Singapore’s biotech industry is currently attracting some of the world’s best minds in science and venture capital.
If you yourself are interested in investing in Singapore’s growing biotech startup scene, there are a few things you should keep in mind.
Taking the following into consideration will allow you to make the most of your capital and to lessen the time it will take for you to make a return on your investment:
1) Availability of Required Space and Equipment
Biotechnology ventures can be quite expensive, thanks to the cost of the equipment and lab space needed for high-level R&D.
The venture will need access to laboratories with appropriate biosafety levels (BSL). For most commercial ventures, a BSL 2 lab will be what’s needed for advanced biotech research.
Thankfully, you can rent a fully equipped BSL 2 lab in Singapore, something that is not possible in most other large cities.
Biotech ventures could also rent space and equipment on an as-needed basis, helping them manage the cost of R&D.
In a generation or so, we may even see shared laboratories with even higher BSL ratings in Singapore, which may be beneficial for all kinds of cutting-edge biotech research.
2) Specific Market Demand
Biotechnology is not one field of study.
Rather, it is a collection of different related disciplines with applications in a wide variety of areas, including pharmaceuticals, cosmetics, energy, agriculture, space travel, food processing, waste treatment, and military technology, just to name a few.
Within each of those areas, there are problems that biotech startups may be able to solve.
As a biotech investor, you want to be sure that you can get a tangible return on your investments.
This means you may want to avoid investing in ventures whose offers lack a real market demand, do not promise useful products or patents, or are not compelling in the face of competing solutions.
3) Corporate Social Responsibility
Singapore takes corporate social responsibility seriously, so foreign investors used to more permissive markets may have to readjust to take advantage of the benefits of setting up a biotech startup in the country.
For this reason, biotech investors who are serious about making a positive difference may need to do their due diligence in understanding who their investments may affect, both positively and negatively.
4) Availability of Talent
As mentioned earlier, biotechnology is a remarkably complex field that has implications in many different areas. As such, you may not always have access to the expertise you need.
Fortunately, Singapore’s current status as a biotech and international business hub makes this less of an issue than it was in previous decades.
That being said, it may still be a good idea to brush up on Singapore’s startup visa schemes in case you need to bring in foreign biotech expertise.
5) Intellectual Property Issues
Modern biotech companies earn a significant portion of their income through their patents and other intellectual properties (IP).
When investing in a biotech venture, it’s not enough for the venture to have access to technology or own its own specialised BSL 2 lab. Ideally, it should also possess the IP rights to its own technology.
With its IPs locked down, the venture can earn royalties from other commercial ventures seeking to use its technology, offering a way to earn income without directly selling a product.
The business can also pursue research and development as well as marketing efforts without worrying about infringement from competitors.
Fortunately, Singapore’s IP protections are among the most robust in the world, making it attractive for biotech startup ventures.
6) Platforms and Systems
Because biotech R&D is very expensive, the margin for waste tends to be very thin.
Given this, the venture should have systems in place that maximise the use of all available resources and technologies.
Biotech ventures of all sizes should have a well-defined R&D pipeline as well as a system that allows the optimal allocation of labour and other resources.
Additionally, it may be a good idea to bet on biotech ventures that offer complete systems rather than individual products.
These tend to have a better return on investment, as they are more likely to develop multiple innovations that could be patented or leveraged into marketable products and services.
While it’s great to have a good team of researchers behind your venture, it’s almost always better to focus on having an experienced team of managers.
Generally speaking, the quality of management is a better predictor of success than raw talent. A team composed of the best researchers and specialists led by inexperienced or mediocre managers will almost always be outdone by an average team with stellar leadership.
What’s more, the members of the latter team will be more likely to grow into their roles and become better innovators and leaders with time, offering even more value to the venture, should they stay on.
Having good management talent onboard also ensures that the venture you’re investing in doesn’t waste an inordinate amount of time and resources.
Ventures with experienced management are also more likely to hit their stated targets, have a healthier appreciation of risk, and increase the value of the business.
Conclusion – Is It the Right Time to Invest in Singapore Biotech?
As with any investment, this is something that only you can answer for yourself. What is certain is that global biotechnology is already an anchor industry on which many other ventures hinge.
Therefore, success in biotech can often be parlayed into very big wins, provided you know what to look out for.
Locating a biotech startup in Singapore offers some key advantages.
It can take advantage of an already mature startup ecosystem that brings a lot of professionals and venture capital to the country.
Additionally, biotech ventures can expect a level of government and community support that may be unavailable in other markets. Perks such as rentable BSL 2 labs are available precisely because of a robust startup community and conscientious state sponsorship.
Singapore’s biotech industry is thriving, and the country is now considered one of the best destinations for biotech in the world.
By considering the points above, you can ensure better results when investing in one of the country’s most important and most promising sectors.
Biotech companies are mostly startups in Singapore but we can still find a coupled listed ones in Singapore namely:
- iX Biopharma – a specialty pharmaceutical company with expertise in drug delivery systems that has developed a proprietary sublingual wafer delivery, WaferiX
- TJ DaRenTang USD – a provider of Chinese patent medicine, biotechnology medicine and nutritional and health products. It has over 800 medicinal products in over 20 types of formulations.
- Biolidics – precision medicine medical technology company with a focus in developing a portfolio of innovative diagnostic solutions to lower healthcare costs and improve clinical outcomes.
- Hyphens Pharma Group – Singapore’s leading specialty pharma and consumer healthcare group which acquired supplements retailer Ocean Health a few years back.
If you would like us to do an analysis on any stock above, do let us know by leaving a comment below!