"Bio R&D: Shift from Grants to Investment... First, End 'Spread-the-Wealth' Evaluations"

Mook Hyunsang, CEO of New Path Bio
"Investment approaches should differ by stage"

Experts say government research and development (R&D) support must shift from grants to investment if Korea’s pharmaceutical and biotechnology industries are to become globally competitive. They also say the selection and evaluation criteria should be revised to ensure that investment goes to companies with strong growth potential.

Newpass Bio CEO Muk Hyunsang, former head of the Korea Drug Development Fund, presents at the joint forum “Korea’s Next Engine: A Bio Revolution Connecting the Nation’s Future Growth,” held at the Koreana Hotel in Jung-gu, Seoul, on the 5th. Photo by Lee Seohee

Mook Hyunsang, CEO of New Path Bio and former head of the National Project for Drug Development, made the remarks while presenting proposals to expand investment to support growth in the biotech and pharmaceutical industries at the joint forum “Korea’s Next Engine: A Bio Revolution for the Nation’s Future Growth” at the Koreana Hotel in Jung-gu, Seoul, on November 5. The forum was jointly hosted by the National Economic Advisory Council, the Presidential Advisory Council on Science and Technology, and the National Bio Innovation Committee.

Mook said that Korean companies are trying to prove the value of their technologies solely through technology exports while leaving unfilled the late-stage clinical trial and approval phases, where the greatest added value is generated in the drug-development value chain. Emphasizing the need for a groundbreaking shift in investment practices, he proposed expanding biotech investment using funds such as the National Growth Fund and the Future Response Fund, converting R&D grants into investments, and introducing success-contingent loans.

He also called for changes to the selection and evaluation process. “Overemphasizing fairness in the current system inevitably leads to funds being spread around indiscriminately,” he said. “Even global big pharma companies invite experts from other countries to review investment targets. We need to change the system so that we, too, can have our projects evaluated by overseas experts with the necessary expertise.”

He also outlined investment plans for each stage of development. For Phase 2 and 3 clinical trials, he proposed concentrating investment through special purpose corporations (SPCs) on joint projects involving Korea’s five major pharmaceutical companies, small and mid-sized pharmaceutical firms, and biotech ventures. For toxicity testing and Phase 1 clinical trials, he suggested maintaining the current R&D support model, but recovering the full amount of government investment in cases of failure due to negligence or restricting recipients from applying for government projects for five years. At the early-stage discovery phase, he proposed giving universities and biotech firms broad opportunities, with KRW 100 million per year for two years, and providing KRW 50 billion annually to 500 companies.

On listing rules, he said the requirements for technology-based special listings on the KOSDAQ should be strengthened, rather than relaxed, to encourage companies to generate profits and pursue a regular listing or a merger and acquisition (M&A). He said that demands to abolish the requirement concerning losses from continuing operations before income tax expense were not appropriate from the perspective of individual investors.

“We have a market called KONEX. Companies that do not meet the standards should be sent there, and we should set aside leniency and take a hard-headed approach,” Mook said. “We need to reform the system so that funds are directed precisely to places with investment value.”

This content was produced with the assistance of AI translation services.