Korea's healthcare industry stands at a crossroads, balancing innovation against global market challenges. Despite growth, Korean companies often lack the scale to compete internationally. Open innovation offers a promising strategy to overcome these limitations. Notably, multinational pharmaceutical giants have recently intensified their open innovation activities in Korea, recognizing the country's potential. This trend could accelerate Korea's healthcare advancements and boost its global presence. Korea Biomedical Review met with various multinational pharmaceutical and medical device companies currently conducting open innovation efforts in Korea to learn more about Korea's ability to leverage these collaborations and potentially accelerate its healthcare advancements on the global stage. This is the first installment. -- Ed.

Advanced economies have long dominated the global medical device industry, with the top 10 countries accounting for 78.2 percent of the world market, estimated at around 440 trillion won ($324.2 billion) in 2019. In this competitive landscape, Korea's presence as the 10th biggest market is a significant achievement.

The growth and stature of Korea's medical device industry have been remarkable. Between 2014 and 2019, the nation's medical device industry showed a compound annual growth rate (CAGR) of 6 percent, significantly outpacing the global average of 3.9 percent. Among the world's top 10 markets, only China (9.3 percent) exhibited faster growth than Korea during this period.

However, despite being considered one of the top 10 markets, Korea's share of the global market remains at around 1.6 percent. The future of the industry heavily depends on successful expansion into overseas markets. Additionally, most Korean medical device companies remain small, posing challenges in an industry where capital and size play crucial roles.

In this context, open innovation with multinational companies has emerged as a potential solution for Korea's medical device sector to take the next step forward. Open innovation is almost a must in the industry, given the enormous capital and high-level human resources required for research, development, and commercialization -- resources difficult for any single company to secure independently.

Notably, Roche Diagnostics has been particularly active in pursuing open innovation strategies in Korea.

Against this backdrop, Korea Biomedical Review met with Ally Choi, Digital Business Development Manager at Roche Diagnostics Korea, who recently shared insights into how the company is leveraging open innovation to foster growth in Korea's biotech ecosystem and address these industry challenges.

"Our open innovation strategy is deeply rooted in Roche's slogan, 'Doing now what patients need next,'" Choi explained. "We're not just developing products; we're creating precision medicine diagnostic solutions tailored to individual patients' needs and establishing an ecosystem that can deploy these solutions globally."

Choi touched on Roche's global M&A and licensing activities, providing some impressive figures. "Since 2014, there have been 22 acquisitions in our global diagnostics sector," she revealed. "Currently, we have 300 in-licensing and 190 out-licensing agreements active. This gives you an idea of the scale at which we're operating and the opportunities available for the right partners."

Choi elaborated on several key initiatives in Korea, including the Startup Creasphere program, which was introduced in January 2023 through a partnership with the Korea Health Industry Development Institute (KHIDI).

"This program is closely linked with our APAC-wide efforts," she said. "It provides Korean startups with invaluable exposure to global markets and networking opportunities and we're seeing a lot of potential in connecting these innovative local companies with our global network."

Another initiative is the 2024 Seoul-Roche Diagnostics Startup Sprint Demo Day, co-hosted with Seoul City and Seoul Bio Hub.

According to Choi, the program has already yielded promising results.

"We've identified innovative startups like Seven Point One, which is now in discussions with Roche Diagnostics Global for potential international expansion," Choi noted. "This company, focused on early Alzheimer's diagnosis, exemplifies the kind of cutting-edge technology we're looking to support and potentially integrate into our global offerings."

Choi also highlighted the KHIDI New Impact Project, another significant initiative aimed at expanding global open innovation in the medical device sector.

"Through this project, we're not just looking at immediate commercial potential, but also at technologies that could reshape the future of diagnostics," she explained.

Reflecting on Korea's biotech startup ecosystem, Choi praised its rapid growth, attributing it to strong government support, a skilled talent pool, and investments from global pharmaceutical companies.

“Korea's challenging corporate culture is also notable,” she said. “There's a tendency to boldly venture into new markets without fear of failure, which is a crucial asset for survival in the rapidly changing healthcare startup market.”

However, she noted that while early-stage research is excellent, there's still room for improvement in commercialization and mass production capabilities.

Choi stressed that this is an area where Roche Diagnostic can help.

Choi went into detail about Roche Diagnostics' support for Korean startups' global expansion as the company provides various networking opportunities that can help with local startups connect with global players.

“For instance, our 'Innofest' program at the Roche Experience Day allows startups to pitch their ideas and connect with international partners,” she said. “We're even planning to host an Innofest event in Chengdu, China, in 2024. These events are crucial for startups to gain exposure and potentially find partners or investors on a global scale."

When asked about ideal candidates for Roche's open innovation programs, Choi emphasized the importance of preparedness.

"We're looking for companies that have done their homework," she said. "Ideally, they should have a clear go-to-market strategy and a good understanding of how their technology could fit into Roche's portfolio.”

However, most importantly the company is excited by truly novel ideas, even if they're at an early stage, she added.

Specifically, Choi outlined the criteria for suitable partners.

“We seek companies with innovative technologies in Roche Diagnostics' key areas of interest, such as blood test-based algorithms, smart labs, home screening, and digital biomarkers,” she said. “The ability to respond sensitively to market changes and quickly develop and productize technologies is also crucial.”

Looking ahead, Choi outlined Roche Diagnostics Korea's plans for future open innovation initiatives.

"We're exploring opportunities with R&D-related departments and looking to introduce early-stage companies to the global market," she explained. "We're also focusing on ongoing collaborations with selected companies like Seven Point One, HAII , and Kogene Biotech, with the goal of creating synergies that directly benefit patients."

Choi emphasized the role of Roche Diagnostics Korea as a bridge between local startups and the global Roche network.

"We act as translators, not just linguistically, but culturally," she said. "We help explain the nuances of the Korean market to our global colleagues, and vice versa. This is crucial for building successful, long-term partnerships."

Choi concluded the interview by stressing Roche Diagnostics' commitment to being a trusted partner for both the government and local businesses in driving innovation and growth in the healthcare sector.

"Open innovation isn't just a buzzword for us," she stated. "It's a fundamental strategy that we believe will shape the future of healthcare.”

By combining Roche's global resources and expertise with the dynamism and creativity of Korean startups, the company is confident that it can make significant strides in improving patient outcomes and advancing medical science, she added.