industry expects a compounded annual growth rate of about 70 percent over the next five years and is expected to reach US$36 million by 2006.  The Ministry of Science Technology and the Environment (MOSTE) has allocated US$1 million to set up the national structural biological informatics laboratory at University Science Malaysia.  This state of the art laboratory, the first in ASEAN, will enable local scientists to develop new drugs.  The laboratory will be set up in stages and is expected to be fully operational in 2005.  Realizing that there is a shortage of scientists, researchers, laboratory assistants, and others, the Government is evaluating ways to increase this much needed workforce.  MOSTE has allocated US$79 million for HR (human resource) development.  Post-graduate studies, master and PhD degrees in biotechnology are being encouraged.  Secondary school students are also being exposed to biotech studies in hopes of generating more interest. 

COMPETITIVE SITUATION

Domestic Production

Biotechnology research is mainly undertaken by public sector institutions such as Mardi, Malaysian Palm Oil Board, Malaysian Rubber Board, Institute of Medical Research and Forest Research Institute of Malaysia.  The private sector’s involvement in biotechnology is primarily in plant tissue culture, such as the production of orchids.  The annual production of orchids via tissue culture alone has been estimated at US$13 million, bringing in export earnings of US$8.7 million. 

The Forest Research Institute of Malaysia is reported to be studying at least 1,300 Malaysian jungle plants for possible medicinal use.  The annual local market for herbal remedies is valued at US$789 million.  There are also manufacturers using biotech to provide high-quality clarified fruit juices and syrups.  Plants such as Tongkat Ali and pegaga are used to produce herbal health products. 

The Malaysian biotech industry is dominated by small-to-medium-sized companies with a handful of larger players (such as those running plantations) which have developed strong R&D arms within their corporations.  There are around 50 Malaysian companies utilizing biotechnology, mainly in food production, herbal products, and pharmaceuticals.  The biotech companies are not clustered in any specific geographical location.  Most are concentrated in Kuala Lumpur and neighboring Selangor state, while others are scattered across the country in Penang, Melaka, Johor Bahru and East Malaysia (states of Sabah & Sarawak).  Private Malaysian companies participating in biotech include: Malesiana Tropicals, TH Group Bhd, Stem Life Sdn. Bhd. and others.

There are three main ethnic groups in Malaysia:  ethnic Malays (muslims), Chinese, and Indians.  Malaysia can, therefore, serve as a gateway to the Chinese, Indian, Indonesian, and Islamic markets.  Malaysia also offers incentives such as tax holidays and relatively relaxed regulations on work permits.  According to the Malaysian Industrial Development Authority (MIDA)’s Industrial strategic planning and international Cooperation Division, tax incentives for biotechnology companies include full tax exemption for five years at statutory income level.  To qualify, these companies need only spend 1% of their sales on R&D, and have 7% of their staff in technical areas.  MIDA has been promoting  the biotechnology sector for three years and has approved eight licenses so far for companies in areas such as the development of native cornstarch and animal vaccines.

Some progress in research and development has been made.  Under the National Biotech Program, which co-ordinates ongoing biotech R&D in the public sector, 18 new products have been developed, including transgenic rice resistant to disease and diagnostic kits for dengue, malaria, and Japanese encephalitis.  The program has also developed seven new processes, including gene transfer technology and plant regeneration systems for rice and orchids.  There have been some commercial results too, such as rapid tests for malaria and typhoid, and diagnostic kits for white spot virus syndrome, which saves the local shrimp industry US$19 million annually.

Exciting research is also being carried out by Malaysian scientists working outside the public sector; the Cancer Research Initiatives Foundation in Subang Jaya Medical Center, for example, is using biotech to identify the molecular signature of cancer cells and the inherited risk of cancer among Malaysians and is working on innovative cancer treatments. 

3rd Country Imports

 Biotech is a new area for Malaysia and there are only 20 -25 biotechnology ventures, compared to 30 in Singapore, 100 in Taiwan and China, 130 in Japan, and 300 in South Korea.  It has been suggested that Malaysia could leverage its inherent strengths by emphasizing agricultural biotechnology rather than competing head-on with the players of the more established medical and clinical sectors.  It was also recommended that Malaysia position itself as a regional exporting base, since India is already the first choice as a service hub, and China the preferred manufacturing hub*.

Factors favorable to Malaysia….

  • Malaysia is well-established in agriculture with a tradition dating back some 75 years and has the richest diversity of plant species – around 15,000.

  • Malaysia has an educated workforce and can serve as a bridge between the first and third worlds.

  • Malaysia's universities (University Malaya, University Putra, UniversityKebangsaan, University Sains and University Technology) with relatively good R&D track records could eventually contribute to the progress of biotechnology.

Less-favorable factors  …….

  • Malaysia is still a minor venture capital destination.  It accounts for only 1% of Asia Pacific venture capital funding.

  • Its domestic market is too small to attract major foreign direct investment.

  • Acute shortage of experienced workers in the biotech sector

  • Lack of transparency in public sector tendering and contracting

How does Malaysia compete against the rest of Asia?  Japan, Taiwan, and Korea appear to be ahead of the curve with new start-ups and private entrepreneurial investments.  Indonesia is planning a Bio-Island, located on Rempang Island, which is expected to be completed in 2008.  Over the next five years, Singapore's government will be managing around US$700 million to develop Singapore into a biomedical Asian hub.  China and India have also begun attracting interest and investment because of their strong base of scientific excellence, cost advantages and large potential domestic markets.

Although Malaysia is still lagging behind some Asian countries in terms of technological development and human resources, the Malaysian government has shown its determination and interest and is serving as a catalyst for biotech development.  The companies that have opted to invest in Malaysia indicated their choice was influenced by readily available bio-resources and the supporting infrastructure for further R&D.   Malaysia, which has less red tape in dispensing funds, has already attracted Singapore investors to set up a number of biotech companies.  Malaysia is partnering with multinational companies such as Roche Diagnostics of Switzerland in developing a SARS diagnostic kit.  Other foreign participation is from countries such as Korea, U.K., Russia, and Japan.

 The Malaysian Palm Oil Board (MPOB) collaborates with research universities such as the University of Leicester and University of Bristol, U.K.; Cirad in Montpellier, France; Plant Research International in Wageningen, The Netherlands; and the IMD/CNR in Pisa, Italy in tissue culture research.

 * The Star, Oct. 10, 2002

U.S. Market Position

Malaysia still lacks R&D and expertise in biotech.  In 1998, Malaysia had 7 new scientists for every 10,000 existing scientists.  This figure doubled to 15 new scientists for every 10,000 in 2000.  Education, science training, and support will help resolve the shortage.  There will be some rough going before the industry matures.  One solution for biotech entrepreneurs is to partner with another biotech company and benefit from one another’s knowledge and competitiveness.  U.S. companies should definitely consider biotech opportunities in Malaysia.

Two biotech joint-venture agreements between Malaysian and U.S. companies were signed in October 2002 during the BioMalaysia Symposium.  MSC-status  Open Source Systems Sdn. Bhd. and NonoDiagnostiX Inc. joined forces to form a company  for developing and commercializing applications for research, diagnosis, and healthcare.  NonoDiagnostiX is a Silicon Valley company working in research and development of biotechnology, nanotechnology, and bio-informatics.  Open Source Systems is involved in IT and bio-informatics.

The other agreement was between Tekun Ventures Sdn. Bhd. and Ivy Holding Group of Santa Clara, California, to form a biotech-based venture capital company to manage venture capital funding to support technological development by local and foreign investors.

Another strategic alliance, which facilitates effective and successful biotechnology industry development, is the Malaysia-MIT Biotechnology Partnership Program (MMBPP).  The partnership combined the scientific and research capabilities of  MIT and its Malaysian counterparts, focusing on developing Malaysia’s natural resources (such as oil palm, tongkat ali) and to develop intellectual property.  It is sponsored by the Ministry of Science Technology and the Environment (MOSTE), with the National Biotechnology Directorate as the designated authority. 

A total of eighteen academic, industrial, and government research institutions, including six biotechnology cooperation centers, along with the Massachusetts Institute of Technology collaborate in the MMBPP.  They are:  the Forest Research Institute Malaysia (FRIM), Palm Oil Research Institute Malaysia (PORIM), Applied Agricultural Research (AAR), FELDA Agricultural Services Sdn. Bhd., Golden Hope Plantations, Guthrie Biotech Laboratory Sdn. Bhd.,

Golden Hope Plantations, Guthrie Biotech Laboratory Sdn. Bhd., Institute for Medical Research (IMR), IOI Plantations Bhd., Malaysian Agricultural Research and Development Institute (MARDI), Sime Darby Plantations, Standards and Industrial Research Institute of Malaysia (SIRIM), Technology Park Malaysia (TPM), TropBio Sdn. Bhd., United Plantations Bhd., University Kebangsaaan Malaysia (UKM), University Malaya (UM), University Putra Malaysia (UPM), and University Science Malaysia (USM).  The MMBPP has approximately 200 research personnel in Malaysian institutions and 27 research personnel, including Malaysian scientists working in MIT.

 The MMBPP was launched as a five-year program with two research sub-programs:

1)      Natural products discovered from Malaysian indigenous medicinal plants.  The first was with Eurycoma Longifolia (Tongkat Ali) and Centella asiatica (Pegaga)

2)      Oil palm biotechnology – production of high value substances using oil palm as a new generation “manufacturing plant”.  The oil from oil palm is a major cash crop in Malaysia.  The research on oil palm focuses on two major areas: (1) developing and improving methods for the cultivation of oil palm in tissue and suspended culture  (2) oil palm engineering for the production of biodegradable plastics.

END-USERS

The biotech industry in Malaysia consists of companies specializing in biotechnology, agriculture, bio-pharmaceuticals, and bio-informatics as well as suppliers.  Currently there are some 500 biotechnologists and 3,000 undergraduates, though it isn’t clear how many of them will remain in a field notorious for long research periods that don’t always end in satisfactory or commercially viable results. 

Companies specializing in biotechnology

There are only a few of companies specializing in biotechnology which focus on a range of technologies (such as tissue culture, diagnostics, vaccine production, blood bank collection, and clinical testing).  They have their own proprietary technologies which have either been licensed from a public institution (international or local) or developed in-house.  Some companies are local arms of multinational biotechnology companies that have set-up operations in Malaysia.

Bio-pharmaceutical companies

There are over 208 registered licensed pharmaceutical manufacturers in Malaysia, including those who produce over-the-counter (OTC), traditional and standard pharmaceutical generic drugs or act as sales agents for international pharmaceutical companies.  All these factories conform to the standards of the World Health Organization’s Code of Practice.  Some of the traditional pharmaceutical companies set up manufacturing plants to make biotech-based pharmaceuticals and laboratories to conduct clinical trials and bio-equivalence studies.

Agriculture

Companies involved in agricultural biotech are mainly plantation (palm oil), herbal-based, and aquaculture companies.  Plantation companies in the oil palm sector mainly work on tissue and cell culture biotechnology to mass-propagate top-of-the-line plants. 

Bio-informatics

Advances in molecular biology and the equipment available for research in this field have allowed the increasingly rapid sequencing of large portions of the genomes of several species.  This deluge of information has necessitated the careful storage, organization and indexing of sequence information.  Information science has been applied to biology to produce Bio-informatics--a field involved in creating and maintaining databases of biological information as well as programs and algorithms to aid researchers analyze and interpret this information.

Suppliers to the Biotechnology Sector

Most suppliers are multinationals that have set up their distribution base in Malaysia.  Their customers are primarily universities, since there are only a small number of companies in Malaysia involved in “pure” biotechnology.  These companies market their products (consumables, equipment, software, disposables as well as services) and promote the advancement of biotechnology by arranging speakers and sponsoring workshops and training.

MARKET ACCESS

Agriculture continues to play an important role in Malaysia’s economy and accounted for 8.7 percent of GDP in 2001, notwithstanding many obstacles (an acute shortage of labor; limited availability of suitable land for agriculture; weather conditions that limit the variety of plants that can be cultivated; increasing cost of production arising from inter-sectoral demand for resources; and an increasing call to stop destroying natural forests and converting them into monoculture plantations.)  As a result, Malaysia has a high import bill.  Of the total US$8.4 billion in the 2000 budget, US$2.8 billion went towards importing food.  In 2001, Malaysia’s food imports totaled US$3.2 billion.  Biotechnology has been identified as a core technology which can be used to advance the agricultural sector.  Industries targeted for improvement include palm oil, rice, cocoa, lumber and forest species, fruits, flowers, ornamentals, vegetables, spices and other minor crops and plants.

 Malaysia needs to identify its competitive edge and  clearly definite its goals (i.e.  what it wants to be strong in and how to get there).  Countries with rich bio-diversity tend to be developing countries, while those with the know-how to develop and discover drugs are developed nations.  The concern is that the latter will take advantage of the former.  In this regard, Malaysia has been prudent and is introducing two pieces of legislation--the Bio Safety Act and the Access and Benefit-Sharing Act--that will clearly lay down the rules for sharing Malaysia’s biodiversity riches.

The establishment of Bio-safety regulations is to ensure monitoring and regulation of international projects pertaining to genetic modification and release, commercial activities and technologies, as well as development, release and large scale use of genetically modified organisms (GMOs). A preliminary code of conduct for the release of GMOs into the environment has been drafted. The Ministry of Science, Technology and the Environment (MOSTE) is currently examining the code  which will initially focus on the regulation of agricultural products.  Gradually, its application will be extended to medical, food, and other industrial products.  

Financing

Malaysia Venture Capital Management Bhd (Mavcap), which was set up by the Ministry of  Finance, has allocated US$100 million for biotechnology start-ups to venture in a big way into life sciences.  Currently, Mavcap has four biotech companies with a total investment of US$13.2 million.  Of these, one is in pharmaceutics, another in biomaterial and two are biotech venture fund companies.  Currently MAVCAP has 900 proposals to evaluate.  Of these, one company is undergoing due diligence, five are in the initial screening stage and 23 companies are being reviewed.  The five companies in the initial screening stage include one in diagnostics, two in medical devices, and two pharmaceutical companies.

Earlier allocations include a US$52.6 million fund launched in June 2000 which is managed by Bank Industri and Teknologi Malaysia Bhd.  Mayban Ventures Capital Co Sdn. Bhd. and Commerce Technology Ventures Sdn. Bhd. set up two US$39.5 million funds and Bank Negara Malaysia contributed US$26 million to each company. 

Besides venture capital, there are also more traditional government grants.  Aspiring biotech entrepreneurs can apply for a grant under the Commercialization of Research and Development Fund for market surveys and research, product/process design and development, standards and regulation compliance, intellectual property protection, and demonstrations of technology.  Malaysia has also established a Technology Acquisition Fund (TAF), managed by the Ministry of International Trade and Industry to facilitate the acquisition of strategic and relevant biotechnology for the industrial sector.  TAF provides partial funding of the total cost involved in the acquisition of technology on the approved list as outlined in the Promotion of Investment Act 1986 and other technologies approved by the Government.  One item on the approved list is “ the design, development and manufacture of pharmaceuticals”.  The eligible funding includes the purchase of high-tech equipment and machinery, technology licensing, acquisition of patent rights, prototypes, and design.

There is also an Industry R&D Grant Scheme, where the Government funds 70 percent of eligible project costs for research and development carried out by companies that collaborate with one or more local public research institutions in “approved activities”, one of which, is biotechnology.  Research institutions and institutions of higher learning can receive grants under the Intensification of Research in Priority Areas. 

 Funding in biotechnology can also be sourced from two of the Ministry of Science Technology and Environment grant schemes, namely Intensification of Research in Priority Areas (IRPA) and the Industry Research and Development Grant Scheme (IGS).  IRPA supports research and development activities in the public sector in areas that address the needs of Malaysian industries for the enhancement of its national socio-economic position. IGS encourages Malaysian companies to be more innovative in using and adopting existing technologies and creating new technologies, products and processes which will benefit the national economy. 

 A US$30 million venture capital fund was recently created by Spring Hill Bioventures Sdn. Bhd.  The fund will enable Malaysian institutions to gain experience in biotechnology and contribute towards the establishment of the industry in Malaysia.  It will invest in start-ups and under-valued biotech companies in the European Union and the United States.  Potential investments for the fund, which focuses purely on life science, include a human insulin plant, monoclonal antibody/biology plant, pre-clinical CRO (clinical research organization), and head and neck cancer projects in Malaysia, a boron* radiotherapy company in Britain, a cell therapy company in the U.S., and cancer vaccine companies in the U.S. and Britain. 

(* boron technology enhances the effects of radiotherapy)

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