Even as India is emerging a hot destination in Asia for
research and manufacturing, clinical research, and discovery services,
Indian companies are heading to Malaysia in large numbers. They are
going to be Asian neighbors for biomanufacturing, drug discovery, stem
cell R&D, molecular diagnostics, aquaculture companies like Biocon,
Dr Reddy's Labs, Avesthagen, Actis Biologics - are looking at expanding
their operations to Malaysia, lured by its attractive offers and
advantages of setting up a base there.
Bangalore-based Biocon, India's leading biotechnology company, on
October 27, 2010, announced Strategic Foreign Direct Investment of $160
million in Malaysia with the Malaysian biotechnology corporation,
BiotechCorp. The investment will be made towards establishing a
biomanufacturing and R&D facility in Bio-XCell, a custom-built
biotech park and ecosystem in Iskandar Malaysia.
In October 2010, India's premier biotechnology company Biocon
a strategic foreign direct investment (SFDI) of $160 million in
Malaysia with the Malaysian Biotechnology Corporation (BiotechCorp).
The investment is for setting up a biomanufacturing and R&D
facility in Bio-XCell, a custom-built biotechnology park and ecosystem
in Iskandar, Malaysia.
“Biocon's strategic investment in Malaysia will propel our industry to
the next level. It will be a catalyst in our commercialisation efforts,
as we enter phase 2 of our National Biotechnology Policy – the Science
to Business Phase,” said Dato' Iskandar Mizal Mahmood, chairman,
Malaysian Bio-XCell& CEO, BiotechCorp.
“This will be the first high-end biosimilar and biopharmaceutical
manufacturing and R&D facility in Malaysia. In compliance with US
FDA cGMP standards, it will raise the bar for quality and excellence in
the sector and market. Biocon will stimulate growth for the sector and
provide commercial opportunities for Malaysian biotechnology's SMEs. We
can expect an increased presence of Biocon-affiliated global giants,
growing the sector to new heights,” Dato' Iskandar said.
In this backdrop, customized incentives for large investments, access
to ASEAN markets through Free Trade Agreements, no restrictions on
equity, adoption to ICH & FDA guidelines for manufacturing
activities, industry-friendly regulations, and many other factors are
drawing Indian companies to invest in Malaysia.
Exchanging the business intent documents to this effect, in the
presence of Indian Prime Minister Dr Manmohan Singh and his Malaysian
counterpart, Mohd Najib Tun Abdul Razak, Kiran Mazumdar-Shaw, chairman
& managing director, Biocon said, “Malaysia is a compelling global
destination for biotechnology, backed with world-class infrastructure
and attractive tax incentives. Investing in Malaysia provides us with
an international location with strategic geographical proximity to
India. Biocon is pleased to be an early mover in this emerging
opportunity, as we dovetail our research and biomanufacturing
operations with those in Malaysia, to gain a global competitive
“Malaysia is a compelling
Commenting on the prospects of doing business in
Malaysia, Kiran Mazumdar-Shaw chairman & managing director, Biocon,
said, “Malaysia is a compelling global destination for biotechnology,
backed with world-class infrastructure and attractive tax incentives.
Investing in Malaysia provides us an international location with
strategic geographical proximity to India. Biocon is pleased to be an
early mover in this emerging opportunity, as we dovetail our research
and biomanufacturing operations with those in Malaysia, to gain a
global competitive advantage.”
Mazumdar-Shaw added that the project would focus on R&D and
production of high-end biosimilars and other biopharmaceutical
products. The investment is the largest for the Malaysian biotechnology
sector thus far. In the first phase, Biocon proposes to invest
The Biocon project would focus on R&D and production of high-end
biosimilars ,besides other biopharmaceutical products. The investment
is the largest for Malaysian biotechnology sector, so far. In the first
phase, Biocon proposes to invest about 720
In a span of four years, India has become the fourth largest investor
in biotechnology space in Malaysia, with five companies having
established operations there - Stempeutics Research, Aurigene Discovery
Technologies, Suvarna Rekha Marines, Geneflux Biosciences and Vivio Bio
While Avesthagen is working with Inno Biologics, a leading local
contract manufacturing company. Suvarna Rekha Marines, an
aquaculture biotechnology company based in Visakhapatnam (Andhra
Pradesh) is an early mover in setting up operations in Malaysia. Since
2006, the company has been involved in aquaculture biotechnology
R&D, and the commercial cultivation of the fresh water prawn
Macrobrachium rosenbergii, also known as the Giant Malaysian Freshwater
Prawn; and locally known as 'Udang Galah' in Malaysia.
Bangalore-based Geneflux Biosciences, a technology-driven molecular
diagnostics company, has been involved in product-oriented research,
development and manufacturing of molecular diagnostic kits in Malaysia.
Since 2007, it has invested about 9
president (Science & Technology)
& COO, Geneflux (India & Malaysia). “The company has
ISO9001:2008 certification, and is being audited for IEC/ISO 17025:2005
accreditation. Recently, we enrolled into “RCPA Quality Assurance
Programs Private Limited”, Australia; and have participated in
inter-laboratory quality assurance scheme, conducted by Institute of
Medical research (IMR), Malaysia,” he added.
A company that is into biotechnology activity and has been
with BioNexus Status by the Malaysian Biotechnology Corporation is
eligible for the following incentives:
► An exemption from tax on 100% statutory income for 10 years of
assessment, from the first year the company derived statutory income
from the new business; or for five years of assessment from the first
year the company derived statutory income from the existing business
and expansion project;
► An exemption of 100% statutory income, derived from a new business or
an expansion project that is equivalent to an allowance of 100% of
qualifying capital expenditure incurred for five years.
► A BioNexus Status company is entitled to a concessionary tax rate of
20% on statutory income, from qualifying activities for 10 years, upon
expiry of the tax exemption period
► Tax exemption on dividends distributed by a BioNexus status company;
Exemption of import duty and sales tax on raw materials/components and
machinery and equipment;
► Double deduction on expenditure incurred for R&D; and for the
promotion of exports;
► Buildings used solely for the purpose of biotechnology activities
will be eligible for Industrial Building Allowance, to be claimed over
a period of 10 years.
Geneflux that received “2010 Asia Pacific Frost & Sullivan Niche
Company of the Year Award in Molecular Diagnostics” has a niche benefit
and competitive edge for being both manufacturer and service provider
of molecular diagnostics kits. It has developed six PCR-based products,
namely MyDENKit (dengue virus detection and serotyping), MursaFlux
(Methicillin resistance staphylococcus aureus identification),
FluFinder (H1N1 virus identification), MyCMV (Cytomegalo virus
detection), Chikungunya virus detection kit and Meliokit (Melioidosis
caused by Burkholderia pseudomaleii detection), that are being marketed
in Malaysia and abroad. It also provides qualitative and quantitative
diagnostic services for hepatitis B, hepatitis C, HSV 1 and 2 (human
simplex virus), VZV, HIV and other infectious diseases caused by virus
Bangalore-based Stempeutics Research, a group company of Manipal
Education & Medical Group, opened the first-of-its-kind stem cell
research facility in Malaysia, citing the ease in getting early
approvals. Since its inception in 2008, Stempeutics has been working
together with leading medical institutions in Malaysia, to drive
long-term research activities to further strengthen its leadership
position in the area of stem cell research.
will increase sales in ASEAN countries”
-Dr Prashanth Bagali, director,
Geneflux, in association with a Malaysian university, launched the
world's first PCR-based commercial kit, MyDENKit (acronym for Malaysian
Dengue Kit) during BioMalaysia 2008 conference.
Geneflux was awarded the “BioNexus Status” by the Malaysia
Biotechnology Corporation. In 2008, MOSTI (Ministry of Science,
Technology and Innovation) recognized our “passion for science” and
a “Certificate of Achievement” for the
successful completion of dengue project.
In 2009, we received the second round of funding of 3.1
Frost & Sullivan Niche Company of the Year Award in Molecular
We will invest in international business development to increase sales
within “Free Trade Zone” of ASEAN countries.
We will collaborate with American and European diagnostic companies for
the development of kits and transfer of technology, to reduce time to
market for diagnostic kits.
We offer diagnostic services on 30 different tests; and will increase
the number of tests to 50 diseases (or microbes) by the end of year
2011. We are looking for partners in ASEAN countries for distribution
and marketing of our diagnostic products
As a result of collaborative efforts, Stempeutics Research announced in
May 2010 that it has received clearance from Medical Research and
Ethics Committee, Ministry of Health, Malaysia, for conducting human
clinical trials in patients with ischemic cerebral stroke (CS), using
investigational new drug (IND)-based on Mesenchymal Stem Cells, derived
from donated bone marrow.
Stempeutics became the first international company in Malaysia to get
the BioNexus status by BiotechCorp. Also it has received National
Pharmaceutical Control Bureau (NPCB) certification for its
manufacturing facility for conforming to the requirement of current
good manufacturing practices (cGMP), in accordance with the
Pharmaceutical Inspection Co-operation Scheme (PIC/S) GMP guides and
its relevant annexes for Isolation, Processing and Storage of
Mesenchymal Stem Cells. Stempeutics is the first stem cell company in
Malaysia to have obtained this conformance certification.
companies in Malaysia
Another Bangalore-based Aurigene Discovery Technologies, a 100 percent
subsidiary of Dr Reddy's Laboratories too, opened operations in
Malaysia in 2008. Aurigene works exclusively with partners on a project
for different stages of drug discovery called Hit Generation, Lead
Generation, Lead Optimization and Pre-Clinical development. Aurigene
has a unique hybrid model, where it is able to run a profitable
operation on the strength of its risk-sharing early partnership deals,
and therefore, has a sustainable business model with the potential to
generate long-term value.
In March, 2010, Avesthagen, a leading systems biology biotechnology
company from Bangalore commenced manufacture of two of its biosimilars
at Inno Biologics, a leading contract manufacturing company in
Malaysia. “We are currently carrying out cGMP manufacturing of our
first biosimilar product, AVDESP for clinical trials at Inno Biologics
facility. The second biosimilar, AVENT will also be produced for
clinical quantities in Inno Biologics,” says Dr Villoo Morawala Patell,
founder, chairperson & managing director, Avesthagen.
—Dr Villoo Morawala Patell, founder
the driving factors for Avesthagen to invest in Malaysia?
Avesthagen has been fortunate to work with a contract manufacturing
organization (CMO) in Malaysia that has a manufacturing capability of
mammalian cell-based biologicals, in conformation with FDA and European
c-GMP guidelines The Malaysian facility offers improved manufacturing
efficiency The willingness of the Malaysian facility to be flexible and
adapt to Avesthagen’s needs, has been very helpful. Manufacturing in
Malaysia has offered a very important advantage, it is compliant with
The International Conference on Harmonisation of Technical Requirements
for Registration of Pharmaceuticals for Human Use (ICH) and US Food
& Drug Administration (FDA) guidelines, for all manufacturing
Q Any support Avesthagen has received
from the Malaysian government?
The facility being used by Avesthagen, Inno Biologics, is a government
facility. Besides that, there is indeed significant support from the
government to obtain clearances and other licensing support.
Q What are your future plans for the
Avesthagen will initially focus on completion of clinical batches of
the first two molecules. With the support extended by Inno Biologics
and the Malaysian government, the relationship with Malaysia is sure to
be that of long lasting mutual benefit.
Avesthagen has built a robust pipeline of eight biosimilars — of which
four are in an advanced stage of development. The first product for
anaemia, AVDESP has already completed preclinicals, and is ready for
cGMP manufacturing for conducting clinical trials in India. The second
biosimilar for auto-immune disorders, AVENT, will also be produced at
the Inno Biologics facility. Inno Biologics has been contracted to
produce clinical grade material of Avesthagen’s biosimilars, which will
be used for human trials.
Vivo Bio Tech, a biotechnology company from Hyderabad, plans to set up
a biotechnology laboratory in Malacca, a state in southern Malaysia,
that will test medications for cancer and diabetes. Trial medicines
will be tested on dogs, primates and other animals. The company says it
plans to import beagles from Holland and capture primates from the
local area. The facility is a 630
Malaysia has no laws overseeing the testing on animals, the
Malacca State Chief Minister Mr Mohamad Ali Rustam is proud to have the
lab in his state.
Mumbai-based Actis Biologics, a biotech venture technology company
focusing on life sciences sector, plans to set up a biotech park called
Biocity in Melaka, for which it has been allotted 270 acres of land.
Biocity would provide buildings and other facilities for biotech
companies. It is talking to a few real estate developers and investors
to partner with the Biocity, which is at present on hold, due to real
estate issues, and after effects of economic slowdown. Actis is planing
to set up the first phase of Biocity, at an investment of 4500
Eyeing lucrative market
Malaysia is positioning itself as a cost-competitive country and a
regional hub for global biotechnology companies. It is drawing Indian
companies — with tax incentives such as 10-year tax holiday, duty
exemptions, customized incentives for large investments, access to
Association of Southeast Asian Nations (ASEAN) markets through Free
Trade Agreements, and no restrictions on equity.
Regulations in Malaysia are flexible and guidelines are evolving. This
provides a scope for early movers. The regulatory approvals for stem
cell research takes about seven months in Malaysia as against 18 months
in India. Besides, Malaysia’s membership of ASEAN and Organization of
Islamic Conference (OIC) provides scope of marketing products in the
member states of these associations.
Malaysian Biotechnology Corporation (BiotechCorp), the lead development
agency for the biotechnology industry has been showcasing initiatives
mooted by the government, and incentive schemes offered to companies,
in different countries including India. By participating in leading bio
exhibitions like Bangalore India Bio and road shows in Chennai and
Hyderabad, BiotechCorp has succeeded in drawing the attention of Indian
companies. While some companies have already made investments, others
including India’s leading biotech company, Biocon announced strategic
foreign direct investment (FDI) in Malaysia.
He further added “Malaysia hopes the Biocon investment will stimulate
growth for the sector, and provide commercial opportunities for
Malaysian biotechnology’s small and medium enterprises (SMEs).
Narayan Kulkarni in Bangalore