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Evaluating Life Science Companies for Investment

  • Breakthrough Theatrette Matrix Level 4, Biopolis 30 Biopolis Street Singapore 138671 Singapore (map)

Biotech Connection Singapore (BCS) hosted a panel discussion featuring “Evaluating Life Science Companies for Investment” on the evening of Sep 6th at Breakthrough Theatrette, Matrix Building, Biopolis. Over 170 professionals from the local biotech community attended the event and engaged in lively discussions with the panelists.

Following up on the discussion we had at our last event, seasoned investors from venture capital, MNCs, and the public sector delved into the key considerations that drive investment decisions. The discussion was moderated by Dr Snehal Patel, Co-Founder and Director of MyDoc Pte Ltd, and Co-Founder of Galen Growth Asia, with lively participation from the panelists - Dr. Carolyn Ng, Investment Director from Vertex Healthcare Venture Capital; Dr. Stefan Hart, Director of New Ventures from Johnson & Johnson Innovation; Mr. Sridhar Gopal, Business Development and New Product Planning Director from Abbvie, and Mr. Chik Wai Chiew, Executive Vice President of the Commercialization Division from Exploit Technologies Pte Ltd (A*STAR).

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Kicking off the discussion, the panel shared their views on the sectors and therapeutic areas that have garnered the most investment interest. The panelists noted that immuno-oncology has seen the most investment activity and corporate acquisition interest in recent years. Other potential areas with huge unmet medical needs include cardiovascular, neurology, metabolic disease and orphan diseases. Besides therapeutics, the panelists suggest that there is promise in developing technologies that better support both medical providers and patients by integrating multiple research areas such as bioinformatics, bio-electronics and diagnostics. While most startups tend to focus on novel technologies and therapeutics, Dr. Hart emphasized the importance of building groundbreaking business models with innovative customer delivery channel in order to create value for the technologies and products. With the main players in the healthcare and life science industry (eg. insurance and pharma companies) all located within Singapore, he sees Singapore as an ideal test bed for these innovative business models before global implementation.

When assessing life science companies and technologies for investment, our panel of investors value strong management teams with truly disruptive technologies that fulfill significantly unmet medical need. In addition, the company’s business model should be capital-efficient in order to drive significant value creation from the initial investment. The company should also possess a sound intellectual property (IP) strategy, as a strong IP portfolio sets the foundation for further product development. Notably, Mr. Gopal and Mr. Chik highlighted the importance for researchers to stay open-minded and be receptive to collaborating with industry partners via various mechanisms such as joint ventures, co-development programs or licensing deals to successfully commercialize their research and bring it to market.

Our panelists noted that startup companies tend to be acquired or go IPO at a very early stage in recent years – i.e. clinical Phase I or even preclinical stage. As such, there has been a significant movement amongst venture capital firms to evaluate and invest in companies at even earlier stages. This has the unfortunate outcome of increasing the risks of investments. According to Dr Ng, top-tier journal publications or sound scientific evidence are strong indicators that can help push investors to commit at these early and high-risk stages. Other de-risking strategies include: investing in platform technologies capable of generating different targets in various areas for a potentially broader product portfolio, and syndicating investments with fellow VCs with deep pockets and technical know-how to better validate the company and spread risks. Lastly, Mr. Gopal emphasized that conducting proper due diligence and having a thorough understanding of a potential investment is fundamentally critical. 

The discussion came to a close with strong encouragement from the panel for scientist-entrepreneurs to enthusiastically reach out to both industry players and end customers, seek to partner people with complementary business skills, while staying alert about the challenges and potential competition.

The attendees enjoyed food and drinks at the networking session after the panel discussion, generously sponsored by A*StartCentral.

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