Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Four Emerging Taiwan Drug Developers

Taiwan’s drug makers have largely focused on generics; few are in the business of developing novel medicines. This is partially due to the large resources required for such an endeavor combined with Taiwan’s small market potential. To justify the costs of developing a new drug, companies must have the ability to navigate across borders in the hopes of selling their drugs in far larger markets. Few have this capacity.

Of the ten largest drug manufacturers in Taiwan, four are publicly traded, none of which are drug developers. The largest of these, Yung Shin Pharma Industries, sells products ranging from generics to cosmetics, and has a market cap of over $8 billion. The other three are China Chemical & Pharmaceutical, Standard Chemical & Pharmaceutical, and Sinphar Pharmaceutical. The first two are makers of generic drugs and the latter makes Chinese herbal medicines and nutraceuticals.

Let’s take a look at four companies that have made the leap. All are private, all are drug developers, but each does drug development slightly differently. These are some of the leading edge biotechs in Taiwan, helping to reshape the industry.

TaiGen Biotech resembles a US biotech in that it is a pure-play drug developer. It has two compounds in US clinical trials- Nemonoxacin (TG-873870), an antibiotic licensed from Proctor and Gamble for the treatment of community acquired pneumonia and diabetic foot infections is in Phase II, and internally discovered TG-0054, a CXCR4 antagonist, is being tested in certain cancer indications. The company is well capitalized, having raised $37 million from investors in January 2009. It has operations in the US, China, and Taiwan.

TTY Biopharm remade itself from a generic drug manufacturer and distributor into a global company with a focus on developing new drugs. Founded in 1960, it slowly improved its technology over the decades through technology transfers from western pharmaceutical companies. It later partnered with then tiny Taiwan Liposome Company to develop and sell Lipo-Dox in 1997, transforming itself into a seller of branded generics. It now continues to partner with early stage companies in their drug development, providing technical resources and financial support.

AbGenomics has an early stage pipeline of antibody therapeutics. Its most advanced product, AbGn-168 targets CD162 on activated T-Cells and has been licensed to Boehringer Ingelheim and is in Phase I testing for the treatment of autoimmune diseases. AbGenomics’ other candidates are all preclinical and oncology focused. It seeks to partner its products either after the preclinical or Phase II stage. The company has offices in both the US and Taiwan. 

Taiwan Liposome Company (TLC) began operations in 1997. It focuses on developing novel liposome formulations of off-patent drugs, improving its performance by reducing the drug’s toxicity, improving its stability, targeting its delivery. With its technology, it has developed Lipo-Dox, licensed to TTY Biopharm for sale in multiple Asian countries. It has also built a pipeline of newly formulated drugs in various stages of development. TLC has a US office driving the development of its compound, Lipotecan- a novel Topotecan analog in its proprietary liposome formulation. The compound is in Phase I studies.

Since the 1980s when the Taiwan government deemed biotech to be an important to the country, billions of dollars have been poured into industry. Industry however, has been slow to take root. We may have reached an inflection point. Generic drug companies have saturated the market, forcing drug makers to look for profit farther up the value chain. The large number of contract research organizations is now allowing small companies with nothing but an idea to outsource nearly all the necessary research, even conducting studies overseas.

This set of four companies represents just the first wave of innovative biotechs coming out of Taiwan. 


Disclosure: No Position