Watch this island: Taiwan pushes into biotech

Hsinchu is not just any Taiwanese city, however. For many years, this island of 22 million people has thrived as a manufacturing base for computing hardware, and Hsinchu, with its massive semiconductor factories, has been its high-tech heart.

Times are changing, though. With much of Taiwan's IT manufacturing base headed overseas to cheaper markets, such as China, the Taiwanese government hopes biotechnology will help keep the island's economy moving. This combination of cutting-edge work in the life sciences and Taiwan's traditional strengths in computing technology creates an ideal environment for the emergence of a strong bioinformatics industry in the coming years, according to executives familiar with the situation.

To give things a boost, the Taiwanese government has pulled out all the stops to foster the development of local biotech companies. It has created research centres and revamped science parks to cultivate biotech companies. Hundreds of millions of dollars have been allocated to biotech investment.

There's just one hitch: Despite the government's best efforts, Taiwan's bioinformatics industry so far hasn't amounted to very much. "There isn't a good company out there yet," says Howard Lee, vice president of China Development Industrial Bank's (CDIB) technology department, while stressing that it is still too early to count the island out.

The Taiwanese government's promotional efforts may have fallen short of expectations, but several bioinformatics companies have found specific areas, such as in drug discovery, where they hope to make their mark. Taipei-based U-Vision Biotech, for example, is using gene sequencing as part of research efforts to test the efficacy of traditional Chinese medicine in the search for new and better drugs. "Chinese medicine is a big treasure that people have not discovered," says David Chiu, U-Vision's director of research and development.

Taiwanese bioinformatics executives also see an opportunity for the island to make an impact in the field of proteomics. With just a fraction of potentially hundreds of thousands of human proteins sequenced so far, the door is open to Taiwanese companies to apply sequence information to drug development and diagnostic applications. "Proteomics has very great potential in Taiwan," says Eddy Hsieh, CEO of Taipei-based DigitalGene Biosciences, which does protein sequencing and provides protein identification services, matching protein samples against a database of known protein sequences.

Proteomics and drug discovery aside, the real impact of Taiwan's biotech companies may be felt in the ways that meld the island's IT engineering strengths with the latest advances in bioinformatics. Just such an effort is under way at the Taiwanese government-backed Industrial Technology Research Institute's Chung Hsing compound, not far from downtown Hsinchu. There, tucked away in a small, utilitarian office on the fourth floor of Building 52, a small team of engineers at the privately funded Agnitio Science & Technology Co is developing a portable device that will be able to monitor the health of users from a home PC based on their individual genomic profile.

The company aims to produce a device that combines the best that computing technology has to offer with breakthroughs in healthcare offered by advances in gene sequencing and other areas.

"IT is a tool. Bioinformatics is a tool. It's not the final product," said Rong-I Hong, Agnitio's Oxford-educated president and CEO. "We're using these kinds of tools to develop a product that is marketable."

Following in the footsteps of Taiwan's most successful IT hardware manufacturers, which design and manufacture products for companies in the United States and elsewhere, Agnitio wants to fill the role of product designer, eventually marketing its devices abroad through a large healthcare company, such as La Roche or Johnson & Johnson.

Only time will tell if Taiwan's biotech companies emerge as a major player in the global industry. The island is investing heavily to make up for lost time and to find its place in a market that sees no shortage of new entrants from the US and elsewhere. Ultimately, will this be enough to support the development of a strong Taiwanese biotech industry? Some observers feel Taiwan may be too far behind to catch up. But others point to the island's strengths - including a focus on doing business internationally, strong hardware engineering skills and a well-educated workforce - as signs that Taiwan's biotech companies will soon make their presence felt.

"The next three years will be the golden age for the biotech field in Taiwan," CDIB's Lee said.