South Koreans eye local bio investment

March 4, 2002 (San Diego Business Journal) - South Korean delegates got a warm reception from local venture capitalists, public relations executives and community leaders who could benefit from that nation's planned $7 million investment in a biotechnology park in Carlsbad.

Several South Korean political leaders and representatives of 25 South Korean-based biotechnology startups toured Carlsbad on Feb. 26 and concluded their two-day visit with a reception hosted by the San Diego Regional Economic Development Corp. in Downtown San Diego.

Norman Williams, assistant secretary for the state's Technology, Trade and Commerce Agency, said it's too early to say whether the South Korean plan will come to fruition, but he is hopeful.

"We wanted to give them a chance to talk to people about the potential for any business opportunities that would bring foreign investment to California," Williams said.

According to the agency, the South Korean government has set aside $380 million to establish 600 biotechnology-related ventures by the end of 2003 with a focus in the areas of genetic engineering, proteomics and bioinformatics. By 2010, the government investment is likely to grow to $1.8 billion.

In Carlsbad, the South Korean government is looking to create what they dubbed as "Korea BioValley," a business incubator to explore research collaborations and technology. transfer deals with San Diego-based institutions and companies, the agency reported.

Joseph Panetta, president and CEO of Biocom, the local industry association for the life science companies, applauds the South Korean government for taking the lead in what would become the first foreign-sponsored biotech park in San Diego.

It's still unclear how the South Koreans plan to invest the $7 million, he said. Panetta said $7 million is not enough cash to get a biotech park up and running. He speculated the South Koreans are more likely to buy into home-grown technologies and sign deals to enhance their own drug discovery efforts.

Kyung-Mok Park, director of the licensing team of Pohang, Kyungbuk-based GenoMine, envisions a local office to do just that.

Park, whose firm manipulates genes to delay the flowering process in plants, said he took the opportunity to discuss potential partnerships with the La Jolla-based research unit of Syngenta, a Swiss agricultural biotechnology firm.

"We need an office in San Diego to collect information on technology transfers and explore marketing opportunities," Park concluded.

Some people, however, worry that the advancement of South Korean interests could hurt rather than help the local biotechnology industry.

The McLean, Va.-based Office of the National Counterintelligence Executive, warned in an online report that South Korea's plan is part of a strategy to steal intellectual property. According to a spokesman, the office is an independent federal agency.

"Seoul's move to establish a high-tech 'liaison center' among the U.S. biotech industry parallels its successful efforts some five years earlier to comb Silicon Valley for information technology, a field where South Korea now enjoys some commanding leads," the counterintelligence office reported.

A media contact from the counterintelligence office said he wouldn't have anything more to say than what can be found on its Web site.

Yet local officials dismissed the implications of the report.

Panetta said biotechnology companies are by nature protective of their intellectual property, which is their livelihood.

Julie Meier Wright, president and CEO of the Economic Development Corp., which promotes economic growth through biotechnology investment, described the report as being "unfair."

She said California has some $100 billion in foreign investment and a significant amount of that money benefits biotechnology growth.

The visiting South Korean delegates, many of whom had heard about the report, focused their energy instead on establishing good relations.

Dr. Moon Hi Han, president and CEO of Proteogen and chairman of the South Korean delegation, told the audience at the reception: "We come here with goodwill and try to explore business opportunities with U.S. partners."

Keith W. Rabin, president of KWR International Inc., a New York-based consulting firm for Asian-related clients, said South Korea realized it can't grow its economy from home.

He said South Korea's ongoing investments in the high-tech and biotech sectors are part of a strategy to move their economy from low-cost production to value-driven products.

"South Korea has done lots of IT-related research and looks to do biotech as one area where they can establish and retain economic competitiveness on the value side," Rabin said.

In order to do that, they need a U.S. presence. San Diego, with its diverse technology base and intellectual prowess, offers South Korean early-stage companies a much-needed platform.

Park looks to Syngenta to lift his functional genomics research to the next level, but merely chuckled when asked about the report.

"It's a joke -- if we were spies we wouldn't give the American companies information about our companies -- we want synergism."

COPYRIGHT 2002 CBJ, L.P.