The biotech startup landscape in the Asia Pacific (APAC) region has encountered challenges, marked by downturns, workforce reductions, and closures within the industry. Despite these hurdles, a more optimistic narrative emerges with notable successes in biotech investments, hinting at a dynamic future for the sector. As we set our sights on 2024, it’s crucial to identify the key trends that will shape the industry. The following three trends encompass strategic investments, government support, and collaborative platforms, all poised to propel biotech startups to the next level.
Rise in strategic biotech investments for long-term societal solutions
Investments in the biotech sector are expected to undergo a strategic shift in 2024, with a huge focus now being on quality over quantity. Investors are expected to favor companies with seasoned teams and robust scientific solutions that are either best-in-class or pioneering. According to McKinsey, despite the decline in biotech startup funding in 2023, levels still remained above pre-pandemic levels, with Series A funds notably accounting for almost half of all startup funding. This indicates a redirection of focus to innovation. Evident to this, innovative platforms such as machine learning (ML)-powered drug discoveries, cell therapies, and gene therapies have dominated biotech funding in recent years due to their ability to address a broad array of problems.
The flight to quality comes as investors recognize the unique trajectory of biotech startups — unlike their tech counterparts, they have a longer journey to achieve a return on investments (ROI) and require a specialized understanding of the intricate scientific landscape. Unbeknownst to many, the greatest scientific breakthroughs often demand months, and sometimes even years, to yield results, emerging from numerous rounds of trial and error.
Startups must demonstrate how their innovations can directly address pressing societal and human issues to grab the attention of strategic investors. Case in point, a notable example is Engine Biosciences, dedicated to developing precision medicines for cancer and complex diseases – amidst the rising demand for such treatments in the region and the world. Leveraging disruptive technologies like AI and Machine Learning, Engine Biosciences showcased its cancer treatment advancements, securing an additional US$27 million in a recent Series A extension round. This success boosted their total funds raised to an impressive US$86 million.
Increase in government support to enhance the APAC region’s attractiveness to global investors
In 2024, governments across APAC are expected to continue ramping up their support for the biotech startup ecosystem, focusing on promoting the growth of the industry for economic expansion. Singapore, in particular, has seen a surge in government-backed or led programs over the past year. For instance, the Economic Development Board (EDB) recently collaborated with Johnson & Johnson (J&J) to assist early-stage biotech startups based in Singapore in developing talent and enhancing commercialization capabilities. The collaboration aims to accelerate innovation within Singapore’s life science ecosystem and the wider APAC region Meanwhile, in Taiwan, the government is in the process of establishing biotech industrial clusters to encourage the participation of more startups in the sector and attract foreign companies to the local market.
Simultaneously, as the region grapples with the rise of various infectious diseases and increased awareness of healthcare issues, there will be a growing demand for new therapies and drugs. For example, breast cancer cases and cervical cancer deaths in APAC are expected to outpace global rates, creating a fertile ground for innovative biotech solutions.
Against this backdrop, biotech startups are poised to capitalize on available support and opportunities to address the various health challenges and contribute to the development of novel treatments. Strong government backing, coupled with increasing investor interest and growing consumer demand, is predicted to position APAC’s biotech startups not only for adaptability but also for thriving in this conducive environment.
Focus on collaborating with other ecosystem players
Collaboration is set to remain the bedrock of the ever-evolving biotech industry in 2024. Beyond government and investor partnerships, there’s a growing emphasis on forging alliances with research institutions, regulatory bodies, and industry peers. In a whitepaper by Novotech, post the 2020-2021 biotech surge, a trend where Big Pharma Executives take on pivotal roles in well-funded, emerging biotech startups. This migration brings a wealth of industry experience to innovative startups. In the upcoming year, we anticipate an increased commitment to collaborative efforts within the biotech landscape.
For instance, NSG BioLabs offers a shared facility space that houses a diverse group of biotech industry players, from corporate spin-offs to startups. This space fosters connections among different biotech stakeholders, where scientists readily share equipment and offer support to other scientists who are learning to operate them. NSG BioLabs also utilizes its space to host networking and knowledge-sharing events, allowing industry players to participate in insightful discussions and exchange innovative ideas. These encounters allow companies the opportunities to expedite their research and development, better navigate regulatory complexities, and enhance market access. The goal is also to build a more proactive biotech community, attracting investments from those sharing the mission of driving industry advancements.
Fostering success in APAC biotech through collaboration
As we peer into the future of the APAC biotech landscape, biotech startups will continue to see opportunities for innovation and funding on the horizon. The anticipated trends in strategic investments, government support, and collaborative efforts suggest that 2024 will be a pivotal year for aspiring biotech entrepreneurs. Success in this dynamic landscape will not only hinge on groundbreaking achievements but also on the collaborative synergy of minds propelling the industry toward a future marked by innovative partnerships. Now, more than ever, the APAC region stands as a prime hub for those embarking on exciting biotech journeys.
Daphne Teo is an experienced investor and company builder, with over a decade of experience in real estate, biotech, and investment banking. She is the founder and CEO of NSG Ventures and NSG BioLabs, Singapore’s largest and leading biotech co-working laboratory and office space. She led the entire setup of NSG, including financing, operational setup, and recruited a team a team of internationally renowned professors, investors, and biotech executives to advise NSG and its companies.
She was one of the initial shareholders and co-founders of the Singapore- and US-based Engine Biosciences and previously served as a board director and head of finance and operations in its critical early days before and after venture financing. She continues to serve as an advisor to Engine Bio.
She currently also serves as Chief Investment Officer of D3 Capital and previously worked at Goldman Sachs and HSBC in the Investment Banking Division in Hong Kong and Singapore.
At D3, she has executed and overseen a number of multi-million investments in real estate and natural resources across Asia and USA. She also serves as a board director at selected portfolio companies. In 2013, she was a co-founder and investor in the 3.6M sq. ft. Golden City integrated real estate development in Yangon, Myanmar and helped drive the successful sale of the company at a valuation of US$110 million in 2016 achieving triple digit IRR for D3.
Daphne received her master’s from Stanford University’s School of Engineering and her bachelor’s from Purdue University (highest honors), and she is currently pursuing her master’s in biotechnology at Johns Hopkins University.
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