Fernando Quezada Commercial biotechnology in is Executive Director of the Biotechnology Center of Excellence Corporation, a : Current Massachusetts-based organisation advising international public and private opportunities and challenges sector agencies in biotechnology development Fernando Quezada Date received: 11th October 2005 programmes. He served on the Presidential Commission for Biotechnology Development for the Republic of and as Abstract Consultant to the UN The unparalleled growth of commercial biotechnology in the USA and Europe during the past Economic Commission for two decades has also been marked by its steady development in Latin America. , , Latin America and the Argentina, Chile, Mexico and others have made significant strides in building their research and Caribbean. production capacity in modern biotechnology. As these countries have pioneered new biotechnology applications in agriculture, mining, biofuels, human and animal healthcare a number have also launched national biotechnology plans with long-term investment commitments. Newly formed biotechnology trade associations in the region are expanding their membership and rapidly gaining international visibility. Along with the growth of commercial biotechnology in Latin America comes the need to address a series of issues associated with public perception, regulatory framework and intellectual property protection, financing mechanisms, workforce development and more. Government agencies and related public institutions are challenged to adjust their policies and operations to address these Keywords: Latin America, biotechnology, Mexico, Chile, changing needs. The private sector and the international community at large will continue to Brazil, pharmaceuticals, play critical roles in the region through knowledge networks, technology exchanges and joint economic development business investments.

A GROWING REGIONAL population of more than 500 million PRESENCE people, there has also been an upward A 2005 report by shift in the age profile and all the age- PricewaterhouseCoopers1 on related health issues this implies. Clinical pharmaceutical potential in Latin America trials in the region have shown a tenfold states that the region ‘is becoming much expansion in recent years. more appealing as a place in which to US biotechnology firms now recognise conduct development and production.’ the huge market potential and ‘business- Factors that contribute to this perception friendly’ outlook in Latin America. include recent healthcare reforms and Genzyme Corporation’s Senior Director major development plans, backed by of Marketing for Latin America, Carolina substantial public and private sector Vallucci, is active in several countries in investment.2,3 Additionally, there is a the region. According to Ms Vallucci: visible increase in economic and political stability and long-term investments in Latin America presents an excellent qualified human resources. potential market for biotechnology As of 2004, the combined GDP of products. This is an area that is just Fernando Quezada Biotechnology Center of Excellence Latin America and the Caribbean stood at starting to develop in the various Corporation, US$1.9 trillion (Table 1).4 Although the countries and the respective 371 Moody Street, data are compiled from only 19 of Latin governments appear to be very Suite 109, Waltham, MA 02453, USA America’s 33 countries, it illustrates the interested in supporting its growth and dynamic nature of the region’s economic expansion. In the area of health, the Tel: +1 (781) 894 7457 Fax: +1 (781) 894 7459 picture. Together with a significant authorities have demonstrated much E-mail: [email protected] increase in the size of Latin America’s openness in understanding what

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Table 1: Economies of Latin American and related activities also operate in the Caribbean countries region.9

Economy Population SELECTED NATIONAL (US$bn) (million) INITIATIVES Mexico 676.5 106.2 A review of national initiatives in selected Brazil 599.8 179.1 Latin American countries illustrates how Argentina 151.9 37.9 107.5 26.2 the diverse approaches to biotechnology Colombia 95.2 45.3 development has created working Chile 93.7 16.0 coalitions of public, private and academic Peru 67.9 27.5 Ecuador 29.9 13.4 sectors appropriate to each country’s Guatemala 26.1 12.7 situation. The following sections offer Dom. Rep. 19.4 8.8 Costa Rica 18.5 4.2 brief profiles of Chile, Brazil and Mexico El Salvador 15.8 6.7 as examples of countries with significant 13.8 3.2 forward movement in commercial 12.0 3.4 Bolivia 9.4 8.8 biotechnology. Honduras 7.4 7.0 Paraguay 7.0 6.0 Chile Nicaragua 4.4 5.6 3.6 8.1 The former president of Chile, Ricardo Total 1,959.8* 526.1* Lagos, pledged that, by the year 2010, that country’s government planned to Notes: Real GDP in current prices in US$. achieve a level of R&D investment of 1.5 *Excludes Cuba. Sources: IMF,5 Population Reference Bureau,6 Latin per cent of its gross domestic product Business Chronicle7 (GDP).10 Now standing at 0.7 per cent of GDP (up from 0.56 in 2000), this continued increase in support for research biotechnology can offer. In several of innovation in Chile symbolises the Chile plans to achieve a the Latin American countries, country’s commitment to building the level of R&D investment Genzyme is working jointly with the of 1.5 per cent of its infrastructure conditions needed for GDP governments to develop legislation boosting technology commercialisation. which will allow the citizens to have The government is also creating financial access to biotechnology-based incentives for increasing private sector therapies for genetic diseases for which investment in R&D along with a no alternative exists.8 continuing effort to strengthen universities and international linkages.11,12 A country-by-country study carried Specific to the biotechnology area, out during the past few years on 14 Latin Chile has designed several competitive American nations shows that there are research programmes, one of which over 430 biotechnology firms in the involves consortia centred on major region. Currently Argentina, Brazil, export sectors of agriculture, aquaculture, Chile, Colombia, Cuba and Mexico are mining, forestry and others (Figures 1 and the Latin American countries most active 2).13 Chile’s national strategy for in commercial biotechnology. In order of biotechnology development was launched importance, the most frequent areas of in 2003 with the objective of increasing application are agriculture, followed by the country’s competitive standing in the human and animal healthcare, food above-mentioned areas. This national processing, environmental applications biotechnology strategy responds in part to and industrial biotechnology. In the case the needs of its existing biotechnology of Mexico, nearly one-third of the community and provides ways to address approximately 90 biotechnology firms in the opportunities and challenges emerging the country focus on agriculture. Large on the global front. The more than 30 international firms with biotechnology- private biotechnology firms in Chile

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An example of a private biotechnology Main Sectors Addressed by Chilean Biotechnology company in Chile is BIOSONDA. Industrial Biotechnology Agriculture and livestock Founded in 1992 by a group of Chilean 22% 42% scientists, this company carries out research, production and commercialisation of selected Forestry biotechnology products. It provides 6% special services in the areas of protein 8% chemistry, immunology and molecular Fishing Industry 22% Human Health and Nutrition biology and has capabilities in the production of polyclonal and monoclonal antibodies. BIOSONDA is headquartered Figure 1: Main sectors addressed by Chilean biotechnology in Santiago and works in close association Source: Alvarez13 with Chilean Universities, research institutes and other biotechnology companies.

Aquiculture Health 15% 11% Livestock Brazil 12% With over 75 active biotechnology companies, Brazil’s leadership in Agriculture Mining 24% 4% biotechnology is widely recognised 14 Environmental Forestry Industrial (Tables 2 and 3). The country initiated 7% 13% 14% its national biotechnology programme in 1981, enabling long-term investments in building its human resource base and Figure 2: Main research areas in biotechnology technological platform. The state of Source: Alvarez13 Minas Gerais, with its capital city Belo Horizonte, is one of the most important biotechnology centres in Latin America. Since its earliest involvement, the country should benefit from these efforts and serve Brazil’s leadership in has made deliberate efforts to integrate to contribute to the overall technology biotechnology is widely institutions and budgets relating to innovation in the country. recognised biotechnology applications in agriculture, The four specific objectives outlined in energy and health. In 1997, a Chile’s national biotechnology strategy combination of federal and state funding are entrepreneurial development, training enabled the development of a virtual of human resources in science and genome institute made up of 30 technology, modernisation of the laboratories. This institute (named the regulatory framework, development of public institutions and citizen participation. Chile has long had a strong Table 2: Brazilian biotechnology companies tradition in the area of medical research by state and services. In recent years the country has increased its funding commitment to State Percentage technological innovation. During 2004, new consortia were formed for selected Sa˜o Paulo 42 Minas Gerais 29 sectors of the economy including forestry, Rio de Janeiro 9 fruit culture and human health industries. Parana´ 5 A genome programme has been formed Distrito Federal 3 Rio Grande do Sul 2 with applications to renewable natural Others 10 resources and to ‘bio-mining’ respectively. Source: Stat-USA14

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Table 3: Brazilian biotechnology companies by sector (FELAEB). In August 2006 these organisations will hold a joint congress in Sector Percentage Buenos Aires entitled ‘BIOLATINA 2006’. Human health 24 Government and international biotechnology companies 22 Brazil established its first bio-company Consumables suppliers 17 incubators in Brazil in 1984–86, in Equipment 17 Agribusiness 12 Florianopolis, Sa˜o Carlos, Campina Animal health 4 Grande and Brasilia. According to the Environment 4 Brazilian Association of Business Incubators and Technology Parks 14 Source: Stat-USA (ANPROTEC), founded in 1987, there are now 283 fully operational incubators in Brazil. The most active incubators are: Organization for Nucleotide Sequencing Biominas Foundation, Minas Gerais, and Analysis) successfully sequenced a Incubation Center of Technology fruit disease-causing bacterium (Xylella Companies (CINET), Sa˜o Paulo, fastidiosa), which affects some of the Managerial Center for the Elaboration of country’s major export crops. In 2000, Advanced Technologies (CELTA), Santa the Brazilian Genome Project was Catarina and the Technology Plant launched in part from this experience. Foundation, Paraı´ba. FAPESP, the State of Sa˜o Paulo Research At the end of the last decade many Foundation, in concert with the Ludwig Brazilian biotech companies invested in Institute for Cancer Research, is working gene mapping, 100 million BRL on a Cancer Genome Project. Started in (US$43m) had been invested to sequence 1999, six sequencing teams from the the genomes of a number of plants. The University of Sa˜o Paulo are contributing Federal Agricultural and Horticultural to public databases. In addition Brazilian Research Institute (EMBRAPA) is researchers are actively working to map working with the Alellyx company, the bovine genome. which is part of the Votorantim group, Brazil’s biotechnology trade group, the Brazil’s largest industrial conglomerate Association of Brazilian Biotechnology with revenues of (US$6bn). This group Businesses (ABRABI), plays a key role in has invested heavily in agricultural bringing together the principal players in biotechnology including the area of the country’s biotechnology community ethanol from sugar cane. Brazil is a leader to address issues that affect biotechnology in the production of bio-fuel usage and development in Brazil. Recently this currently produces more than 13 billion group has taken an interest in the area of litres of bio-ethanol from sugar cane. patent legislation and biosafety Principal investments have been in the regulations. According to the areas of plant genomes and sugar cane organisation, there are approximately 300 breeding.15 Some 25 per cent of world companies involved with biotechnology production of sugar cane comes from in Brazil. Founded in 1986, ABRABI Brazil. In addition to sugar, this group has itself has 21 associates including interests in soy, coffee and rice, which are pharmaceutical companies, ag-bio staples of the Brazilian economy.16 companies, and bioinformatics firms as well as government agencies and Mexico universities. ABRABI works closely with Mexico represents the tenth biggest its counterpart associations in Argentina, economy in the world today and is a Mexico is a destination for Chile, Mexico and Uruguay on region- destination for significant foreign direct significant foreign wide initiatives and programmes through investment. Currently US-based Merck direct investment an umbrella group, the Latin American & Co. is sponsoring a comprehensive Federation of Biotechnology Companies study of the life sciences sector in Mexico.

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By providing a major grant to the use innovation as a platform to improve Council on Competitiveness in the health status and standard of living of Washington, DC, Merck has their citizens while allowing them to demonstrated interest in assessing the compete more effectively in the global national and regional policy environment marketplace.’ for life sciences innovation in Mexico. In Mexico, the issue of genetically The study will determine areas of modified (GM) organisms has been the strengths and weaknesses in the Mexican subject of extensive debate with life sciences sector and provide specific proponents and opponents arguing both recommendations for the establishment of sides. After lengthy deliberations in a ‘cluster’ in the life sciences. Mexico’s Congress and as a result of At a recent biotechnology conference considerable public protest, the Mexican in the USA, Grey Warner, Merck & government published its new Biosafety Co.’s Senior Vice President for Latin Law for Genetically Modified Organisms America described this effort and offered in March of 2005 (Figure 3). Complying his view of Mexico’s potential for with Mexico’s obligations under the innovation in biotechnology and related Cartagena Protocol, this law regulates the fields.17 He pointed out that by creating creation, development and marketing of the enabling conditions in which GM products. The law essentially innovation can flourish (such as free trade, removes previous restrictions on the use respect for intellectual property, market- sale, import, export and farming of GM based healthcare reform and rule of law), organisms and provides for governmental Latin America can deliver on the promise coordination of the oversight and of prosperity for its people. The ability to permitting processes. innovate and absorb innovation and turn One of the groups that seek it into marketable goods and services has harmonisation of regulations affecting become essential. He said that establishing biotechnology in Mexico is the country’s these conditions will ‘enable countries to widely respected professional association

Figure 3: Mexican legislation related with biotechnology Source: Arriaga18

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for biotechnology. Founded in 1982, the accessible options for the promotion of Mexican Society of Biotechnology and technology innovation and related Bioengineering (SMBB) promotes activities. With the increase of global technology transfer between the private outsourcing trends in product and public sectors. Its membership development, manufacturing and includes more than 800 associates who are product finishing, Latin American practising professionals and students. countries are preparing to help their Commercial biotechnology companies businesses compete for contractual in Mexico are researching a number of arrangements with companies in Europe, areas. These range from the work of Canada, the USA and other regions. Laboratorios Silanes in new technologies With regard to cultivating European for the diagnoses of metabolic disorders to links, a group of stakeholders from Latin the work of companies such as America and Europe were convened in ProBioMed which is developing bioactive Barcelona in April 2005 to explore the products for human use. Others are current needs and areas of interest for dedicated to fermentation and collaborative endeavours. Under the title downstream processing.19 In this latter of BioEuroLatina this group worked to category, Fermic S.A. de C.V. is a reach a consensus on a declaration Mexican firm that operates a fermentation which outlined the market arguments and synthesis facility approved by US and mechanisms for supporting increased FDA GMP (Food and Drug interaction. In the case of the USA, Administration’s good manufacturing there are both new and existing trade practice). With one of the largest agreements (Central American Free fermentation plants in Latin America, Trade Agreement, North American Free Fermic is currently producing and Trade Agreement, and Chile–US Free supplying bulk active ingredients for Agreement) which include provisions of production of pharmaceuticals. It is relevance to biotechnology-related relevant that a US firm, Diversa commerce. Corporation, has entered into a long-term It will be of critical importance for the contract with Fermic, to provide interested countries of Latin America to manufacturing capacity for the production continue with the preparation of human of Diversa’s enzyme products.20 resources in areas ranging from basic science to biosafety capacity-building to OPPORTUNITIES AND downstream processing. Evidence shows CHALLENGES AHEAD that selected countries in Latin America The opportunities for biotechnology- have increased their commitment to Opportunities are related collaboration in Latin America are public funding of science and technology gaining visible momentum gaining visible momentum through research and education. Among these creative initiatives from business, countries, Brazil has the most researchers government and academia. The diversity with doctoral and masters degrees. of the situations represented by the Mexico also has increased its number of countries in the region provides a rich PhD level graduates. Over the last decade, background of players and resources. The Mexico has experienced a growth of countries discussed in this paper are nearly 20 per cent in the number of working to boost their competitive PhDs. In Chile, the total number of standing on the global front by capturing scientists has increased 56.9 per cent from the benefits of biotechnology applications 1990. Professionals working in as they affect their established industries in biotechnology-related jobs in Chile agriculture, food processing, healthcare showed a steady annual growth of 17 per and others. cent since 1995. Because the region is still in relatively In the area of industrial biotechnology, early stages of development, it offers there is an opportunity for Latin America

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to take advantage of growing interest in universities increase their participation in specialty enzymes. According to Dr the incubation efforts, there will be a Marco A. Baez, International Project greater need to create simple mechanisms Manger of Industrial Enzymes at Dyadic for transparency and avoidance of conflict International in Jupiter, Florida, Latin of interest situations. Continued funding America shares the world challenge of for scientific research in the region will maintaining access to affordable energy need to be increased and maintained and a clean environment for its along with private sector commitment to population. In the case of energy, there is providing the investment capital for new strong pressure within Latin America to biotechnology ventures. find new alternative and renewable In the area of public perception, new energy sources in order to reduce approaches must be adopted to respond to dependence on foreign oil. Latin America concerns about biosafety, ethical issues has an opportunity to shift from an oil- and the ways in which the general public based economy to a ‘bio-economy’. Dr views the overall risks and benefits of Baez points out that this will require a biotechnology applications. A key fostering of industrial biotechnology challenge will be to continue engaging platforms which integrate emerging and certain interested segments of the public rapidly evolving knowledge about the in objective dialogue on biotechnology megadiverse regions of Latin America applications for health, agriculture and with the implementation of cutting-edge food products. technology. In this regard there is an The commercial biotechnology important role for studies in functional development activities discussed in this genomics, protein evolution and paper reflect only a small part of Latin metabolic control systems to engineer America’s new and exciting initiatives in microbial strains and industrial enzymes.21 this area. It is argued here that the The challenges ahead for Latin America substantive part of this development has are as diverse as the growth of commercial been generated from within the region. biotechnology applications. There is a The market dynamics of the coming years growing need to address a variety of issues promises additional growth along with a and problems associated with the continuing rotation of biotech leadership adaptation of public and private among the countries of the region and institutions. On the governmental side, among the industrial sectors themselves. adaptations are required in regulatory Now more than ever, Latin America is in agencies as well as in economic a strong position to advance its development agencies. As agricultural commercial biotechnology efforts to applications have had the most dominant create a business climate that will sustain focus so far, the dialogue will need to be the development of its local economies. broadened as local development and Opportunities for international production of biopharmaceutical products collaborations with biotechnology firms increase in the region. and research institutions in Europe, the Intellectual property rights issues will USA, Asia and other regions will also also continue to influence the institutional continue to increase. Indeed, the added adaptation of universities and government value from such collaborations can build agencies. Technology licensing offices are upon the national initiatives and become becoming more common at Latin an integral part of Latin America’s future American universities along with patent in commercial biotechnology. policies for university researchers. Both the public and private sectors are playing References an active initial role to jump-start 1. PricewaterhouseCoopers (2005), ‘Latin incubator systems and financing America: Prescription for Growth’ (URL: mechanisms. As government agencies and http://www.pwc.com/extweb/

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