"Bio USA 2026," the world's largest biotechnology event, recently closed. Unlike previous years, this year's event drew 350 Korean companies and featured 77 exhibition booths, drawing praise for the prominent presence of Korean firms. In particular, Korean bio and pharmaceutical companies received significant attention from global players, to the extent that the main conference featured its first-ever official session dedicated to Korea's bio industry, titled "Korea Rising."
The strengthening of Korea's bio industry status owes in part to expectations stemming from the United States' restructuring of its supply chain away from China. Indeed, the U.S. government is accelerating the bio industry's decoupling from China through the enactment of the Biosecure Act. Domestic contract development and manufacturing organizations (CDMOs) competing to expand production capacity reflect the same context. Lotte Biologics recently received approval to use its plant within its first campus in Songdo, six months ahead of schedule. Samsung Biologics will soon push ahead with expanding its sixth plant within its second campus in Songdo and will break ground this year to develop a third campus in Songdo. IDT Biologika of Germany, acquired by SK bioscience in 2024, is also coordinating plans regarding mergers and acquisitions (M&A) and production capacity expansion. Federico Pollano, chief commercial officer (CCO) of IDT Biologika, even acknowledged the K-bio halo effect, saying that opportunities to participate in global projects had surged sharply since the company joined SK bioscience.
By contrast, the situation for bio companies other than CDMOs remains barren. While K-bio appears to be enjoying its heyday on the surface—with the pharmaceutical and bio industry's technology export volume exceeding 21 trillion won last year—critics point out that the reality is little different from global big pharma, recognizing early-stage technologies, using their massive capital to buy up early-stage candidate substances at bargain prices. Even when they find candidate substances, the lack of capital to push them through Phase 2 and Phase 3 clinical trials drives them to hand them over to global companies at low prices and worry about survival. Stock prices could hardly be doing well either. Major bio stocks plunged nearly 30 to 35 percent through June after peaking in late March this year. The analysis is that as all the market's money flows toward artificial intelligence (AI) and semiconductor-related stocks, the physical limits of a K-bio facing a "capital drought" are being laid bare. Lee Sang-hoon, CEO of ABL, also pointed to the limitations of K-bio companies at the on-site Korea Rising event, saying, "Korea has many early-stage innovative technologies, but compared with China, it lacks the financial capacity to support them."
Now is the time for the government to step in directly and prime the pump. While it is important to induce bold investment in semiconductor production and to promise infrastructure support, policies to support bio and new drug development are also urgent. It is time to change the structure in which new drug development, blocked by the wall of enormous capital, is exported as technology at bargain prices in its early stages. In the United States, the bio economy's scale is said to exceed 5 percent of total U.S. gross domestic product (GDP). Earlier, the Joe Biden administration determined in 2022 that the bio industry's share of GDP and its ripple effects were high, fostering it as a core national industry by, among other measures, directing the Bureau of Economic Analysis at the Department of Commerce to measure the bio industry's share more systematically.
Korea, too, must launch focused support for bio, which is regarded as a future growth industry. Since it has only just begun to take its first steps, meticulousness in policy execution is sorely needed. For example, LigaChem Bio plans to enter Phase 3 clinical trials with 5 billion won—a direct investment from the National Growth Fund. Wait—the company plans to receive 500 billion won in direct investment from the National Growth Fund. The Phase 3-specialized fund the government is pursuing will be operated at a total scale of 150 billion won, combining 60 billion won in private capital after the government finalized its 90 billion won contribution. Yet even this has only just completed the announcement for a delegated operator to manage the fund. If the government fails to add the kindling to support the long journey of new drug development in time, it could face the troubling situation in which the seeds are sown but the harvest is taken entirely by global big pharma. I hope the government will consider ways to open a channel so that at least a portion of the excess tax revenue from the semiconductor boom can flow to the bio industry. It must not miss the golden time to ride the wave of the U.S. government's restructuring of bio supply chains away from China.
