"A perfect storm" of complex macro and micro factors have forced the life sciences industry to re-examine traditional business models and location strategies, and "rebalance their portfolio of assets among regions of the world," according to a new Jones Lang LaSalle (JLL) study. Struggling economies, increased competition, pricing pressure, depleted new-product pipelines and heightened regulatory processes "have all strained profitability, influencing the industry's facility and location decisions," reveal the Global Life Sciences Cluster Report.
Major life sciences companies continue to center their headquarter relocations and biotech start-up/innovation activity in clusters within Europe, the U.S. and Japan, notes the report. However, "the emerging markets of Brazil, India, China and others throughout Asia and Latin America are becoming more competitive. Increasingly they are trying to balance their operations among the Americas, EMEA (Europe, the Middle East and Africa), and Asia Pacific."
The research shows that emerging market governments in Asia and Latin America are making significant capital investments. They also are improving political policies to become more competitive in high-tech aspects of the industry and be in contention for CRO opportunities. For example, "massive" research parks in these emerging global clusters are fuelling growth in R&D. Related highlights from the study reveal that:
- Biopolis, Singapore's largest research park, spans 2.4 million sq. ft. and has dedicated space for biomedical R&D and promoting collaboration between private/public scientific communities. "Among the emerging clusters, Singapore is best poised to increase its high-tech research presence based on its strong intellectual property laws, stable and industry-supportive political structures, and mature business environment that make the island-nation an ideal launching pad into other Asia-Pacific markets."
- Suzhou BioBay in China encompasses over nine square miles and offers innovation incubator and accelerator support. "In China, the government's five-year plan includes programs designed to stimulate growth in sectors such as biotechnology. These investments are paying off with several big pharmaceutical players expanding beyond manufacturing facilities by opening research operations in the country, the intellectual property risks being outweighed by the sheer size of the market."
- Butantan Institute in Brazil, a research development and training center, is the largest producer of immunobiologics and biopharmaceuticals in Latin America.
- In India, the study says companies already have made "significant headway in manufacturing generic versions of expensive drugs, showing they have the local skills to be globally competitive. The government hopes to expand beyond the country's strong generic and contract manufacturing presence into biosimilars and contract research."
- In Latin America, several countries are emerging as competitive clusters in agricultural biotechnology. "Infrastructure built around this sector could serve as a springboard into further developments in human-use drugs and biotechnology."
Although emerging clusters are playing a more prominent role in the global life sciences industry, the study states that "Europe, the United States and Japan are undoubtedly still world leaders in the sector, especially in the R&D aspects of the value chain."