Beyond Borders: Global biotechnology report 2010

The year saw some examples of global
biotechnology companies collaborating
with state-run institutes on research
initiatives. In March 2009, US-based
FORMA Therapeutics collaborated with
Singapore‘s Experimental Therapeutics
Center to discover novel compounds based
on FORMA’s transformative chemistry
platform. FORMA has also established
its first overseas laboratory in Nanyang
Technological University. Meanwhile,
Singapore Immunology Network, a research
consortium under Singapore’s Agency of
Science, Technology and Research, has
partnered with two European biotech
companies — Humalys SAS and Cytos
Biotechnology — to develop antibodies
targeting viruses prevalent in Asia,
including hand, foot and mouth disease.
The global recession
The global economic slowdown has
exacerbated the challenge of raising
funds for the biotechnology industry in
Singapore, where local financing options
are limited and the industry has to largely
depend on investments from global players.
With venture capital and equity market
investments drying up for most biotech
companies, the Government of Singapore
made concerted efforts to help the industry
stay afloat. The Government introduced a
“jobs credit scheme” in its 2009 budget to
provide companies with cash grants to help
retain employees during the downturn.
As in other parts of the world, the
challenging capital situation has heightened
the focus on extracting more value from
existing assets and capabilities as well
as on acquiring assets of ailing biotech
companies. In October 2009, Singaporebased
vaccine research player SingVax and
US-based Inviragen merged to integrate
their vaccine pipelines that are focused on
infectious diseases prevailing in developing
44 Beyond borders Global biotechnology report 2010
nations. The merged company also raised
a US$15 million equity investment from
a syndicate of private equity and venture
investors. In July 2009, Transcu Group
acquired a 45% equity interest in the
Japanese Biomass Technology Company
for a total consideration of ¥27 million
(US$277,560). Biomass Technology
Company has developed capabilities to
produce biofuels from inedible biomass
without fermentation.
Outlook
Cost advantages, best-in-class infrastructure
and strong Government investments
have made Singapore an attractive
manufacturing location for multinational
drug companies. However, cross-country
cost advantages tend to be short-lived.
Singapore has been sweetening the pot with
large tax incentives, which may also prove
unsustainable in the longer term. To take
its success to the next level, the city-state
will need to bring its focus and resources to
fostering homegrown innovation.