Asia to gain from biotech investments

Asia to gain from biotech investments

Jill Wong, Reuters, Hong Kong

Asia is set to reap substantial benefits from rising investment in biotechnology despite sinking regional equity markets, industry leaders said on Monday.

"Our primary interest (in Asia) are in China and South Korea," Donald W. Grimm, chairman of the life sciences advisory board at Hamilton Apex Technology Ventures LP, told Reuters.

Biotechnology investments are insulated from soaring risks in equity markets as it mainly relies on private equity for financing, Grimm said in an interview.

Grimm said nagging anthrax scares has not had any impact on Hamilton's business strategy as there were already many other companies in the market with drugs and treatments for the disease.

"Vaccines and treatments are available. From a science standpoint, there's not much that can be done in the short term by biotech companies," he said. "Fighting bioterrorism takes time...it is one of our many long-term goals for development."

Hong Kong-based electronic parts makers TechCap Holdings Limited on Monday announced plans to invest up to US$10 million in the U.S.-based venture capital firm Hamilton Apex Technology Ventures LP, with the first tranche at $2.7 million.

This brings Hamilton Apex's fund size to $165 million, with most of the money to be invested in early stage start-up biotechnology companies in the United States.

While Hamilton has invested in eight companies since its establishment in 2000, it has not made any divestments due to the company's strategy to lock in for a minimum of between three to five years.

The China market offers vast growth potential for biotechnology investments -- the country's consumption of healthcare products is currently at $7.0 per capita, as opposed to $220 per capita in the United States.

"China is a large market and there is a growing need for new kind of healthcare technology," Grimm said.

The biotechnology industry in China posted revenues of $2.41 billion by end-2000, while investments in biotechnology amounted to $1.2 billion, but these are set to grow.

Biotechnology revenues in the U.S. are estimated at some $47 billion, according to management consultants Ernst & Young.

"We're very bullish about the money that's flowing into biotechnology," Grimm added.

The investment will see employment in biotechnology -- at some 430,000 in the U.S. -- double in the next 10-15 years.

Besides TechCap, Hamilton Apex has also forged another strategic partnership with South Korea's Apex Technologies Investment Co Ltd.

Besides China and South Korea, Taiwan, Singapore and India are also set to see more capital flows into biotechnology.