We also spoke with Kevin Lai, director of Singapore EDB’s Biomedical Sciences Division, about Novartis’ bio-investment in Singapore.

Contract Pharma: Tell me about your history with Novartis.
Kevin Lai: Novartis announced the facility here a few years ago, around 2007, but it had to be put on hold. In 2012, we jump-started the project, ironed out the details, and made the announcement of the new facility that October. We were very happy to reignite the project and bring this Novartis investment to Singapore. It helps to validate the confidence that pharma companies have in what we have to offer, especially, in the biologics area.

CP: How would you characterize those offerings?
KL: If you look at the history of Singapore’s biologics industry, we are a rather late entrant into the field. The first biologics plant here was built in 2007, by Lonza. Since then, we have secured eight new biologics facilities, which is quite a good track record. I think it’s attributable to a few factors:

1. I think companies are very comfortable with the quality of the people they can hire in Singapore. The talent has been trained well. Because we have a large base of companies making chemical API here, they were familiar with the processes and we were able to train them to work with biologics. We continue to work with companies to find out what will be needed in future, and we train in advance of that. Last year, we launched a program to train at least 200 to 300 positions ahead of time, to be ready for industry as it comes to Singapore. These will be in operations, microbiology, QA/QC, process technicians, etc.
2. Then there’s Singapore’s track record. Everyone recognizes that Asia is going to grow in the next five to 10 years, but the manufacturing capacity is largely absent from there. Companies recognize that the market is growing and that they’ll need to build capacity. When they look around, they see Singapore as the most reliable place to make that initial investment, both from the workforce and the infrastructure. It plays a very important role in helping them select a location.

CP: How does this Novartis investment fit into the picture established by those past biologics initiatives?
KL: It’s very complementary. As I said, we were a little late to this field, and we want to continue to grow and secure more biologics investment to help us build up a critical mass of manufacturing. We welcome Novartis — as well as Amgen, which announced a new facility in January 2013 — and continue to explore ways to work with companies to see how they can build operations in Singapore.

CP: How does Singapore fit into the Asian market?
KL: The market is growing very rapidly and companies are developing their market access strategies, figuring out how to allocate their resources and capacity to serve Asia. I think this is where Singapore has a big role to play, especially for companies that are making their first investment in Asia. Those companies tend to look for a location where the environment is predictable.

Beyond manufacturing, companies are also locating their commercial operations here. Singapore is unique in that, within the several hundred square kilometers of the city-state, one can host activities across the value chain: manufacturing, commercial and even R&D. (See Chris Snook’s Newsmakers Q&A for more on Novartis’ Institute for Tropical Diseases in Singapore.

CP: What’s the next step for Singapore?
KL: In the manufacturing space, we need to look at how we can better support growth in the region. Over time, as Asia market grows, we need to understand how Singapore can plug into the entire Asia-Pacific supply chain. We need to determine what role we can play as a technical support center for the manufacturing plants.

Also, Asia is fragmented and not as harmonized as, say western Europe. The environment is much more complex. We’re working closely with companies to figure out how best to maneuver in those markets, be it from a logistics point of view or regulatory or what have you. I think there will be a lot of opportunity for us to work with companies in understanding the region.

I think Asia over time will become a very rich sourcing location, whether it be for raw materials or talent or technology. There is a need for companies to look for a base where they can effectively manage this complex market, and that’s why an increasing number of companies are putting their commercial base here. It gives them a control tower from which they can coordinate their efforts in the market.

You probably won’t see a large concentration of activity in a single location in Asia, because of market diversification, but there will likely be those control towers, or hubs. Case in point: companies are setting up control towers for procurement, putting teams in a single site to work with suppliers for APIs, packaging materials and the like.

CP: What are the key growth drivers for biologics in Asia?
KL: The biologics industry in Asia is still relatively nascent. One of the big trends companies are looking at is how they can achieve capacity. They’re not quite ready to talk about outsourcing of biologics in this area, but we are predicting that that will become a trend, especially for smaller and mid-sized companies that won’t build their own facilities. This is one of the reasons we brought in Lonza at the very beginning. Their site offers CMO services, providing both manufacturing and process development to help with scale-up.

Over time, outsourcing for biologics will grow in this region. We’ve positioned ourselves by working with CMOs as well as CROs.

CP: What sort of client base are you expecting for those contract service providers? Western companies looking to get into Asia, or native Asian firms?
KL: There are very few Asian customers that have products ready to outsource, other than companies in Japan and perhaps Korea. So customers will be coming from the U.S. and Europe.

CP: Any other significant trends we should be looking for out of Singapore?
KL: From what we’re seeing, one of the big trends is doing R&D in Asia. We’re pre-positioning for that growth. I’m sure you’ve seen announcements about western companies setting up R&D facilities in Asia. From Singapore’s point of view, we recognize that the entire drug development value chain is very broad and we can’t handle every single part. So one of the niches that we identified is being a very effective proof-of-concept location for companies to undertake clinical and drug development work.

We’ve been gearing up Singapore as a virtual lab and a virtual clinical investigation unit for companies. This will enable them to bring compounds past a clinical milestone in seeing how drugs work within an Asian population. This can help them build a portfolio of drugs for the Asian market. That takes us back from biologics manufacturing to translational R&D.

R&D here will be very geared toward partnering, a sort of outsourcing model. Unlike the current model, where, say, chemistry is being outsourced to India and China, we’l see more of a risk-sharing model. Governments and groups like ours will have to work with clients to cushion some of the development risk in creating new compounds and building new drug portfolios. That’s another component of how we position Singapore toward drug research.  

Biographical Note Kevin Lai joined the Singapore Economic Development Board (EDB) in 1999. During his time in EDB, Kevin spent four years in New York as Center Director before returning to Singapore to head up the Medical Technology industry group. He was again posted to London in 2009 as the Regional Director for Europe. He took on his latest appointment on 1st April 2012.