While the Japanese market still dominates deal activities in the Asia-Pacific (APAC) region, companies and research institutes in emerging APAC countries have recently been attracting high calibre collaborators, according to the latest analysis by Datamonitor.
Datamonitor’s latest report* on “Pharmaceutical Licensing and Alliances in the Asia-Pacific Region”, published in November 2010, reveals that Pharma is enhancing its focus on markets in the APAC region. The largest of the developed APAC markets, Japan and Australia, led the region in terms of total deal numbers between Q3 2009 and Q2 2010. However “companies and research institutes from the more progressive emerging pharmaceutical markets, namely South Korea, China and India, reported significant deal activity during the 12 months analyzed,” says Erin Brady, Datamonitor healthcare analyst and author of the report.
Over 300 licensing, market/distribution, research/discovery and other deal types reported between Q3 2009 and Q2 2010, involving both APAC-based companies and research institutes, were analyzed by Datamonitor. Japan-based companies or research institutes were involved in 30% of deals, while 18% of deals involved Australian entities; but it is the deal activity involving South Korean (15%), Chinese (14%; including Hong Kong) and Indian (14%) companies and research institutes that bodes well for increasing the region’s prospects for interacting with the pharmaceutical industry on a global scale.
Pharma is keen to expand into emerging APAC countries due to rapid economic growth and burgeoning middle classes in these markets, which it hopes will offset future losses from the 2011 “patent cliff” and slowing growth in major developed markets. “The knowledge of regional differences, complex regulatory processes and local market access routes that domestic companies possess, along with their rapidly improving capabilities in innovative, low-cost research and development, are some of the drivers for international Pharma aligning with APAC-based companies and research institutes,” explains Erin.
The most common deal types found in APAC were product licensing and market/ promotion/distribution agreements. Australia, with its strong and innovative biotech industry, and China, with its rapidly evolving R&D expertise, were home to companies participating in a high proportion of research/discovery deals. The highly complex regulatory environments of Japan and South Korea encouraged a higher proportion of co-promotion agreements between international and domestic companies. Notably, all co-promotion deals analyzed involved top ranking pharmaceutical companies (those ranked 1–100 by IMS sales in 2009).
“Looking forward, Big Pharma will play an increasing role in Asian pharmaceutical partnerships.” surmises Erin. “Biotech opportunities and innovative research out of universities will be of particular interest, as the international pharmaceutical industry begins to recognize APAC as more than just a source of low-cost manufacturing services and generics.”