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Taiwan's biotech boom

What's fueling investor enthusiasm for biotech in Taiwan

As Taiwan's traditional growth sectors in IT, electronics and manufacturing have cooled, local investors have begun to look for new places to invest. Many are betting biotech is the next big thing.

Indeed, the last quarter of 2013 saw the largest-ever biotech IPO and follow-on in Taiwan, with these offerings beating the average amounts raised in the U.S. and Europe last year.

And on Jan. 17, local bellwether TaiGen Biotechnology Co. Ltd. completed its IPO on the GreTai Securities Market, which valued the late-stage anti-infectives play at NT$34.8 billion ($1.1 billion) - the highest post-IPO valuation for a biotech in Taiwan, according to the company.

Private companies have not been left out of the boom, as Taiwanese VCs invested in B rounds for biotechs comparable in size to those seen in the U.S.

The enthusiasm has been fueled by the return of Taiwanese steeped in the ways of Western biopharma companies, and investor appetite for riskier investments.

"Investors want to see the high-growth returns as with IT, so they're willing to take a risk for it," according to Carl Firth, CEO of privately held in-licensor Aslan Pharmaceuticals Pte. Ltd.

In addition, Taiwan offers an easier path to the public markets for small and medium-sized companies than some other Asian countries, leading some foreign companies to list on the GreTai instead of their domestic exchanges.

Companies and VCs who spoke to BioCentury acknowledge the sector's current reliance on inexperienced investors who are not adequately accounting for risk will likely result in some degree of correction in the medium term. However, they expect the investor base to mature alongside the companies, laying the foundation for longer term, rational growth.

Heating up

The last quarter of 2013 saw some of the largest biotech financings ever done in Taiwan.

In December, high-barrier generics company TWi Pharmaceuticals Holding Inc. raised NT$3.3 billion ($111.5 million) through the sale of 13.3 million shares at NT$248 in an IPO on the GreTai that valued the company at

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