UPDATE ON THE BIOECONOMY GRAND CHALLENGE

Portfolio Committee on Science and Technology

22 February 2012Research, Development and Innovation

Outline

1. Overview: From Farmer to Pharma Grand

Challenge The National Biotechnology Strategy

2. A case for the Bioeconomy Strategy3. Update on Bioeconomy Grand Challenge4. Towards a RDI Strategy to Strengthen the

Bioeconomy5. Conclusions

From Farmer to Pharma

Value-chain to strengthen the bio-economy; Sought to explore the country’s biodiversity using both

the Indigenous Knowledge Systems (IKS) and biotechnology for socio-economic benefit

Biodiversity

…without IK 1:5000 …with IK 1:2

PaclitaxelPacific Yew Bark

Active Compound

bioprospecting

http://en.wikipedia.org/wiki/Taxol

Biotech/IKS

Expected Outcomes by 2018...

Globally competitive pharmaceutical industry; Functional technology platforms to facilitate diagnostics and

medical solutions (Pre-Clinical Drug Development); Funded centres of competence in top five national health

priorities (HIV and AIDS, TB, Malaria, Diabetes, Cancer); Increased foreign-direct investments in health-related R&D; Functional technology platform for agricultural biotechnology; Strengthen animal vaccine R&D as well as production; Functional Biosafety Platform to provide regulatory guidance

and support; Functional bioprospecting platform (IKS).

Farmer to Pharma

Clinical trials (DoH)

Bioprospecting(Discovery, adaptation, validation)

Commercialization(BRICS / TIA) (DTI)

Preclincal

tests

Biotech IKS

Farmer

Phytomedicine & botanicals

Food & nutraceuticals

Industrial biotech

Pharma

Farmer to Pharma Concept

Outcomes span the whole spectrum of the bio-economy (health, agriculture and industry) but the focus on the concept is limited.

Agricultural biotech and food security Industrial development and environmental sustainability; Clear outputs from health innovation platforms; Institutional arrangements and coordination for

maximum impact.

Grow the bioeconomy and create social value;

Harness biotech innovations at the downstream end;

Regional agenda through the former Biotech Innovation Centres;

Harvesting without replenishing not sustainable;

Investment in the entire innovation value chain.

Outputs from the National Biotech

Strategy

Outputs of the BIC’s (2002-09)

DST inputs: >R900 millionOutputs: 124 investments:

Investments over 31 companies, ~ 15 technology platforms, > 70 projects funded Resulting in total offering of 221 products and 142 services.

> 900 new jobs created; > 400 bursaries/study support; An additional R250 million – R500 million leveraged

from external sources.

Instruments of funding from BIC’s (2002-2009)

Basic research: grants Technology and product development: matching grant/royalties; Commercialisation/market discovery: Loans/equity

Overall Investment per Stage

0

75

150

225

300

375

Early Middle Late

Stage

Fund

ing

(R'0

00)

Funding (R'000)

Excludes platform

Excludes investments in platforms (R249 million)

R5 m R6 m R8m R5 m R6 m R8 m Average investment per project

Sector Funding Human health 50% Industrial & environmental 27% Plant biotechnology 11% Animal health 2% Biotech services 10%

Global Context

By 2030, the global population is expected to increase by 28% from 6.5 billion in 2005 to 8.3 billion.

97% of the growth in population will occur in developing countries.

A growing population will mean increase demand health services that improve quality of life essential natural resources food animal feed clean water and energy.

OECD, (2009) The Bioeconomy to 2030, Designing a policy agenda

Global Context

Growing strategic interest in the concept of the bioeconomy in the OECD and non OECD countriesdue to its potential for significant global economic,

social, and environmental benefits in an integrated framework.

From less than 1% today, bioeconomy could contribute up to 2.7% of the GDP in OECD countries by 2030, and considerably more in non-OECD countries

Case for the Bioeconomy

COORDINATED APPROACH TO ENHANCE SYNERGIES AND ELIMINATE DUPLICATIONS :

Farmer to Pharma National Biotechnology Strategy Health Innovation Initiatives IKS Policy

Integrated Strategy to Strengthen the Bioeconomy

Case for the Bioeconomy

Adapt to changing local and global landscape; New institutional arrangements New policy/legislative instruments Alignment to priorities

Burden of disease; Environmental sustainability:

Semi-arid with 12% arable land; Limited water resources; Biodiversity threats due to climate change – crop adaptability

Rural development (e.g. driver for biofuels in SA); Grow the bioeconomy, job creation, HCD

Food securityFood Security

Selected Government Outcomes (1)

Outcome 2: A long and healthy life for all South Africans:increase life expectancy;decrease maternal and child mortality rates;combat HIV and AIDS and decrease the

burden of diseases from Tuberculosis;strengthen health system effectiveness

Health Interventions

African Traditional Medicines Flagship:Leads identified to treat diabetes and TBPreclinical trials on HIV, TB and diabetes treatments

Local Manufacturing of therapeutics:Fluoro-expansion initiative for ARVHuman vaccine support at the Biovac InstituteLocal manufacturing of insulin

Research and Innovation Initiatives: SHARP, SAMI, SATRII Preclinical Development Platform recapitalisation Clinical Development support Bioscience Parks: Western Cape and Gauteng

Selected Government Outcomes (2)

Outcome 7: Vibrant, equitable, sustainable rural communities contributing towards food security for all:sustainable agrarian reform; improved access to affordable and diverse food; rural services and sustainable livelihoods; rural job creation linked to skills training and

promotion of economic livelihoods;enabling institutional environment for sustainable

and inclusive growth.

Interventions in Agricultural RDI

Nutraceutical Flagship:Indigenous vegetables: amaranthus, cleome, cowpeaFormulation of multi-vitamins and mineralsNiche markets: rooibos, monatin, fortified sorghum

Roll out of Nguni cattle embryo transferBiological control technologies and animal

diagnostic systemsRDI infrastructure to support animal vaccine

researchBiomass crops to support the biofuels

industry in greenfields

Selected Government Outcomes (3)

Outcome 10: Protect and enhance our environmental assets and natural resources:enhance quality and quantity of water resources; reduce GHG emissions, climate change impact and

improve air/atmospheric quality;sustainable environmental management;protect biodiversity.

Interventions in Clean Technologies

Cosmoceutical Flagship: anti-ageing, acne treatments, oral careanti-balding: clinical trialsanti-blemish: commercialisation

Moringa tree products development in three communities (3 provinces)

Bioprospecting for unique microorganisms and biological catalysts

Metagenomics PlatformsBiomanufacturing capabilities at BIC-established

platforms and science councils

Selected Government Outcomes (4)

Outcome 4: Create employment through economic growth;Local manufacturing capabilitiesDedicated biotech firmsSmall Medium EnterprisesBioscience Parks at strategic locationsLife Science Venture Capital FundTechnology Innovation Agency

Selected Government Outcomes (5)

Outcome 5: Develop a skilled and capable workforce to support an inclusive economySouth African Research Chair InitiativeCentres of ExcellenceResearch InstitutesScience CouncilsNational Research Foundation ProgrammesTechnopreneurs and bioentrepreneursTechnology PlatformsResearch and Innovation Programme

MARKET

Crop Improvement (Nutrition & Adaptation)

BioprospectingIndigenous Gene Pool

Biofuels CropsAnimal Production

Disease Management(Vaccines & diagnostics)

ExtremophilesBioprospectingCosmeceuticals

Enzyme ManufacturingBioprocessing (chemicals

Biofuels, bioplastics)Waste Management

Bioremediation

BiopharmaceuticalsVaccines

Active Pharma IngredientsDiagnostics

Medical DevisesPhytotherapiesBioprospecting

INFRASTUCTURE (pre-commercial and commercial)

HUMAN CAPITAL (STI)

FUNDING AND FINANCING

AGRICULTURE INDUSTRIAL HEALTH

Towards a RDI Strategy to Strengthen the Bioeconomy

Indicators Instruments and Status Quo Targets by 2018 Size of S&T workforce

~40 000 (assume bioeconomy S&T workforce of 8 000)

Universities, science councils, institutes, research chairs (40), centres of excellence 98), platforms(12), pilot plants, demonstration plants

Double investments in training scientists, engineers, technicians.to 16,000

Biological Science R&D as a percentage of GERD (National Survey of R&D 2008/9)

R744 million (3.5%) in 2010 through business entreprises, science councils, universities, non-profit organisations and government

Increase government investment to at least R1 billion per year

Biotech Patent Share filed 0.17 0.30

Biotech Start-up including DBF’s

Less than 80 biotechnology companies with less than 40 DBF’s

400 biotechnology companies with 60% DBFs (160)

Venture Capital <R400 million per year from public funds

At least R2 billion per year with inputs from private investors.

Indicators Instruments and Status Quo Targets by 2018 Foreign-direct investment* (Acquisition of local DBF’s)

At least three locally conceived DBF’s were acquired by international companies in 8 years.

Attract FDI through 2-3 MNC’s in the bioeconomy industries locating their R&D facilities locally by 2018.

Biotech initial public offerings

No (0) publicly listed biotech companies

At least 1 biotech IPO by 2018

Jobs <1000 jobs created over 8 years by NBS

More than 6000 by 2018 (1000 jobs per year). from start-ups, local manufacturing of APIs, biologics; technology platforms, pilot and demonstration facilities

Revenue sales Less that R10 million over 8 years.

At least R5 billion from sale of API’s, biologics, vaccines, enzymes, nutraceauticals, biofuels by 2018

Technology Balance of Payment

20% due to API’s imports alone Reduce by at least 25% on API (15% due to API’s)

Conclusions

Draft Strategy: Approval by the DST Executive and the Minister

Detailed Implementation Plans for new initiativesImprove effectiveness and efficiency of existing

initiativesSeek Cabinet Endorsement of the Bioeconomy

Strategy in September 2012/13

Thank You