Technology exports have become a familiar term in the K-Bio sector. The size of contracts, upfront payments, and milestone payments are now seen as benchmarks for success.
Since the government announced its intention to foster the pharmaceutical and biotech industries as future growth sectors in 2017, technology exports have established themselves as key performance indicators for domestic companies. The fact that the scale of technology exports from domestic pharmaceutical and biotech firms exceeded 13 trillion won in the first half of this year reflects this changed status.
There are valid reasons for this shift. Domestic companies face significant challenges in fully developing a new drug. The third phase of clinical trials, which is the most critical stage, typically involves 1,000 to 3,000 patients to verify the drug's efficacy and safety. Few companies have their own global sales networks.
Choosing to export technology at the early stages of clinical trials has been a practical strategy for domestic firms to continue their research and development (R&D). However, it is always disappointing that the greatest added value generated during the commercialization process goes to the global pharmaceutical companies that acquire the technology.
While the total contract amount announced during technology exports garners attention, the actual upfront payment often amounts to only 2-3% of the total, depending on the contract structure.
Although technology exports are undoubtedly a necessary strategy, the industry's competitiveness should not be limited to this. Creating conditions that allow domestic companies to choose longer-term development will be crucial for long-term competitiveness.
Experts suggest that expanding capital communication through initiatives like the National Growth Fund, success-based loans, and mega funds is essential. The aim is to create an environment where companies do not have to abandon development due to financial burdens or transfer technology too early.
The recent government initiative to expand support for the biotech sector is a welcome change. However, the success of these policies depends more on how and where the budget is allocated than on its size. Given that global big pharma invests tens of trillions of won in R&D each year, the limited policy funding must prioritize direction over scale.
Distributing small amounts to multiple companies or focusing support on relatively safe late-stage projects will not effectively change the industry's structure.
A representative from the biotech industry noted, "The recent National Growth Fund tends to concentrate funding on areas with relatively lower risks, such as late-stage clinical trials or commercialization, rather than sharing high-risk burdens. Public funds should play a role in filling gaps in areas that the private sector cannot manage effectively."
Policy funding should focus on bridging gaps that the private sector cannot cover. It is necessary to create a foundation for early startups to validate their technologies during the proof of concept (PoC) stage and to share R&D risks during critical phase three clinical trials. This will enable private capital to engage in follow-up investments and allow domestic companies to secure the capacity to choose paths beyond technology exports.
If policy funding operates under the same criteria as private investment, its purpose becomes unclear. As support increasingly concentrates on relatively safe late-stage projects or large companies, early-stage innovative firms that desperately need funding will lose their ability to survive in the market.
Technology exports represent a significant achievement for K-Bio. The next challenge is not merely increasing the number of contracts but creating an industry structure where technology exports are not the only option. Establishing an environment where domestic companies can fully pursue development is the task that must be addressed following technology exports.
* This article has been translated by AI.
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