BIO EUROPE 2018

European biotech an attractive option for Chinese investment, says VC exec

By Flora Southey contact

- Last updated on GMT

(Image: Getty/masterSergeant)
(Image: Getty/masterSergeant)

Related tags: China, Europe, Venture capital

Chinese investors are looking abroad for technology that will provide short-term returns and long-term health benefits to its large patient population, according to Panacea Ventures partner.

Two primary factors are driving Chinese investment in the European biotech market, according to speakers at BIO Europe last month: China’s growing economy, which stands at $20.4tn​ (€17.5tn), and an immense population of 1.4 billion.

China’s gross domestic product (GDP) wealth is increasing every year, Panacea Ventures partner, Katherine Cohen, told delegates in Copenhagen last month, continuing: “[the] economic growth of China in the last few decades is phenomenal…This [has] resulted in an accumulation of [wealth] in assets and capital.”

As a result, both private and public sectors are looking to invest in the next-generation ‘something’, she said.

The government has identified biotech as one of the most promising technology areas, so public and private investors are looking into this sector, she continued.

China has already demonstrated a strong interest in biopharmaceutical development internally, via investments in modular bioprocessing facilities – such as BeiGene’s adoption​ of GE Healthcare Life Sciences’ ‘off-the-shelf’ KUBio factory – and Cellular Biomedicine Group Inc (CBMG)’s use of GE’s FlexFactory technology​ for CAR-T therapy production in Shanghai.

Externally, some Chinese firms are showing interest site networks to Europe. Just last week​, contract development and manufacturing organisation (CDMO) WuXi Biologics commenced construction on its first site outside of China – a single-use biomanufacturing facility in Ireland.

Healthcare demand

High demand for healthcare technology, driven by China’s large population, is also contributing to investor interest in European biotech, according to Cohen.

“Everybody knows that China has so many people, and the biggest patient group. However, the treatment and availability of medicines are not really up to speed.”

Therefore, investors are looking overseas for technologies and assets for the Chinese market that provide short-term returns and long-term health benefits, said Cohen.

Chinese firms particularly are interested in European science and technology: “Europeans traditionally have a very good education and innovation base. Europe certainly gives a lot of opportunities,” ​she added.

The continent’s proximity to China is another attractive factor: “Geographically, not only is it closer to China than the US…the political environment and regulations [make] Europe a ‘sweet spot’.”

Greg Scott, chairman of ChinaBio Group, agreed that Europe is an attractive option, highlighting that investor decision making goes beyond the technology itself.

“There is always, I think, a Chinese ‘flavour’ to a lot of the Chinese companies and investors [in terms of what] they’re looking for,” ​he told delegates.

No matter where the technology is sourced, Chinese investors are “looking for assets…that will apply to the market in China, as well as [assets] that will mesh with them…culturally.” 

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