Biotech Research Laboratories Inc. has formed a joint venture to establish a research and manufacturing facility in Singapore, hoping to enter East Asian markets with economical products suited to that region's medical needs.
"We have had substantial interest from the Far East in our products, but because of the strong dollar, the actual market has been limited," said Thomas M. Li, president of the Rockville biotechnology firm. "This new company will enable us to take advantage of a market that encompasses the majority of the world's people in a price-competitive manner."
The new company, Diagnostic Biotechnology Ltd., will concentrate on products that meet medical needs that are more prevalent in Asia, while Biotech Research focuses on products for the U.S. market, Li said.
Biotech Research has developed a line of 35 monoclonal antibodies, biological substances used as research tools and in viral diagnostic tests. One of the firm's most successful products, developed jointly with E.I. du Pont de Nemours & Co., is a test to detect exposure to the virus believed to cause Acquired Immune Deficiency Syndrome (AIDS).
Some of Biotech Research's products are used to diagnose viruses linked to diseases that are more common in Asia than in the United States, such as one type of leukemia and certain cancers. The Singapore venture will provide a low-cost vehicle for getting those products to the Asian market, while broadening the revenue base of a 12-year-old firm moving from research to production.
Biotech Research lost $1 million in 1984 on revenue of almost $3 million, compared with a loss of $1.2 million on revenue of $1.9 million the year before. Product sales increased 482 percent in 1984, to $797,000, while client-sponsored contract revenue increased 24 percent to $2.2 million.
The new Singapore-based firm was formed with a group of Singapore investors who will provide $4.5 million in start-up capital. Biotech Research Labs will own 25 percent, or 2.5 million of the initial 10 million shares of common stock, and will provide technical training and assistance, the company said.
Biotech Research's scientific director, Robert C.Y. Ting, will be a member of the new firm's board of directors.
The facility, which should begin operations this fall, initially will produce Biotech Research products for sale in Asia. Biotech Research scientists also will train Asian scientists in laboratory techniques to be used to develop new products for that market, Li said. Biotech Research will continue product manufacturing in Rockville for the U.S. market, he added, citing the benefits of low shipping costs and proximity to federal regulatory agencies.
Diagnostic Biotechnology will have several financial advantages in Singapore. The company has been granted "pioneer" status, which exempts it from corporate taxes for eight years. Singapore's trade treaties allow goods to be exported to many Asian and some European countries duty-free. Shipping and labor costs also will be lower.
"It's not cost-competitive to produce here for their market," Li said.
Li said there is no danger that Biotech Research will be giving away technical advantages to potential competitors. "We will be using very standard technology," he said, referring to the method of fusing special cells to produce a stream of pure antibodies, called monoclonal antibodies. "It's in all the scientific journals."