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InnovatIon Island

Ten years ago, Singapore set out to build a biomedical sciences sector that would rival nations much larger and more established in the life sciences than itself. What followed was a decade of dedicated government funding and initiatives to draw leading researchers and companies to Singapore. This has paid off big for the city-state: it’s become a world-renowned biomedical hub and a growing base for biotechnology in Asia.

In 2000, the Singapore government first designated biomedical sciences as one of four pillars of the economy along with electronics, engineering and chemicals. In just over 13 years, the city-state has created a top-notch biomedical research hub that’s home to more than 50 biomedical science companies and host to 30 of the world’s leading life science companies.

This bio-cluster is the fastest-growing in Asia, with R&D activities in drug discovery, translational and clinical research. Its biomedical research focuses on clinical sciences, genomics, bioengineering, molecular/ cell biology,and immunology, as well as newer areas of medical devices, personalized medicine and nutrition.

Singapore’s biomedical sector has seen remarkable growth. Its manufacturing output has grown close to fivefold, from $6 billion in 2000 to $29.4 billion in 2012. In 2012, the sector accounted for 5 per cent of the country’s gross domestic product (GDP).This success is no accident: Singapore’s combination of public and private sector investment, its business-friendly climate, and major international public-private partnerships have all played important roles in developing the sector.

World-class infrastructure

Since making the life sciences a priority, Singapore’s government has created a number of organizations and councils to support both public and private research projects. These include A*STAR (The Agency for Science, Technology and Research) and the Ministry of Health’s (MoH) National Medical Research Council for public sector research initiatives.

For the private sector, companies have the Economic Development Board (EDB). The EDB’s Biomedical Sciences Group (BMSG) promotes private sector manufacturing and R&D activities, and its Bio*One Capital is the EDB’s investment arm for biomedical innovation.

One of the main organizations leading the development of the sector is A*STAR. It’s Singapore’s lead agency for fostering scientific research and talent. The organization oversees 14 research institutes, as well as six consortia and centres located around two bioclusters: Biopolis and Fusionopolis. Both are located in one-north, a hotspot for research and innovation created by the JTC Corporation. The Biopolis complex is an international R&D centre. It houses key public and private biomedical research institutions. It’s also home to 40 corporate labs, and many global biotech and pharma companies.

International partnerships

With offerings like a business-friendly environment, including intellectual property protection and low corporate tax rates, it can be understood why Singapore is an attractive spot for companies to set up operations. It offers the economic competitiveness and the political stability needed to generate trade, investments and partnership opportunities. These factors, combined with Singapore’s biomedical research excellence, have induced many global pharma companies to set up shop in Singapore. Sanofi-Aventis, GSK, Novartis and Sanofi have all set up their regional clinical trial centres in the city-state.

Other companies are investing in Singapore’s human capital. For example, Roche established its Singapore Hub for Translational Medicine,with 30 scientists on board, to partner with Singapore’s scientific and medical institutions. Bayer Healthcare invested an additional S$14.5 million in projects with local academic institutions, to advance R&D for early diagnosis and treatment of cancer.

Many leading biopharmas have made Singapore their global manufacturing base. These companies operate plants that manufacture a variety of active pharmaceutical ingredients (APIs), biologics and nutritionals. Baxter, Lonza, GSK and Roche have announced investments to set up major biologics facilitiesthat total US$2 billion in capital expenditure.

Doing business with Singapore

So how can Canadian companies get in on the game? Recently, Ontario had a trade mission to Singapore, where Ontario delegates met with leaders in Singapore’s biomedical sciences sector. Dr. Patrick Tan is a principal investigator at the Genome Institute of Singapore and A*STAR.

For Tan, the meetings held promise for partnerships in the future: “I felt that there was a good robust exchange of strengths and weaknesses from the different sides. This level of honesty is a great stepping stone to future deep collaborations.”

Tan met with Ontario to share best practices on the development of personalized medicine. Post-meeting, there are possibilities for future collaboration, with A*STAR talking to the team at the Ontario Institute for Cancer Research (OICR), to learn more about their IT framework and software for personalized medicine.

“I was very impressed by the progress the Ontario team has achieved in implementing novel technologies into personalized medicine,” said Tan. “Translating new research methods into actual clinical implementation is often challenging, and I certainly learnt a lot from their experiences in what (and what not) to do.”

His advice for international delegates looking to do business with Singapore is to take the time to build up partnerships: “Don’t expect to clinch a deal on the first visit. Repeated exchanges are the best pathway to true results.”

To see this story online visit http://biotechnologyfocus. ca/?p=9781

tHE LAst WORD

By Peter Pekos

The Need for SuSTaiNable MargiNS:

A CMO’s Perspective

Peter Pekos, president and CEO, Dalton Pharma Services

Any notion of “healthy” gross margins may sound like romantic nostalgia from the distant past. The common margin descriptors of today are “razor thin,” “lean,” “squeezed,” “shaved” and “starvation.” A widespread view is that anything else is not consistent with the current reality for CMOs in the pharmaceutical industry. My dissenting argument is that the long term health of a CMO and of its clients depends on adequate gross margins for contracted projects. Current trends are making adequate margins more essential than ever before. They are absolutely necessary if a CMO is to provide the service level and compliance assurance that the new reality requires. A major part of the tension between vendors and clients over margins is that the latter do not fully understand that a substantial percentage of the gross margin must go into infrastructure and other costs which are not part of the CMO bottom line.

A simple illustration of infrastructure cost is the equipment for generating water-for-injection.This requires a boiler. In normal use, it must be replaced every 10 to 15 years. For Dalton’s scale of operations, a new boiler is $350,000. There are many other pieces of equipment with similar or shorter lifetimes, from air handling units, filling machines, analytical tools and production machinery. In addition, we must allow for contingencies. This is a ma-

jor consideration for those of us who provide sterile fill services. If a failure is detected in regular process checks, the cost of finding and correcting the problem can escalate quickly. Upgrading worn production infrastructure is another major financial issue. Costs have escalated because retrofitting existing machinery is now seldom satisfactory and the CMO is faced with the acquisition of new equipment. A potential client came to us recently because of serious compliance issues with his current CMO. When told that the cost per unit for his fill requirements would be in the order of $2.50, he was shocked. “How can you charge so much,” he asked. “I’ve been paying only $1.50 per unit.” The answer is simple. At the $1.50 price, his old CMO was incapable of meeting current compliance requirements and that is why he was forced to find a replacement. The reality is that his vendor had probably been struggling with low margin business for some time, or A trend that shows no sign of abating is that sponsors, had mismanaged decent margins by putting too much tothe FDA, EMEA and other regulatory agencies ward the bottom line. Chronic increasingly view the CMO as the gatekeeper of quality. neglect of infrastructure and operations compliance always catches up with CMOs and eventually causes business failure. The final blow is very often the identification by the regulatory body of problems which the CMO decides are too costly to fix. A trend that shows no sign of abating is that sponsors, the FDA, EMEA and other regulatory agencies increasingly view the CMO as the gatekeeper of quality. It is an inevitable consequence of the industry shift to the virtual model and having many suppliers of components