Address by Dr. Jimmy Devins, T.D., Minister for Science, Technology and Innovation at the 2008 PDA/EBE Conference on Biopharmaceutical Development and Manufacturing

Tuesday 24^th June, 2008 in the Radisson Hotel, Dublin 8.

Ladies and Gentlemen.

I am very pleased to address you here today at the opening of your Conference on Biopharmaceutical Development and Manufacturing.

Given that Ireland is a key global location for the Pharmaceutical industry let me begin with a few points as to the extent and importance of the Pharma/Biopharma industry in Ireland.

• Ireland is a unique location for Pharma & Biopharma investment

• We are the Number 1 location in Europe for Life Sciences projects having reached a 48% market share in 2004

• 10 of the top 12 Pharma companies have operations in Ireland

• Pharmaceutical Exports accounted for €34bn in 2006

• 38,000 employed in Life Sciences including 17,000 in pharmaceuticals

• 6 of the World’s Top Ten Drugs are made in Ireland

• • There has been major progress in recent years in the amount of R&D being undertaken in Ireland

The Pharma and Biopharma sectors are therefore extremely important for Ireland and I am very pleased that they have experienced significant growth in recent years. Going forward, the outlook for Ireland in terms of development and manufacturing is very good.

In spite of intense competition we will still secure investment in the small molecule (Pharma) area but the significant projects to be won for Ireland will mainly be in the large molecule (Biopharma) sector.

Looking at the global market, we see that revenues from prescription drugs is valued at over $643 billion and projected to grow to €810 billion by 2010. Strong growth will be achieved in Biologics and generics.

Cardiovascular drugs form the leading segment of the market, accounting for 20% of the total value, while pharmaceuticals for disorders of the central nervous system represent the second-largest category 17%, with anti-infectives representing 8% of global sales.

There are approximately 90 blockbuster drugs on the market, that is, drugs achieving sales over $1bn per annum. Today the top ten drugs account for around 10% of total industry revenues. Of these top ten drugs, six are manufactured in Ireland.

As regards the Global Pharma Industry Challenges, we see that the traditional Pharma sector is experiencing somewhat slower growth due to a combination of factors including, patent expiries, competition with the growth of generic manufacturers, lack of a strong product pipeline, increased costs of clinical and pre-clinical research, pressure on pharmaceutical prices particularly from governments in Europe, increased costs of marketing and sales and greater intensity of competition.

Globally there has been a serious decline in R&D productivity. The number of new chemical entities approved each year is not keeping pace with increases in the level of R&D spending. It is estimated that the average successful drug now costs in the range of $900 million to bring to market.

It is estimated that by around 2010, between 30% and 50% of all new human pharmaceuticals will be biotechnology derived. Sales of €76 billion were recorded in 2006 with a projection to grow to €121 billion by 2010. Ireland has already achieved critical mass in this sector with major investments from Wyeth, Centocor, Genzyme, Schering Plough, Pfizer, Lilly and Allergan.

Turning to Ireland, our overall economic performance remains healthy compared with many of our industrialised partners; however Irish companies have been operating in an increasingly difficult global economic environment.

Over the medium term, economic conditions are likely to become more challenging, and global financial imbalances are likely to continue to cause uncertainty in financial markets.

The relative strength of the Euro versus the dollar will increase pressure on exporters from the EU into the US. Irish companies will continue to be faced by new realities, which will bring both challenges and opportunities. To maintain our competitiveness in the face of these challenges, we must move our products and services up the value chain, by harnessing the outputs of our research investment in the last number of years.

The Government has a vital role to play in this process of maintaining competitiveness. I would like to touch on two particular Government investments of particular relevance to the pharma sector. First, investment in science and technology is now firmly embedded in Irish economic policy.

This did not happen overnight, but is rather the culmination of a series of initiatives, on the part of many stakeholders, that ultimately coalesced into an accepted national priority.

The Government has made a major commitment, through the substantial investment set out in the Strategy for Science, Technology & Innovation, the SSTI, and the National Development Plan, to making the transition to a strong knowledge intensive economy, by funding world-class research in Ireland.

The SSTI will lay a strong foundation from which future economic growth can develop. It is putting the benefits and opportunities of science, technology and innovation at the heart of Irish economic and social development, to grow our enterprise sector in a sustainable manner, and facilitate social advancement.

The SSTI, which constitutes one of the principal pillars of the National Development Plan 2007 to 2013, strives towards a vision of an Ireland in 2013 being internationally renowned for the excellence of its research, and at the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture.

The NDP provides for a step-change increase in the investment in technology, innovation and scientific research. This amounts to a commitment of €8.2 billion, by the Government, which is planned for the period 2007 to 2013. This aims to build the skills needed for a modern knowledge-based economy and to strengthen Ireland’s research base.

Now, turning to the National Institute for Bioprocessing, Research and Training which we established in 2005 to achieve four key objectives namely:

• To provide a substantive output of people with high-level best practice skills.

• To undertake academic / industry collaborative research with an emphasis on advancing knowledge in bioprocessing technologies and techniques.

• To give Ireland a competitive advantage.

• To encourage the development of the existing and new start ups in the biopharmaceutical sector.

Since the establishment of NIBRT, competition for mobile investment from biopharma companies has greatly intensified. The imperative for Ireland to have such a facility continues to be reinforced by:

• A need to give Ireland a competitive edge to win new biopharma investments by way of a trained workforce and by undertaking research in process improvement both of which provide a key differentiator for Ireland.

• The increased importance placed by biopharmaceutical companies on the existence and successful implementation of NIBRT as critical to their initial decision making and the successful implementation of their investment in Ireland.

• The need to protect the Irish pharmaceutical industry which employs 19,500 people and which contributes over €1bn in corporation tax annually.

• To counteract investment in other countries.

• The likelihood of further major biopharma decisions involving investment of a number of billions of Euros being made by the industry over the next few years.

• The imperative to deliver the training and research needs of industry and the need for an industry focused institute to act as a magnet of attraction for the biopharma industry to Ireland.

• The need to attract equipment and other industry suppliers seeking opportunities to showcase their technologies through training, research and scale up.

• The need to fill a gap in the provision of a skilled workforce for the bioprocessing industry by providing training for industry staff and over 1,800 students by 2011.

• To help solve industry’s bioprocessing issues by establishing 3 research teams and co-ordinating the wider national research expertise in bioprocessing

• Being able to rapidly respond to changing market conditions and industry needs through a flexible organisational structure and building design.

We know that in the highly competitive and rapidly changing global markets now evolving, success goes to those who read new trends first. Creative ideas, new and better ways of working, innovative products and services, and improved ways of marketing and delivering goods to the world will be the drivers of future success.

We strongly need to foster greater synergies between enterprise and education, between research and development, and between public and private investment - a cooperation that is very evident here today.

This conference will provide an important opportunity to foster innovation through networking and discussion and I wish you all an enjoyable and productive time here.

Thank you.