October, 2018:
As China Hunts For New Cures, Investors Flood U.S. Biotech Firms With Cash forbes.com/sites/ywang/20…
As China Hunts For New Cures, Investors Flood U.S. Biotech Firms With Cash forbes.com/sites/ywang/20…
Chinese investors are putting record amounts of money into U.S.-based biotechnology firms as Beijing seeks to become a powerhouse in developing new medicines, but the investment rush is also fueling concerns that valuations are being pushed to unsustainable levels.
Private U.S. biotech startups had raised $9.76 billion in funding as of September, an amount already surpassing the $8.19 billion global investors had pumped into the sector last year.
And China has become an important source of that capital, with the country’s investors accounting for nearly 30% of the total funding biotech companies have received so far, slightly up from last year’s 28%, but a steep jump from the 3% recorded for 2016.
China’s government is hoping that the increased investments can help to entice more foreign companies to bring their products, services and expertise to the world’s second-largest economy.
For a country that has long been known for only making generic and copycat drugs, China’s aim now is to establish a leadership position in biotech by 2025 – as well as in emerging strategic industries like robotics and AI.
U.S.-based startups are taking note of the new opportunities. American startup Driver, which matches cancer patients with treatments and clinical trials worldwide by analyzing their tissue and medical records, started in September to sign up patients in both China and the U.S.
Horizons Ventures, an investment firm belonging to Hong Kong billionaire Li Ka-shing, is the lead investor in the two-year-old company, which has raised more than $90 million to date.
Chinese money is showing no signs of drying up any time soon. This is because American firms are still global leaders in terms of biotechnology, so China will continue to welcome new medicines from the west.
“People will keep investing in this field and think about how to fill the vacuum in China,” Qiming’s Leung says. “But there are also teams in China doing researches on their own. So, we need to explore how to balance opportunities on both sides.”
