JAKARTA -- Global private equity firm General Atlantic will invest $55 million in a Jakarta-based biopharmaceutical joint venture between Indonesia's largest drugmaker, Kalbe Farma, and South Korean biotechnology company Genexine, as the venture seeks to become a dominant player in Southeast Asia's biological pharmaceuticals market.
Sie Djohan, president director of the joint venture, Kalbe Genexine Biologics, better known as KGBio, said on Wednesday that 60% of the funds will be used to support the company's portfolio expansion and innovations, 30% to expand production capacity and 10% for clinical trials.
"Biologicals have emerged as an important category of drug development over the past 20 years, with breakthrough advances in disease management, particularly in areas such as immuno-oncology, a key focus area for the Kalbe Group and KGBio," the companies said in a joint media statement. "KGBio's ambition is to play a leading role in increasing biological and biosimilar drug availability in the Southeast Asia region," the statement said.
KGBio, founded in 2016, develops biological cancer drugs, including one that seeks to take advantage of the body's immune system to fight the disease, an approach called immuno-oncology. Another KGBio drug under development is erythropoietin, which the company hopes to use to treat anemia related to chronic kidney disease. The two drugs are in different stages of clinical testing, KGBio said.
In contrast to conventional drugs made from chemical substances, biopharmaceuticals or "biologicals" are produced, extracted or semi-synthesized from biological sources such as proteins and living cells to create treatments such as vaccines, and cellular and gene therapies.
A combination of factors, including affordability constraints and lack of local manufacturing capabilities, have slowed the spread of biologicals in Southeast Asia.
Kalbe Farma is separately involved in a Phase 2 trial for a coronavirus vaccine developed by Genexine, although that was not mentioned in the media statement.
Irawati Setiady, president commissioner of Kalbe Farma, said biologicals are a "key growth lever" for the Kalbe Group, which is also trying to expand its nutritionals division this year to capitalize on greater interest in these products stemming from the coronavirus pandemic in 2020.
Ashish Saboo, managing director and head of General Atlantic's Indonesia operations, said: "KGBio is committed to meeting the challenging health care needs of the Southeast Asia region by providing effective, affordable treatments for chronic health conditions. We are thrilled to back KGBio on their journey to drive global biotechnology innovation."