Singapore’s next challenge: turning momentum into sustainable growth
The island nation has caught the interest of international investors and pharmas. Will this be the moment its biotech accelerates?
Singapore may still be waiting for its first biotech bellwether, but it’s turned a corner in the eyes of many in the West. An influx of investor interest and recent launches of globally minded incubators in the country signify a step-up in attention to the country. But Singapore faces the same questions as all emerging hubs: what does it need to do to cement a position on the global biotech map?
The second half of 2023 brought a flurry of news out of Singapore, including launches of three incubator-like initiatives and a steady stream of company formations and financings. Coupled with its established expertise in manufacturing, and the growing number of Western and China-based companies that view the island nation as a geopolitically safe place to conduct business, Singapore has fair grounds for optimism it can grow its footprint as a biotech hub.
“The idea is to get start-ups to think globally from day one.”
Though progress has waxed and waned over 20-plus years, that same period has seen many regions try, with differing degrees of success, to establish biotech hubs. For Singapore, it’s clear that the homegrown start-ups must look beyond the country’s borders for a sizable market for their products (the country’s population is only about 5 million people) as well as for the funding and expertise that are still limited in the region.
“The idea is to get start-ups to think globally from day one,” ClavystBio CEO Khoo Shih told BioCentury.
ClavystBio was created by Singaporean global investment company Temasek, and is among the driving forces behind the maturation of Singapore’s life sciences ecosystem. The firm formally opened its life sciences collaboration space for newly formed companies, called Node 1, on Oct. 4.
The plan, said Khoo Shih, is to give companies support that extends beyond funding, helping them raise their profile and expand their network to seek broader investor support and potential partners. “We believe in global connectivity, creating partnerships, bringing a global perspective.”
Hindsight will say whether this is a turning point, but the momentum through the end of last year has enough heavy hitters that it’s likely to at least bring new eyes to the opportunities from stakeholders who haven’t yet paid attention.
In October, the day after the announcement of Node 1, ClavystBio, along with a syndicate of three other VCs — Leaps by Bayer, Lightstone Ventures and Polaris Partners — and Germany’s Evotec SE (Xetra:EVT; NASDAQ:EVO), launched 65Lab, an early-stage incubator that aims to move academic projects through the steps toward company formation,
65Lab will invest up to $1.5 million in each project over 18-24 months, providing mentorship along the way and advancing projects to the point where they can attract start-up funds. Graduates of 65Lab could, for example, be candidates for entering ClavystBio’s collaboration space. Evotec brings drug development expertise to the initiative, and has established a physical site at the incubator.
Together, 65Lab and Node 1 create a continuum of support for translating Singapore’s best science into commercial development plans, and they join other incubator-type initiatives in the region such as A*STAR’s Innovation & Enterprise office, which intends to do more company creation going forward, Su Ling Yeo, director of venture creation and growth, told BioCentury.
A*STAR (the Agency for Science Technology and Research) is one of several local agencies engaging with external stakeholders to ramp up involvement in Singapore.
Johnson & Johnson (NYSE:JNJ) has also joined with a government-backed entity to build its presence in the early-stage start-up landscape.
On Sept. 27, Johnson & Johnson Innovation and Singapore’s Economic Development Board launched an initiative through which J&J will provide resources to support translational projects, work with sources of capital, and draw talent to the country.
It’s not just Western companies and investors setting up shop in Singapore, major players in China also see the value in doing business there. WuXi Biologics Inc. (HKEX:2269) announced in 2022 that it was setting up a CRDMO center in Singapore that would offer R&D services and “large-scale” manufacturing facilities for biologics.
Other major companies who have placed some significant bets in the region recently include BioNTech SE (NASDAQ:BNTX), which announced in May 2021 it would establish the first mRNA manufacturing facility in Singapore.
The site will represent the Asia regional headquarters for BioNTech, a choice that bridges between the manufacturing center that Singapore has been known for — BioNTech acquired the GMP-certified manufacturing facility from Novartis AG (SIX:NOVN; NYSE:NVS) — and the center of innovation the city-state aspires to become. In addition to mRNA-based vaccines and therapeutics, the facility may expand to other drug classes such as cell therapies, creating a talent base in next-generation modalities from which companies will be able to recruit as they move into clinical development.
BioNTech’s mRNA competitor Moderna Inc. (NASDAQ:MRNA) announced in 2022 that Singapore would house one of four subsidiaries it was establishing in Asia for manufacturing and distributing its COVID-19 vaccine and future mRNA vaccines and therapeutics. The other three are in Hong Kong, Malaysia and Taiwan.
The momentum is reinforced by rising venture activity from Western and China VCs building their presence in Singapore.
In November, Flagship Pioneering announced the opening of a regional hub in Singapore as it seeks to expand in the Asia-Pacific region.
Also in November, Seattle-based Accelerator Life Science Partners, which now has a permanent presence in Singapore, announced its first investment in the region, co-leading a $16 million series A round with ClavystBio in Automera Pte. Ltd., a start-up with a new take on targeted protein degradation.
On the China side, CBC moved its headquarters to Singapore from Shanghai, and Lyfe Capital set up an office and is building its presence in the region.
At least 12 venture rounds were disclosed by Singapore-based biotechs in 2023, a slight increase over 2022, even as the prolonged downturn slowed venture funding elsewhere.
Though the numbers pale in comparison with the U.K., they aren’t far off of the venture activity in other European countries that have been steady contributors to global biotech. Moreover, the buildup in the last three years, in the context of stated intent from firms such as Polaris, Flagship, Novo Holdings, Lightstone and others, could encourage the next innovators to take an entrepreneurial route.
The drive is clearly in early-stage funding for Singapore biotechs. In 2021-23, of the 34 financings, which were raised by 29 companies, at least 44% were seed or series A rounds (3 and 12, respectively); the proportion may be higher as 10 of the rounds had an undisclosed series.
Polaris has been one of the most prominent Western VCs in the region. Managing Partner Amy Schulman, speaking on The BioCentury Show last June, said she sees a “wealth of academic science hungry to be translated” that dovetails with Singapore’s business-friendly environment. That environment, she said, includes respect for IP, data integrity, and a culture that enables predictability in terms of timelines and administrative processes.
Novo Holdings has also planted a footprint in Singapore, establishing an Asian life sciences platform in 2020 to invest from three of its life science investment areas in Asia: Principal Investments, for established companies, Novo Growth, for expansion capital, and Novo Ventures for venture-stage biotech. In 2021 it led the $125 million series C round for Hummingbird Bioscience Pte. Ltd. and co-led the $200 million series A round for Esco Lifesciences Group.
Lightstone has also been dedicated to helping build the start-up ecosystem. It created a $50 million Singapore-focused fund in 2016 which has invested in biotechs such as Allay Therapeutics Inc., Locanabio Inc., MediSix Therapeutics Pte. Ltd. and Gemini Therapeutics Inc., which reverse-merged to form Disc Medicine Inc. (NASDAQ:IRON) in 2022.
MediSix is headquartered in Singapore, and was founded based on technology from the National University of Singapore that could overcome the challenges preventing use of T cell therapies to treat T cell-driven cancers. MediSix leveraging its protein expression blocking technology to prevent CAR T cells from expressing the same protein they are designed to target on cancer cells. The biotech’s most advanced program, PCART7, is in clinical testing for three types of leukemia. Behind its cancer programs, MediSix is also pursing cell therapies for autoimmunity. The biotech has raised about $62.9 million in venture since its founding in 2016.
Allay was founded in 2017 around drug delivery technology developed in Singapore, with support from Lightstone and California-based device incubator The Foundry.
According to Allay CEO Adam Gridley, Lightstone saw an opportunity to develop the tech for polymer-based drug delivery, for example, via implants that can steadily release non-opioid analgesics over weeks rather than days. “Instead of grabbing the technology and taking it back” to the U.S., Gridley said “they decided ‘let’s see what we can do here in Singapore’.”
Though Gridley himself is U.S.-based, Allay had only two to three people in the U.S. for years. The company has since built up the U.S. contingent but continues to rely on its Singapore team for R&D, which has partly shifted focus to the early-stage pipeline behind the company’s lead Phase IIb program. The U.S. team is responsible for clinical development and regulatory.
Allay has raised $92 million across series A, B and C rounds from a mix of Singpore-based and international investors.
Gridley told BioCentury that at the time the company was created, “You had two ends of the spectrum in Singapore — great hospitals and universities” on one end, and “an incredible ecosystem in terms shipping, distribution and some manufacturing” on the other. The pieces in between were still developing, he said.
Much of the momentum in the past few years has been to fill that gap, with the goal to create an infrastructure that can allow companies to build product engines that go from preclinical proof of mechanism though clinical proof of concept.
Despite the rise in Western VC interest, the most active investors in 2021-23 were government-backed venture arms: EDBI, with 14 disclosed rounds in biotechs, and Seeds Capital — the venture arm of Singapore Enterprise — with five.
To be a sustainable ecosystem, Singapore has to be able to weather some failures. Immunotherapy company Tessa Therapeutics Ltd. shuttered one year after raising a $126 million series A round led by Polaris, after it was unable to raise more funds or find a buyer, in part due to the tough financing environment at the time. That hasn’t deterred Polaris, which led a $27 million series A round for Singapore-based Engine Biosciences Pte. Ltd. in October. The Tessa team is also ploughing ahead, building a newco — Tikva Allocell Pte. Ltd. — around its assets.
Certain parallels to other biotech hubs may bode well. The creation of the 65Lab has similarities with the Francis Crick Institute in the U.K., whose formation in 2016 was an important factor in helping to spur the growth of biotech in that country by boosting translational science capabilities. The presence of pharma research arms — rather than only manufacturing — and investors with boots on the ground have been important to areas such as Basel, San Diego, Belgium and the U.K.’s Golden Triangle, not to mention the standout performer of Boston.
A major milestone will be the ability to create a home-grown company with global impact that becomes a bellwether for the country, or even a significant acquisition such as what the takeout of Inflazome Ltd. by Roche (SIX:ROG; OTCQX:RHHBY) did for Ireland. With several among Singapore’s current crop of companies now in the clinic, the next step will be generating meaningful clinical data that can drive broader and sustained investor interest to fuel the next phase of progress.
Join BioCentury, BayHelix and McKinsey March 4-6 in Singapore for the third East-West Biopharma Summit.