Novartis Venture Funds looking for biotech investments

By Camaron Kao  /  Staff reporter

Thu, Sep 12, 2013 - Page 13

Switzerland-based Novartis Venture Funds is seeking investment targets in Taiwan to invest US$15 million and US$20 million per company in the biotechnology sector, the firm said yesterday.

Novartis Venture Funds is an arm of pharmaceutical company Novartis International AG. It has already invested biotechnology companies in China and South Korea.

“Five local companies recommended by the Institute for Biotechnology and Medicine Industry briefed us this morning,” Margaret Chang, senior manager of drug maker Novartis Taiwan Co, said on Tuesday on the sideline of 2013 International Biomedical Venture Forum.

Chang declined to give the names of the firms, but said that two made cancer drugs, one was a diagnostic medical device provider, one produced medical equipment and the other was a research institute.

“We are looking for biomedical firms that can leverage the highly developed information technology industry in Taiwan,” said Reinhard Ambros, global head of the venture firm.

Before making any investment, Ambros said the company would have to form a research team to look at potential targets, or find local partners.

“We need people who have local knowledge and can speak the local language,” he said.

The US$800 million Novartis Venture Funds makes an average of five to eight new investments a year, Ambros said.

Meanwhile, John Hsuan (宣明智), vice chairman emeritus of United Microelectronics Corp (UMC, 聯電), the world’s No. 3 contract chipmaker, indicated that he was interested in investing in Taiwan’s biotechnology sector.

“The biomedical industry in Taiwan is of great potential, but we still lack a flagship company,” Hsuan said, adding that he could contribute to the growth of local biotechnology firms by injecting capital.

Hsuan said he has initiated an angel fund to make such investments. The fund has attracted 70 members, besides himself, each of whom can invest at least NT$50,000. He declined to reveal the size of the fund.

However, he said the fund has invested in five local companies, three of which are biotechnology firms.

However, Lu Hong-bo (盧洪波), executive director of US-based private equity and venture capital firm OrbiMed Advisors LLC’s Asia branch, was more cautious about investing in the Taiwanese biotech sector.

“The valuation of Taiwanese biomedical companies is higher than their peers in Hong Kong and the US, making us wonder whether there is a biotechnology bubble here,” Lu said. “There seems to be too much money chasing too few targets in Taiwan.”

Lu said she expects there will be corrections for share prices of local biotechnology companies, but in the long term such firms will still be growing.