US-based financial services firm Burrill & Co LLC said yesterday it was inclined to invest in companies that can develop new drugs and manufacture consumer healthcare products related to digital electronics.
“We are especially interested in companies with market access to China,” Burrill & Co managing director Marietta Wu (巫薈) told a press conference after the opening of the annual BioBusiness Asia investment forum in Taipei.
Eyeing the strong research capability in genomics in Taiwanese hospitals and research centers, Wu said her company plans to help bolster Taiwan’s research into diseases commonly seen among Asians, such as diabetes.
Burrill & Co, which manages US$1.5 billion in investment funds, has injected US$7 million in drug maker Taiwan Liposome Co (TLC, 台灣微脂體) and US$10 million in JHL Biotech Inc (喜康生技).
Japan-based DCI Partners Co, YFY Biotech Management Co (上騰生技顧問) and the CID Group (華威國際創投) are also at the forum to look for investment opportunities.
“Over the past several years, Taiwan’s biotech industry has mainly been involved in preliminary research and development,” said Richard Shau (邵耀華), general director of Industrial Technology Research Institute’s (ITRI, 工研院) biomedical technology and device research laboratories.
“But now, products developed by a number of local biotech companies have passed phase two or phase three clinical trials, making them look more attractive to international venture capitalists,” Shau said at the forum’s opening ceremony.
A US-based consulting firm told the forum that Asia will lead sales growth in the global pharmaceutical industry between 2010 and 2015 because of its strong macroeconomic growth.
Andy Liu (劉安庭), president of Asia Pacific and China at IMS Health Inc, the world’s largest provider of market data to the pharmaceutical industry, said the global pharmaceutical market is expected to grow by about 5 percent, or US$250 billion, during the five-year period.
Asia, excluding Japan, will account for 31 percent of the US$250 billion sales growth, higher than an estimated 19 percent share for Latin America, 10 percent for North America, 10 percent for Europe and 8 percent for Japan, Liu said during his keynote speech.
The strong growth in Asia will largely come from the region’s continued growth in GDP, increasing healthcare spending and growing urban population, Liu said.
However, with all this growth in Asia, international venture capitalists should be aware that local players usually dominate in emerging markets, while multinational companies have a stronger presence in developed markets, he said.
In the first quarter of the year, for example, multinational companies accounted for 70 percent of the US$4.3 billion pharmaceutical market in Taiwan, which is classified by IMS Health as a mature market because its health insurance covers more than 99 percent of the population, Liu said.
In contrast, local players hold a 76 percent share of China’s US$51.6 billion pharmaceutical market, which is still seen as an emerging market because of the country’s lagging healthcare coverage, he said.
China is poised to overtake Japan as the world’s second-largest pharmaceutical market behind the US in 2016, jumping from ninth place in 2005 and third in 2010, according to IMS Health estimates.
The BioBusiness Asia is a four-day event that runs through Sunday. The two-day investment forum is being held at the Grant Hyatt Taipei, while more conferences, exhibitions and matchmaking activities are being held at the Taipei World Trade Center Nangang Exhibition Hall.