[Reading Science] A Well-Chosen Research Institute Technology Is No Less Than a Unicorn Company

Government-Funded Research Institute Scientists Create Big Success Stories Through Tech Startups
Trend of Activating Technology Transfer to General Public and Companies Beyond Researchers

[Asia Economy Reporter Kim Bong-su] 'Startup' and 'venture entrepreneurship' are today considered the shortcut to a 'big hit myth.' However, simple startups without special technology or ideas are like jumping into a jungle full of beasts without any weapons. On the other hand, starting a business armed with ideas and technology significantly increases the chances of survival. In fact, there are many success stories of startups based on research achievements from government-funded research institutes that are now aiming to become 'unicorn companies.' While many successful cases involve researchers who are 'insiders' with high information and insight, external parties can also leverage 'valuable technology' through technology transfer, joint ventures, or conversion of existing companies as a foundation for success.

◇Active Researcher Startups... Growing into Mid-sized Companies

More and more cases are emerging where those who worked as researchers at government-funded research institutes succeed by leveraging the technologies and ideas they developed, contributing to the economy through market and employment creation. Since 1999, a total of 509 researcher-founded companies have been established, with 308 still operating today. Especially in the recent five years from 2016 to 2020, 222 companies were founded, showing a sharp increase. Scientists who previously only focused on research have a higher chance of success when they open their eyes to the market. According to the National Science and Technology Council (NST), such technology startups have a survival rate exceeding 60% compared to general startups, with average sales eight times higher and employment effects more than seven times greater. The cumulative employment creation effect has reached about 5,400 people. In 2019, total sales exceeded 1.13 trillion KRW, and at the end of the same year, there were 29 startups with annual sales of around 3 billion KRW.

BioNia, Korea's first bio venture, is a representative researcher startup case that began in 1992 at the Korea Research Institute of Bioscience and Biotechnology. Specializing in gene synthesis and analysis services and polymerase chain reaction (PCR) equipment, it entered the KOSDAQ market in December 2005 through a technology listing special case. It developed Asia's first HIV-1/HCV/HBV quantitative analysis kit, certified as a European in vitro diagnostic reagent, and in 2014 registered an RNA nanoparticle therapeutic as a U.S. original patent, growing into a mid-sized company based on solid technological capabilities. As of last year, it recorded annual sales of 150 billion KRW and a market capitalization of about 500 billion KRW, establishing itself as a pioneer in researcher startups.

Another researcher startup from the Korea Research Institute of Bioscience and Biotechnology, PharmAbcine, was founded in 2008 by researchers dedicated to cancer treatment research and went public on KOSDAQ in 2018. Boasting a market capitalization of 313.3 billion KRW, it has built an anti-cancer antibody new drug pipeline with about 20 candidate substances. The most recent startup, Jincore, established in 2019, successfully raised 3.6 billion KRW in investment. Jincore, which owns next-generation ultra-small gene-editing technology, is led by Chief Researcher Kim Yong-sam, who also serves as the head of the Gene Editing Research Center at the Korea Research Institute of Bioscience and Biotechnology.

ExoSystems, which attracted significant attention at the advanced technology competition CES 2020 held last year, is also a researcher startup case. The company developed the device 'ExoriHap' to enable rehabilitation training at home for those who have difficulty walking due to sarcopenia or stroke aftereffects. It was founded by Lee Hu-ik, a researcher at the Electronics and Telecommunications Research Institute (ETRI), through a researcher startup program. Utilizing ETRI's dual-arm robot indirect teaching technology, the company developed medical rehabilitation robots and wearable joint exercise devices, winning innovation awards in two categories at CES 2020: 'Health & Wellness' and 'Tech for a Better World.'

Speclipse, a skin cancer diagnostic device company, is a startup from the Korea Institute of Machinery and Materials. It developed a diagnostic device capable of analyzing cancerous and normal tissues in real-time without damaging skin tissue and attracted 3 billion KRW in investment from SoftBank Ventures and others in 2016. Four years after its establishment in 2019, it merged with a KOSDAQ-listed company, remaining a successful example of researcher startups.

Pinobio, founded in 2017 by a researcher from the Korea Research Institute of Chemical Technology, raised 46 billion KRW in investment and is planning to go public in the first half of next year. Based on the solid research technology of the Chemical Research Institute, it holds new drug candidates such as the targeted anticancer agent 'NTX-301' and the ischemic optic neuropathy ophthalmic treatment 'NTX-101.' The anticancer agent targeting blood cancer has received approval for Phase 1 clinical trials in the U.S., and the glaucoma eye drop treatment has been approved for Phase 1 clinical trials in Korea, competing with technology. After establishing a U.S. subsidiary, it signed a joint clinical development agreement with Aston Science for blood cancer targeted therapy, aiming for global expansion. It is also pursuing the development of antibody-drug conjugate (ADC) new drugs, emerging as a next-generation drug platform. Among the three components of ADC anticancer drugs, it focuses on the anticancer agent to create a third-generation anticancer drug by attaching drugs with high anticancer efficacy and low toxicity.

Terarix, established through a startup from the Korea Institute of Energy Research, succeeded in raising 3.8 billion KRW in investment and achieved a corporate value of 20 billion KRW just 18 months after its founding, recognized for its leading technology. Terarix is developing hydrogen fuel cell drones specialized for maritime conditions and power packs to ensure continuous power supply. Wellcon Systems, a servo motor (a device that drives a load according to control signals as the operating part of a servo mechanism) company essential for precision machinery, was founded by the Korea Institute of Industrial Technology in 2018 and is rapidly catching up in the servo motor field, which had been led by Germany and Japan, based on 20 years of technology developed by the institute. It has supplied ODM drives to SK Hynix's semiconductor transfer equipment mass production.

◇Buy Technology from Government-funded Research Institutes

Researcher startups are not 'someone else's business.' The path to joint investment or technology transfer of research achievements, technologies, and ideas announced daily by government-funded research institutes for commercialization in the private sector is wide open. A representative example is the 'Promising Technology Transfer Briefing Session' held by the Korea Atomic Energy Research Institute on May 25-26 last month. Since 2016, the Atomic Energy Research Institute has held such events annually. It introduces technologies with high commercialization potential among research achievements held by researchers to small and medium-sized enterprises and provides technology transfer consultations. KAIST, the 'myth' of venture startups, also held an online event on the 14th to introduce excellent technologies held by on-campus researchers to interested companies.

The actual utilization of research achievements from public research institutions to benefit the economy is increasing. According to the '2020 Technology Transfer and Commercialization Status Survey' report announced by the government in March, about one-third of newly developed technologies annually by public research institutions such as universities and public research institutes in Korea are transferred to private companies. As of 2019, out of a total of 32,481 cases, 11,676 cases (35.6%) were sold to companies. After more than doubling from 5,193 cases in 2011 to 11,614 cases in 2015, the number has steadily remained in the 10,000 range.

The Ministry of Science and ICT recently selected five intermediary research groups to discover and commercialize promising basic and original research achievements from universities and government-funded research institutes in five major source technology fields, including bio, to further activate this. A Ministry of Science and ICT official said, "To create a technology startup ecosystem in government-funded research institutes, we support preliminary entrepreneur education, technology-finance linkage, and startup-friendly personnel systems for researchers," adding, "We hope that many top-tier innovative companies will emerge through the commercialization of public research achievements and contribute to Korea's economy."