Biotechnology investments globally have seen a strong shift towards Asia. The devil's in the detail, however, regarding the key driver for the shift.
Global VC Investments in Biotechnology, By Stage
Source: S&P Capital IQ, share measured by deal value.
Big Picture Numbers
- Global VC Investments in Biotech have seen sizable shifts in regional distribution towards Asia/Pacific over the last two years.
- While investments over three years from 2017 to 2021 suggest the dominance of companies from the United States and Canada remains strong, that dominance has been waning of late.
- Biotech firms in North America have seen their share of global VC investments increase from 69% to 80% from 2017 to 2019; the trend, however, reversed in 2020, when the region saw its proportion retreat to 64%.
- Asia / Pacific was the most significant driver of the change as its proportion rouble from 11% in 2019 to 22% in 2021.
A Biotech Banker's Perspective
by Andrew Heartly, CEO of Third500 Pte Ltd
"Investments in Asian biotech firms have seen significant growth in recent years. The trend is robust in China, where the venture capital space is well funded domestically and by foreign funds looking for opportunities there. Over half of all biotechnology deals coming out of Asia are done in China. That's huge, and not being discussed enough among investors. The decreasing dominance of North American biotech deals is not so much about its weakness but Asia's increasingly strong VC environment."