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09 CeoMeeting- Keynote 09 CeoMeeting- Keynote Presentation Transcript

  • Innovation in the Emerging Biobased Economy Roger Wyse Co-Chairman MLSCF Managing Director Burrill & Company “ Innovation Without Boundaries” CEO’s Life Sciences Conference
  • Presentation Outline
    • Malaysia’s Innovation Driven, Knowledge Based Economic Growth Strategy
    • Why is innovation important?
    • What are the future drivers of innovation
    • Opportunities
    • Keys to success
  • Messages
    • Just as Malaysia has done in the past (Oil palm, Rubber, Teak) it must now look globally for innovation that will drive it to achieve developed nation status in 2020.
    • Future innovation will be driven by global megatrends leading to a “Green Economy”.
    • The life sciences based technologies will be major contributors to addressing the challenges
    • The market opportunity is large, some estimate 25% of global GDP.
    • Thus the theme of this meeting and the potential partnership embodied in this audience
    View slide
  • Just Two Years Ago: Malaysia Endorsed An Economic Growth Strategy Based On Innovation View slide
  • Strategy recognized need to invest locally but access globally Indeed the Biotechnology Policy based on the same principle had been implemented a just one year earlier
  • Why is Innovation Important?
    • Drives economic growth
    • Creates jobs
    • Creates wealth and social well being
    • Addresses societal therefore market needs
    • Enables flexibility to address emerging needs
  • Future Innovation Drivers – Back To Basics
    • Food security
    • Energy security
    • Global climate change
    • Sustainability
    • Needs of an aging population
    • Large Growing Markets: India & China
    • Necessity is the Mother of Invention
  • Get Creative: Why Green Innovation is the Key to Business Growth--Even in Tough Times by Andrew Winston Harvard Business Review August 2009
  • A $100 Billion Plus Revenue Industry, 2009 $89 B $22 B $8 B A $260 Billion annual investment in Life Sciences
  • By 2030 the “green economy” is projected to represent 25% of global GDP
  • Food Security We have options: Agriculture Biotechnology Increase productivity Reduce inputs, improve nutritional value Reduce environmental impact
  • The Demands for Agriculture on Increasing Index (1970 = 100) Freshwater ecosystems Source: United Nations, 1999 More food and now fuel on less land with half the water 100 90 80 70 60 50 40 1970 75 80 85 90 95 99
  • The Future Of Ag Inputs Is At The Intersection Of Breeding And Trait Technologies Breeding Biotech Traits
    •  productivity (complex)
    •  reliability
    •  quality
    • Integration of native and biotech traits
    Seed is the carrier of genetic information
    • Pest protection
    • Stress alleviation
    • Superior nutrient use
    • Enhanced nutrient density
    • Elevated safety
    • Processor friendly
    • Pest control
    • Nutrition
    • Growth regulators
    Gene Gun Agrobacterium Nearly 150 M Acres Not in Corn Cultivation ! Corn Yields U.S. Average Bu/Ac Biotech
  • Biotech crop cultivation continues to grow Trait Hectare Growth: 22 Percent from 2006 to 2007 118 Mha to 144 Mha Cumulative biotech crop acres: 2 Billion Acres, reached in 2008 55 million farmer decisions 13+ million farmers cultivated Biotech crops in 2008 11+ million resource poor farmers
  • High Yield Trait With Trait Without Trait Average Soybean Yield Advantage Over Control
    • Key Features:
    • Improves farmer productivity
    • Enables current ag hectares to supply increased global demand for calories, oil & protein
    Nitrogen Response Rice With trait Without trait Enhanced Yield & Nitrogen Response
  • Source: Cotton Corporation of India Technology Has Reshaped Cotton Farming And The Textile Industry Of India Hybrids Biotech Indian Bt cotton acreage for 2008 - 80% of Hybrid market! Bollworm/Budworm sprays reduced from 5.9 to 1.4 Total insecticide costs reduced Lint yield increased by 37 lb. per acre 60 M jobs in India Dependent on Cotton
  • Near to Market Traits
    • Increased yield
    • Drought tolerance and water use efficiency
    • Nutrient use efficiency
    • Increased spectrum of pest and disease resistance
    • Gene stacking technologies that will reduce cost and time to market of complex trait combinations
  • Big Opportunity In Palm
    • Foundation for accelerated genetic improvement in place
    • Increased productivity per unit land – key to sustainability
    • Reduced inputs
    • Increased down stream value
  • Energy Security
  • European View of Energy Security EU
  • US View of Energy Security
    • Geopolitical unrest wherever oil is produced
    • Extreme weather demonstrated the vulnerability of supply
  • Renewable Biofuels, Materials and Chemicals Increased recovery of oil We have options: Industrial Biotechnology
  • Biomass sourced fuels are expected to take 12-14% of the global gasoline market by 2015; 25% of by 2030 Big oil is investing Shell Chevron ExxonMobil Dupont ConocoPhillips Totale Petrobras
  • Biomass is Key to a Sustainable Future
  • Future of Non-hydro Energy Generation is Biomass EIA-Annual Energy Outlook 2009. Early Release
  • The Biomass Feed Stock is Key
    • Investment Opportunities
      • Increased productivity
      • New Energy Crops
      • Conversion technologies
      • Fermentation Products
      • Carbon sequestration
      • Technology integration & adaption
    Food Feed Renewable Feedstocks Enhanced Yields Lower Inputs Energy Crops Conversion
  • A Bio-Refinery Industry is Emerging Petrochemical Industry Fuels: Gasoline, diesel Chemicals Materials Feedstocks and intermediates Crude oil and natural gas Hydrocarbons Biobased Industry Plant biomass and wastes Sugars, oils, etc. Fuels Bulk and Specialty Chemicals Biofuels: Alcohols, Alkanes Biodiesel BioChemicals BioMaterials Concept is not new, 100’s of biorefineries currently are in operation
  • White biotech (biofuels/industrial biotech and other) sales expected to grow significantly and increase share over the next 5 years… White biotech Sales chemical industry*
      • Market growth; process conversion; new bio-based ingredients
      • Growth with customer markets; new applications
    Assumptions * Current chemical industry sales excluding B2C sales in pharma and personal care ** Top-down estimate based on industry interviews Source: SRI, FO Licht, Frost and Sullivan, Press clippings, McKinsey EUR billions 100% = EUR 1,300 billion
      • Increase share of oleo vs. synthetic surfactants but decreasing prices
      • Moderate growth in new products/services
      • Continuation of current very strong growth in biofuels
      • Moderate growth in hydrocolloids, strong growth in botanicals
      • Increasing use of biocatalysis and higher share of biologics
      • Moderate penetration of new bio-polymers and bio-based bulk chemicals
    Bio-dependent sales 2010 Segment Biofuels Pharmaceutical ingredients Bulk/polymers Food/ feed ingredients Oleochemicals Enzymes Others Total Bio Plant extracts 42 23 20 15 11 8 4 2 125 90 50% Of Growth In $1 trillion Chemical Industry 2005 basis 2005 - 10 growth
  • Obama driving a Green Economy
    • Increased research funding
    • Incentives for use of renewables
    • Subsidies
    • Loan guarantees
    • Conducive policies and regulations
    • Cost effective opportunity for Malaysia:
    • Adapt to Malaysia markets
  • Synthetic biology offers exciting prospects Example: Microbial synthesis of artemisin
  • Algae is Hot !! Near Term - could be in Carbon Capture
  • Advanced biofuels & Second Gen Feedstocks
    • Biobutanol Potential
    • Renewable
    • Improved performance (higher energy, lower VP)
    • Compatible with current systems
    • Cost competitive
    • Energy security
    • Building block for other fuels, chemicals
  • Opportunity for Malaysia The Palm Biorefinery Long – Term Opportunity: 5 – 10 years FFB CPO Fertilizer Biofuels, Chemicals, Materials Sugars Fermentation Units Fertilizer Plantation Specialty Chemicals Plantation Fronds Trunks Biorefinery
  • The Future Is Bright But Must Be Entered Carefully Energy Security Global Climate Change Drivers of a Green Economy Context for Development Food Security Sustainable Agricultural Production Food Biomass Biorefinery
  • Healthcare Biotechnology
  • Targets of opportunity
    • Healthcare
      • Personalized medicines and delivery
      • Infectious disease
      • Diagnostics
      • Clinical trials
  • The Three Forces Shaping the Evolution of Healthcare
      • Source: George Poste
    access, cost and quality of care proficient use of information (e.health) molecular and personalized medicine
  • Longer Term Risk Assessment (prediction) Driving to Prevention:
    • Genome wide association studies not just BRAC 1&2
      • Navigenics
      • DeCode
      • 23andMe
    • Shorter term, high accuracy risk assessment/clinical support tools
      • Proventys
      • Labcorp
      • Quest
      • Roche
      • Genomic Health
      • XDx
      • CardioDx
    Right Drug, Right Disease, Right Time Predisposition
  • Pharma is looking to diagnostic partners to support their therapeutic activities Pharma Diagnostic Partnership Deals
  • Big “New” Markets
    • Alzheimer's/memory
    • Obesity/diabetes/metabolic disease
    • Anti-aging
    • Anti infectives (antibiotic resistance)
    • Wellness (preventative/predictive cure)
  • Overall Indexed Clinical Trial Costs Major Cost Factor in Drug Development Malaysia should be high value not low cost option
  • Out-sourcing / off-shoring
    • Out-sourcing
      • Subcontracting to a third-party company
    • Off-shoring
      • Relocating business processes from one country to another
    • Is it happening?
    • YES!
  • The Case for Wellness
    • Global functional foods market expected to be $167B by 2010, growing 14% annually
    • Global nutraceuticals market $228B in 2007 – unreimbursed!
    • 30-60% of health plan claims are related to health risks that are modifiable by nutrition, exercise, stress reduction, etc.
    • Well-managed employer health and productivity management programs return $6-15 for every dollar spent
    • Cost of smoking: healthcare cost of smoking over a lifetime $220K per person = $40 in healthcare cost per pack of cigarettes smoked!
    • 67% of the US population is overweight or obese, and 12% of healthcare costs are obesity-related
    • Source: Wellness Councils of America
  • The Obesity Epidemic % Overweight and obese in adults 20-74 years old 0 10 20 30 40 50 60 70 1960- 1962 1976- 1980 1999- 2000 2003- 2004 Overweight Obese
  • Opportunities for Malaysia
    • Healthcare delivery (monitoring) – leverage ICT
    • Clinical trials – multi ethnic population, value added genotyping possible
    • Manufacturing of Biologicals
    • Diagnostics – leverage design, engineering, mfg
    • Re-purposing of drugs for the Asian markets
  • It Is All About Commitment, Persistence, And Execution Timing is now; Markets are open Valuations are attractive Technology is ready
  • Key Elements of Success Policy Regulatory Research Talent Capital Infrastructure
  • San Diego’s High Tech History 1955 - General Atomics 1956 - Scripps Clinic & Research Center 1960 - UCSD Founded 1963 - Salk Institute 1968 - Linkabit 1978 – Hybritech 1985 – UCSD CONNECT and Qualcomm Founded 1990-93 – 63,000 Jobs Lost 1995 – New Boom Need an Acceleration Strategy: Organic is too slow! 1960 1970 1980 1990 2000 Series of Catalytic Events VC Funding
  • Need To Invest Locally But Access Globally Adapt The “Open Innovation” Strategy Of Innovation Driven Corporations
  • The Innovation Path Capital Efficient, Quicker, More Flexible Basic Research In Market Applied Research Proof of Concept Development Commercial Launch Global Innovation Pathway Execute in Malaysia Access Globally
  • Short Term Strategy Next 5 Years A Market Driven Strategy
  • Medium Term Strategy 5 – 10 Year Horizon A Market Informed, Technology Enabled Strategy 2009 - 2017 Define New Markets where Malaysia can have a sustained competitive advantage. Evaluate and access innovation early that will position Malaysia in future market areas with a sustainable competitive advantage Basic Research In Market Applied Research Proof of Concept Development Commercial Launch
  • Action Plan
    • Integrate global innovation with Malaysia’s Sustainable Competitive Advantages
    • Translate basic R&D investments in EU and US into applications in Malaysia – Invest in targeted translational R&D
    • Set Policy Targets – Ex. – US RFS
    • Invest globally in innovation rich companies starved for capital ; in return get rights for Malaysia , operations in Malaysia, partnerships with Malaysian companies and institutes
    • KEY: Build a streamlined system for bringing the technologies back to businesses in Malaysia
  • Messages
    • Just as Malaysia has done in the past (Oil palm, Rubber, Teak) it must now look globally for innovation that will drive it to achieve developed nation status in 2020.
    • Future innovation will be driven by global megatrends leading to a “Green Economy”.
    • The life sciences based technologies will be major contributors to addressing the challenges
    • The market opportunity is large, some estimate 25% of global GDP.
    • Thus the theme of this meeting and the potential partnerships embodied in this audience
  • Enjoy the next two days, network, explore opportunities Great opportunities exist in this room
  • Thank You “ Innovation Without Boundaries” CEO’s Life Sciences Conference Malaysian Life Sciences Capital Fund www.mlscf.com