AsianScientist (Jul. 25, 2019) – By Li Lidao – After decades of investments in the biomedical sciences, it is gratifying to see an inflexion in the biomedical start-up scene in Singapore.
To showcase some of the ongoing projects in drug development in Singapore, and to examine the opportunities and challenges associated with bringing drug targets from bench to bedside, the Agency for Science, Technology and Research (A*STAR) organized the landmark Drug Development Week (DDW), held from June 24-26, 2019.
DDW featured three main events—the Therapeutics Development Review (TDR) Symposium (June 24); the AI Powering Pharma Innovations (June 25); and the official opening of the Experimental Drug Development Centre by Singapore’s Deputy Prime Minister, Mr Heng Swee Keat (June 26).
At the TDR Symposium, an expert panel—moderated by Mr. Fabio La Mola, Partner at L.E.K Consulting—comprising Dr. Khoo Shih, Managing Director, Life Sciences Investments at Temasek; Dr. Sidney Yee, CEO of the Diagnostics Development Hub (DxD Hub) and Senior Advisor at A*ccelerate; and Dr. Piers Ingram, CEO of Hummingbird Bioscience, discussed issues pertaining to investing in and growing life-science start-ups.
Learning to tango with investors
For scientists, spinning out ideas from the lab into viable businesses is a continuous lesson in entrepreneurship, and one of the key lessons is finding the right match with potential investors, Mr. La Mola said.
“Different investors have different preferences and styles, and they differ in the type of things that they like, or do not invest in,” said Dr. Khoo.
Start-up founders can study the “investment thesis” of the investor beforehand to understand what that particular investor is looking for, Mr. La Mola added.
Beyond increasing the odds of a successful pitch, selecting an investor carries long-term implications as well, such as affecting the start-up’s exit strategy. A biotech start-up could typically go down one of two routes—get acquired by a large biopharmaceutical company, or grow into a sustainable, standalone company, Dr. Khoo said.
“There is nothing wrong with either type of exit … but you have to find the right investors and shareholders that share the same view and are willing to walk that journey with you,” she highlighted.
For example, start-ups with more blue-sky, big-platform ideas would likely need to find more patient investors who are willing to invest larger amounts even at series A, and fund the company over a longer term.
Some of these investors may include top-tier venture capitalists (VCs) based in the US.
“[For founders,] the key is to cast a wide global net, and to try to engage people who value the type of problem that you are solving,” advised Dr. Ingram. “Capital is pretty global these days, and investors are willing to invest across borders.”
Crossing the ‘valley of death’
After securing the first pot of investments, start-ups need to prepare for the ‘valley of death’ looming ahead. This ominous term refers to the pre-revenue period when firms find it difficult to get further capital injections after the initial funding runs dry.
A common mistake, Dr. Yee shared, occurs when medtech start-ups do not start thinking about market adoption for their products early enough.
“They use the seed and series A [funding] just to build the product. By the time you have the product and reach series B … the investors will all be asking, ‘Is anyone buying your product? What is your revenue like?’” said Dr. Yee.
Especially in the medtech sector, just having the product itself may not be sufficient, Dr. Yee pointed out. Medtech start-ups should thus think about market adoption in the seed and series A funding stages, and leverage on the capabilities of the public institutions to achieve this goal, Dr. Yee advised.
One option would be to work with the Diagnostics Development (DxD) Hub, which provides expertise in regulatory approval, product design and optimization, and clinical validation of diagnostic products, she said. In addition, A*STAR’s deep tech incubator, A*StartCentral, provides entrepreneurs with wet-lab facilities, co-working spaces, and a network of mentors, industry partners and investors.
The talent gap
In addition to support from government agency resources, biotech companies also require access to a diverse pool of talent to grow rapidly.
“[Biotech start-ups require] experienced talent across the board, such as in drug discovery, clinical development, regulatory approvals and entrepreneurship. We have some, but not enough,” Dr. Khoo pointed out.
This talent gap is especially stark in comparison with biotech ecosystems such as those found in US and China.
“We are in conversation [with some VC funds and accelerators] to see how they can build a presence in Singapore … and have a partner based here to talk to scientists and clinicians to nurture their ideas,” she explained. “These funds can leverage on their networks in US and Europe to access the talent that we are lacking today, and for these experienced talents to be mentors for local start-up founders.”
While start-ups should aim for international market adoption, Dr. Yee reminded founders to also consider regional markets. Research in precision medicine has shown that different populations may respond differently to standard-of-care treatments, suggesting that some treatments could be more effective when tailored to the Asian phenotype.
“I encourage our companies to look at Asia or Southeast Asia as the immediate market, especially if you’re looking at something that has to it a precision medicine [approach],” said Dr. Yee.
All in all, the panel provided much needed insights into the biotech ecosystem in Singapore, which allowed the audience to not only understand the current landscape, but also envision the future of biomedical research.
Copyright: Asian Scientist Magazine.
Disclaimer: This article does not necessarily reflect the views of AsianScientist or its staff.