Taiwan offers advanced pharmaceutical manufacturing potential
The small island nation of Taiwan has high potential as a pharmaceutical manufacturing site. Its highly skilled workforce speaks the same language as its neighbor, China, but Taiwan has comparatively more capacity for high-value API biologics and injectables for its size. Taiwan has 59 pharmaceutical contract manufacturing sites, including 44 with European Medicines Agency (EMA) or FDA approval, and seven sites with Chinese approval.
Taiwan has a relatively low COVID-19 infection rate but has so far failed to secure the vaccine supplies it has ordered. In July 2021, Taiwanese high-tech giants Foxconn and Taiwan Semiconductor Manufacturing Company (TSMC) donated 10,000,000 doses of the COVID-19 vaccine Pfizer (New York, NY, United States) -BioNTech ( Mainz, Germany) to their government, which ended a dispute between Taiwan and China over Taipei’s purchase of anti-coronavirus drugs.
In July 2021, a controversy rocked the Taiwanese pharmaceutical industry when the US Department of Justice announced the indictment of two co-founders of Taiwanese biopharmaceutical company JHL Biotech (Taipei, Taiwan) for allegedly stealing trade secrets from Roche. Holding AG (Basel, Switzerland) Genentech Inc. (San Francisco, California, United States). The indictment against former JHL CEO Racho Jordanov and former COO Rose Lin accused them of stealing thousands of Genentech documents to create biosimilars from Genentech biologics and defraud its intended manufacturing partner, French drug maker Sanofi (Paris, France), out of $ 101 million.
Taiwan is a small country with an area of around 36,000 km², with mountainous areas making up two-thirds of the island. Its 23,500,000 citizens live in densely populated areas, and this population density is the reason why facilities are concentrated in certain places. The majority of pharmaceutical manufacturing plants in Taiwan are located either in Tainan, a city on the southwest coast of Taiwan, or around Taiwan’s capital, Taipei, in the far north of the country. They are particularly concentrated in Taoyun and New Taipei (see Figure 1). There is a very noticeable absence of pharmaceutical manufacturing in the easternmost counties, as Pingtung, Taitung, and Hualien have no sites registered with the FDA or EMA. Even Yilan, which borders New Taipei, has only one manufacturing site, owned by Sinphar Pharmaceutical Co Ltd (Dongshan, Taiwan).
Taoyuan owns the largest number of pharmaceutical manufacturing facilities in special municipalities and covered counties, accounting for 30% of all sites. The majority of these sites offer the production of API chemicals, 46% offer the manufacture of commercial doses, and one site operated by Formosa Laboratories Inc (Taoyuan, Taiwan) offers API biologics (proteins and peptides) and commercial injectable doses. . Tainan has the second highest number of facilities and also contains two facilities with capabilities of API biologics (proteins and peptides).
Potential for mergers and acquisitions abroad
There is a lack of international pharmaceutical companies and contract manufacturing organizations (CMOs) in Taiwan. In total, 55 of the 58 pharmaceutical manufacturing companies with facilities in the province are headquartered in the country. The three companies with international headquarters are Seven Star Pharmaceutical Co Ltd (Nakhon Pathom, Thailand), SGS Life Science Services (Geneva, Switzerland) and Tanvex BioPharma Inc (Grand Cayman, UK). Most of the facilities owned by these three companies are based in the north of the country, around Taipei, and include biological API manufacturing offerings and analytical services. Three Taiwan-based manufacturing companies namely UBI Pharma Inc (Hsinchu, Taiwan), Lotus Pharmaceutical Co Ltd (Taipei, Taiwan) and ScinoPharm Taiwan Ltd (Tainan, Taiwan) have overseas-based parent companies. One of these parent companies is based in China and two are based in the United States.
Most of the FDA or EMA approved facilities (75%) in Taiwan are owned by companies with a single site in the country, indicating the great potential for merger and acquisition (M&A) of the pharmaceutical industry in Taiwan. region. Chirogate International Inc (Taoyuan, Taiwan) has four facilities in Taoyuan, all of which are involved in the manufacture of API chemicals. Savior Lifetec Corp (Jhunan, Taiwan) and TTY Biopharm Co Ltd (Taipei, Taiwan) each have three facilities in Taiwan, most of which have commercial dose manufacturing facilities. In addition to a large number of API chemical facilities, which are typical of this region, there are higher value added services, including 21 commercial dose injectables and 13 API biologics sites. The Taiwanese population speak Chinese, are better able to cope with the demand of Chinese clients / investors, and are highly educated. College or university graduates make up almost half of Taiwan’s adult population, so the local workforce can support complex manufacturing service offerings.
Given that Taiwan has a well-educated Chinese-speaking population, the lack of Chinese-headquartered companies with a facility in the country is surprising, especially since four Taiwan-based companies have facilities in China, but is linked to the complicated political relationship the two countries share. More international investment is needed and the absence of foreign companies is particular given the skilled workforce and high value-added service offerings present at manufacturing sites in Taiwan. Still, major international contractors are absent, possibly due to political tensions between Taiwan and China. Conflicting views regarding Taiwan’s status as part of China and / or as an independent entity have caused growing tensions between the island and the mainland, and the dispute over Taiwan is likely to straining US-China relations in the future. Beijing is ultimately seeking the unification of Taiwan with the mainland, and there will be no economic future for Taiwan that is not connected to China.
Taiwanese CMOs have shown limited interest in acquiring international production sites. Bora Pharma (Taipei, Taiwan) acquired a facility based in Mississauga, Ontario (Canada) from GlaxoSmithKline (Brentford, UK) in December 2020.
Supply to US and EU
Taiwan is a relatively important supplier to the US and EU markets. Only 15 sites are without EMA or FDA approval, compared to 44 with these approvals from regulatory authorities. The majority of installations supply the United States, but much less supply the EU. Only seven sites have the regulatory approvals to supply China with much more, and 34 sites have the approvals to supply Japan.
In the future, the pharmaceutical manufacturing sites in Taiwan may diversify the drug supply countries to reduce the risks associated with specific markets and increase sales, as currently a significant proportion of sites are licensed to supply the drugs. United States but not the EU. Obtaining additional facility approvals in the future to supply both China and the EU will increase manufacturing opportunities and the prospect of securing additional contract manufacturing service agreements. China’s domestic pharmaceutical market will experience substantial growth and the increased supply to Europe will also benefit manufacturers. The United States and Taiwan enjoy strong informal relations and close cooperation on a wide range of issues. Maintaining strong and informal relations with Taiwan is a declared major objective of the United States.