The Export-Import Bank of Korea is stepping up support for domestic pharmaceutical and biotechnology companies including Chong Kun Dang, BTGen and Dongwha Pharm. The state-run lender had provided about 1.5 trillion won ($1.1 billion) to the sector by early September and is on track to exceed 2 trillion won for the first time in a single year.
The bank recently extended 50 billion won in new research and development funding to Chong Kun Dang, financial industry sources said on the 30th. The drugmaker consistently invests about 10% of its revenue in R&D. The lender expects the company to expand exports through overseas sales of new drugs once commercialized and through licensing deals for core pipeline assets.
This year the bank also supplied 50 billion won in production and sales funding to BTGen, a contract manufacturing organization specializing in biopharmaceuticals. BTGen, a mid-sized company that has won manufacturing and quality control approvals from U.S. and European drug regulators, is pursuing entry into new markets and expanded overseas orders.
The bank has also backed drugmakers' overseas distribution networks and raw material sourcing. It provided 5.5 billion won for Dongwha Pharm's expansion in Vietnam, where the company acquired an additional stake in TS CARE, operator of the Vietnamese pharmacy chain Trung Son Pharma. Kwangdong Pharmaceutical has access to a 40 billion won credit line for importing raw materials used in over-the-counter and prescription drug production.
Support has grown as the bank offers one-stop financing covering everything from R&D through production and exports. Disbursements to the pharmaceutical and biotechnology sector reached 1.9073 trillion won last year, up 22.8% from a year earlier. That is nearly double the 989.2 billion won disbursed in 2020. Through Sept. 10 this year, the bank had disbursed 1.4939 trillion won.
"Based on a review of pending financing cases, we believe this year's support could top 2 trillion won," a bank official said.
The lender is focusing in particular on small and mid-sized companies with relatively limited access to capital. Of this year's disbursements, 1.1011 trillion won, or 74% of the total, went to smaller firms. Last year the bank provided 1.2422 trillion won to the same group.
The bank has designated advanced industries including biotechnology as a key target for medium- and long-term financing. In a business plan announced in February, it pledged 50 trillion won over the five years from this year through 2030 to develop advanced industries such as semiconductors, biotechnology and secondary batteries. In pharmaceuticals and biotechnology, it plans to support upgrades and capacity expansion at biopharmaceutical production facilities at home and abroad, in line with growth in the global contract development and manufacturing organization market. It will also increase funding for technology development aimed at blockbuster drugs.
The expanded financing aligns with the government's push to build up the country's biotechnology sector. In September last year, the government set out a strategy for a leap forward in the pharmaceutical and biotechnology industry, targeting a doubling of biopharmaceutical exports, the creation of three blockbuster drugs and third place globally in clinical trials by 2030. Support for contract development and manufacturing and faster innovation-driven growth through links among technology, talent and capital are the core tasks.
Overseas sales by domestic pharmaceutical and biotechnology companies have risen alongside the expanded support from the government and state-run banks. Biopharmaceutical exports in the first half of this year came to a preliminary $4.5 billion, up 15.3% from a year earlier and the highest first-half figure on record, according to the Ministry of Food and Drug Safety. Total pharmaceutical exports last year rose 12.4% to $10.438 billion, topping $10 billion for the first time. Biopharmaceuticals accounted for $7.64 billion, or about 73% of the total.
"The pharmaceutical and biotechnology industry is a leading future industry that needs policy financing across the entire cycle, from R&D through production and exports," a bank official said. "In step with the government's strategy to make the country a biotechnology powerhouse, we plan to expand financing across that full cycle. We will steadily add to our various support programs."
