The only function of economic  forecasting is to make astrology respectful,” J K Gaibraith of Harvard once said. So, I am not even going to try to make any forecast for the coming year. Rather, here is a wish list of things that the industry and I would love to see happen in the biotech ecosystem.

In a world that is evolving rapidly and somewhat shockingly, 2010 will definitely see a lot of change.
At macro level, China will certainly eclipse Japan by becoming the second-largest economy in the world. The US will struggle to stay ahead of the pack but will sharpen its innovative economy, including biotechnology, especially in the area of the “green economy”. India, for the first time, will see services and manufacturing overtake the agriculture sector.

All indications are that the Malaysian economy will continue to hobble along unless something is done to upstage our neighbours who have been outperforming us of late. We will move into the 10th Malaysia Plan (10MP), which will stretch from 2011 to 2015 and be structured on the new economic model that is based on innovation, creativity and  high value-add. Interestingly, our national biotech policy will move from “capacity building” to “commercialisation”.

The good news is that there are green shoots in the global biotech space. “As we head into the final months of the year, biotech is poised to close in on positive territory,” says G Steven Burrill, CEO of Burrill & Co, a San Francisco-based global leader in life sciences, with activities in private equity, venture capital, merchant banking and media.

“Although there is still some residual investor nervousness about the strength of the economic recovery, there is no doubt that the markets are back on track and the biotech industry will certainly benefit from this in 2010. Biotech is also benefiting from big pharma’s willingness to pay for its innovation. Partnering revenues have been a staple for many biotech companies throughout the year and, as a result, we are likely to see a record amount raised by US biotechs by the close of 2009,” he adds.

There is also some encouraging news and views in the local biotech space.
Locally, the party — of awarding BioNexus status and grants — is clearly over. Now, it is crunch time as all the awarded and invested companies now need to “prove their worth”.

I am putting together a wish list both as the CEO of a company that was awarded BioNexus status in July 2007 and the chairman of TeAM BIO — an industry grouping of companies in the Malaysian biotech space. TeAM BIO is an entity under the Technopreneurs Association of Malaysia or TeAM.

The industry would give Datuk Iskandar Mizal Mahmood and his team at BiotechCorp good grades for their performance in the first phase of the national biotech policy. There were some rumblings early on but these have since died down. Still, the real challenge lies ahead as they have to move the industry to the “next level”. It will require a totally new mindset and call for a new skill set.

The outcome would be different too. It would be about companies turning all that start-up activity into profits. It would be about companies spreading their wings and going global. It is about private ventures and public listings. It is going to be fun!

Unfortunately, BiotechCorp will also need to navigate politics as the biotech industry answers to a whole lot of ministries and agencies, including the Ministry of Science, Technology and Innovation, the Ministry of Finance, the Ministry of Health, the Ministry of Agriculture, the Ministry of Primary Industries, the Institute of Medical Research (IMR), the Malaysian Agricultural Development Institute (Mardi), the Forest Research Institute of Malaysia (FRIM), all our universities and rubber, pepper, rice and palm oil agencies.

Then, there are venture capitalists like Malaysian Technology Development Corp (MTDC) and Malaysian Life Sciences Capital Fund (MLSCF). Of late, a useful funder like Malaysian Debt Ventures (MDV) has emerged to fill the gap between early seed capital (sometimes called the 3Fs — family, friends and fools) and commercial bank financing.
The following are some of our wishes.

Discriminate and invest in likely winners
Already, some of the BioNexus companies are in trouble and some will fail, for whatever reason. BiotechCorp needs to take stock of the situation and focus its limited but critical resources on building winners in Malaysian biotech.
The likely winners are beyond grants and BioNexus awards. They are in need of “soft loans” and strategic as well as training support. They would benefit from mentoring, coaching and collaborations — both locally and internationally. The sad and unfortunate outcome of this is that the weak companies will be allowed to die. But that is what the survival of the fittest is all about.

Empower BiotechCorp
There are too many players on the biotech regulation and enabling scene. BiotechCorp is often caught in the “mushy in-between” that horribly defeats its “one-stop biotech agency status”. BiotechCorp needs to be empowered so that it can get on with the job of taking the biotech policy into the vital commercialisation space. Bureaucracy, with its  fighting, delays and doubts, could sound the death knell for the sector.
I have long championed the need to place BiotechCorp under the Prime Minister’s Department. This would take it out of Mosti, where it has to compete with other agencies, and place it where it would be easier for the agency to push the biotech agenda.  

Respect and support IP development
It is going to be increasingly about intellectual property (IP) in biotech. It is patents, trademarks, copyrights and all that stuff that Big Pharma uses to block competitors as it makes money out of its investments, with a monopoly on the IP.
But there is little incentive for IP protection in Malaysia. BiotechCorp should look at this because in reality, it is simply “rewarding the winners” in the capacity-building phase.

Move out of Malaysia
Malaysia is our comfort zone. It is nice. But is also small as a market — really small. In fact, it is 1/1000 of 1/1000 of the world market in terms of size. To grow biotech, we need to branch out. There are the booming nations of China and India. Even Indonesia is growing faster than us and is expected to become the world’s sixth-largest economy in the next 15 years!
Don’t rely on just Malaysia for talent, funding and equity. To venture beyond Malaysia, we need support and the network that BiotechCorp can provide.

Create biotech hubs globally
We need to create the infrastructure to move our companies globally. Hubs in the US, China and India would be a good start. I  think we should even look at Indonesia and Australia.

Work with Matrade
Taking us global is a big KPI for Matrade. It has already established missions in leading nations. We would get a better bang for our buck if we just leveraged Matrade’s network.

Fix funding
Money makes the world go round. It will certainly make Malaysian biotech get off the ground. Funding biotech is not cheap and it takes a long time too. That is why venture capital money is in short supply and there is always a need for more funds.
It is a key problem and keeps coming up at every seminar and meeting held by BiotechCorp. We need to look at some innovative ideas. Can BiotechCorp partner MDV, the SMEs and Bank Pertanian? What about soft loans? The ACE Market? Foreign funds?
The funds — though limited — are there. They just need to be targeted at areas where they are needed most, to give the biotech entities a much-needed boost.

Force BioNexus companies to work together
This is not easy. There is a lot of ego involved. Still, struggling companies can do better if we work together. We need to do a proper study of all BioNexus companies in Malaysia. Could some of them work together? Could they trade with one another? How about giving collaborating BioNexus companies a grant of some kind? That would certainly speed things up.
In these bad times, can there be mergers and acquisitions? Can we make them happen here?

BioNexus partner programmes
This is a great idea. Using the “excess and space capacity” of universities and research agencies for the industry is an old idea but one with many merits. BiotechCorp has even come in with funding support for those agencies. Still, we have not got off the ground and the many possibilities of this programme continue to “hang in the air”.

Destroy bureaucracy
The interphase between government and industry has always been hampered by our famous bureaucracy. The late Tan Sri Nordin Sophie once told me that “the British invented bureaucracy, the Indians perfected it and we Malaysians are fine-tuning it”. This is a sad but very apt description of the state of affairs. In many ways, I find that the country is very dysfunctional. It is most unpleasant from an industry point of view.
This has to stop. Something needs be done. Leadership is needed.

Curb corruption
This is the horrible tumour that is in your face if you are in business in Malaysia.
I looked up the word “corruption” in Wikipedia. Here is how it is described:  “The word ‘corrupt’ (Middle English, from Latin corruptus, past participle of corrumpere, to destroy: com-, intensive pref. and rumpere, to break), when used as an adverb, literally means ‘utterly broken’.”
Wow! That is what we are in many ways. The money allocated for lots of projects (not just biotech) never reaches the intended. Words like “leakage”, “spillage” and “consultancy fees” come to mind. It is not just when there is money movement. Officials now expect “sweeteners” prior to approvals.

This is a grave danger as we move into the 10MP or the next phase of the Malaysian biotech policy. The world is moving fast. Right now, it is moving faster than us and we are in trouble. Corruption is not good for biotech or the country. It will foil our attempts to lure foreign investment as well.
Corruption will destroy our country.

It will take away the future of our children. We need to do something. This is a challenge for all of us. We need to fight this “cancer” as a nation. We need to stop talking about this. We need to act. There is a great need for enlightened and firm leadership.
On a less depressing note, Malaysian entrepreneurs are optimistic the next phase of the biotech industry is going to be fun. I look at capacity-building like a pregnancy. Now that the nine months are over, it is time to deliver the “baby”. It has gone beyond sowing to harvesting. This is the real deal. Let us go for it. Let us all have some fun and show that Malaysian Biotech Boleh!

Datuk Dr Rajen M is managing director of Holista Colltech Ltd, a biotech firm listed in Australia

This article appeared in netv@lue2.0, the technology section of The Edge Malaysia, issue 788 jan 11 - 17 2010