SEOUL, Feb. 3 (Korea Bizwire) – To help Korean pharmaceutical companies advance globally, and strengthen their competitiveness, the Ministry of Health and Welfare officially announced on February 2 the start of the second phase of the Global Pharmaceutical Industry Development Fund worth 135 billion won (US$123 million). The first such fund was launched in 2013 with 100 billion won.
The private sector has been reluctant to invest in new drug development, since the process is lengthy and time consuming, and the success rate is usually low. Under these circumstances, the Korean government has created funds to accelerate investment in the pharmaceutical sector, and help to foster a sound financial environment contributing to business growth.
In the second phase of the fund, the ministry disbursed 20 billion, while the remaining 115 billion won was raised from the Korean Development Bank, Korea Investment Partners (KIP), Korea Investment and Securities, the Industrial Bank of Korea and others. KIP will be responsible for managing the fund.
The ministry explained that the fund was designed to invest in cash-strapped mid-sized drug makers with potential drug development pipelines. Reflecting the long-term investment characteristics of the pharmaceutical industry, the fund will supply capital for eight years, with an additional two years as an option.
The main investment targets of the fund will be the technical cooperation of domestic pharmaceutical firms and M&A with foreign ventures, overseas sales networks and production facilities, global clinical tests, advanced production facilities certified by EU-GMP or cGMP and others.
An official at the health ministry said, “The pharmaceutical industry is a highly value-added industry with a large global market volume. Korean companies are capable of competing in the market. As the drug industry is expanding overseas, the fund will help Korean companies stand as world leaders in the industry.”
By John Choi (firstname.lastname@example.org)