Emerging Trends in Biotech, Medtech & Healthcare Investments

Like many industries, the dynamic nature of the biotech industry could prove to be overly unpredictable for keen jobseekers and potential investors. “Emerging Trends in Biotech, Medtech & Healthcare Investments” was an insightful event to inform the public about recent developments within the healthcare, med- and biotech industries, and hopefully motivate more people to enter this exciting (and profitable) field. (For simplicity’s sake, I shall refer to these industries collectively as “biotech industry”)

Organised by Biotech Connection Singapore (BCS), the hour-long panel discussion opened to a full-house crowd at Matrix Building, Biopolis on May 25, 2016. Amongst the ranks of esteemed speakers were Dr. Kenneth Noonan (Lightstone Ventures) who was also the moderator, Dr. Lincoln Chee (Vertex Healthcare Ventures), Ms. Anne Kim (IMC Group) and Mr. Fabio La Mola (IMS Health) who offered their insights on investing within the biotech industry.

Photo credit: Biotech Connection Singapore

Photo credit: Biotech Connection Singapore

The evening began with a casual introduction by Dr Noonan for the audience to get acquainted with the panellists. After a few laughs, Dr Chee shed some light on the recent developments within the biotech industry, and how they had influenced investment trends within this field. Both Dr Chee and Dr Noonan agreed that as growth in public biotech markets slowed down, there was a significant shift in cash flow towards the private sector. In the past 3-5 years, the biotech industry had seen a greater influx of investments, as traditional venture capitalists (VCs) face greater competition from corporate investors of non-biotech portfolios, such as Google and IBM, to profit off its growing capital pool. As asset fluidity gradually became the limiting factor, Mr La Mola mentioned that acquisitions of late-stage firms by large biotech multinational corporations (MNCs) was the popular strategy for industrial leaders to maintain their edge, since it was more capital efficient to do so than investing in long-term R&D.

In the current investment climate, all speakers agreed that rather than sticking to the outdated business model of being commodity-oriented, there is immense market demand for novel biotech technologies. In particularly, platform technologies had garnered much VC interest, as potentially ground-breaking biotech applications could be derived from them, Dr Chee emphasised. This sentiment received unanimous support from other speakers, whom also observed that the biomedical research sector was one of the fastest to adapt in hopes of making a new drug discovery. Arguably due to high patient demand, much research interest was in the studies of prolific diseases, such as oncology and immunology. However, Dr Chee lauded the recent government efforts, in Singapore at least, to realign research focus back to common ailments such as diabetes and neurological disorders, which could diversify into creating new products within the biotech industry and benefit more patients.

As a VC herself, Ms Kim also saw great potential in investing in the biotech industry. Financial gains aside, Ms Kim believed that by utilising her company’s influence within the biotech industry, she could indirectly shape its financial landscape and redirect greater investment interest into beneficial yet underrated biomedical products and/or technologies. Therapeutics was often regarded as one of the most lucrative drivers within the biotech industry, while other equally essential sectors like diagnostics, medical devices and preventive medicine were regretfully pushed down the priority list. As the world foresees a greying global population, Ms Kim and Dr Chee both agreed that the industry was relatively unprepared to cope with the rising demand of geriatric services in the near future. While generating investment interest in related geriatric research was important, Ms Kim felt that building a comprehensive network furnished with up-to-date ancillary healthcare services, facilities and skilled labour for patient care would create a more direct impact in closing the geriatric demand gap. Adding on, Dr Chee then suggested that setting a reliable regulatory framework would be crucial in ensuring Ms Kim’s vision would become a reality.

The concluding discussion was a noteworthy one, when Asian biotech markets were compared against western markets (primarily the United States and Europe). Being previously stationed in US before coming to Singapore, both Dr Noonan and Ms Kim observed that the niche in biotech investments in western markets were already well-established years back with reliable infrastructures in place. In contrast, Asian markets were relatively immature to compete against their western competitors on equal footing.

With reference to Singapore’s biotech scene, Dr Noonan observed that local science fresh graduates who were interested in pitching to VCs had ill-prepared business plans with inadequate long-term financial forecasting, as compared to their western counterparts who knew exactly what investors like to hear. Nonetheless, the local biotech market has been growing steadily over the past 5 years, and Mr La Mola added that to close the gap even further, Asian markets could focus on developing novel technologies, or seek alternative ways to market itself in order to develop the unique Asian market brand unavailable in the west.

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