Bernama.com (Malaysian National News Agency), 06 December 2006

Uncertainty Hampering Development of Biotech Products

KUALA LUMPUR, Dec 6 (Bernama) -- A lack of understanding and uncertainty in the commercial viability of products are some of the factors hampering the development of biotechnology sector in Malaysia, says the Malaysian Technology Development Corporation (MTDC).

Its investment director, Prof Dr Mohd Azmi Mohd Lila, said the lack of understanding and weakness in business and financial planning have caused many venture capitalists to stay away from investing in some biotechnology companies.

"Some of the companies who come to us with proposals, do not even understand the product that they have chosen to commercialise. In the end, some of these companies collapse after one or two years of operation," he told Bernama on the sidelines of BioMalaysia 2006, which was held here Wednesday.

Dr Mohd Azmi, who was a panellist in one of the parallel sessions at the conference, earlier presented his paper entitled `Why Should Venture Capitalists Invest in Life Sciences and Biotech Ventures?'.

He said entrepreneurs who want to venture into the biotechnology sector must first equip themselves with necessary knowledge to enable smooth process of commercialisation of biotech products.

To develop any biotechnology product it would involve longer timeframe in terms of research and development (R&D) as well as long-term investment.

Venture capitalists who get involved in such projects would need the assurance from the entrepreneurs that their investments will be granted returns in the long run.

"It is vital for the entrepreneurs and venture capitalists to have better understanding on the partnership that they have. This is to ensure that the business operation will run smoothly," he said.

During the presentation, Dr Mohd Azmi said the growth in biotechnology sector was underpinned by the need to improve the quality of life and the strive to live longer by harnessing the cumulative knowledge in various fields covering healthcare, biotechnology and medical sciences.

For example, in the United States healthcare as a proportion to the gross domestic product (GDP) has reached 20 percent at US$1.2 trillion a year and is expected to double in the next five years.

-- BERNAMA