finds out from Clearbridge Accelerator’s Managing Partner Johnson Chen.
Tell us what does your company do?
Clearbridge Accelerator (CBA) was set up in 2010 as a Singapore technology incubator that aims to commercialize and translate core technologies from a laboratory into innovative products that result in sustainable and lasting enterprises. CBA provides the necessary funding, mentorship, operational and execution discipline to deliver determined and accelerated results. Our investment focus is on key emerging and high Intellectual Property (IP) disruptive technologies in the medical technology space.
CBA is supported by the Singapore National Research Foundation, under the Technology Incubation Scheme. CBA is also one of the recipients of SPRING Singapore’s Biomedical Sciences Accelerator (BSA) joint-funding program, where Clearbridge BSA was set up to manage a S$40 million Venture Capital fund specifically for medical technology start-up companies.
How do you see the development of bioentrepreneurship and how promising is its future in Singapore?
On the macro-front, it is a good time for Singapore-based start-ups within the biomedical sciences. As Singapore develops towards a higher value economy, these companies can leverage upon the continued developments and strategic growth in Singapore towards higher value-added capabilities. For example, Singapore has already established a strong reputation for high quality, high-value precision manufacturing, which is critical for many medtech companies. In addition, many large pharmaceutical companies are setting up operations in Singapore, and these organizations typically and hopefully will need support from or partnerships with biomedical sciences start-ups. Furthermore, the Singapore government is highly supportive of both biomedical sciences development and entrepreneurial high tech companies, with various incentive schemes and funding assistance in place. It is still early days, but there are many encouraging signs and is moving in the right direction.
Singapore has been ranked the 3rd most innovative country in biotechnology, yet we are not seeing an influx of local startups. Any comments?
The biotechnology start-up scene is very unique. It requires a mature economy, with an established infrastructure in place. There are various hurdles for biotech start-ups to overcome, such as stringent regulatory requirements, necessary IP management and high capital requirements. The biotech entrepreneur profile is also very different, and specific – tending to be more seasoned and experienced. However, there is still innovative biotech work going on within Singapore’s various research institutions and start-ups. In some cases, this research is being licensed to the larger MNCs, who are better suited to develop the product further and bring it to market.
It can be hard to grow a biotech start-up in Singapore as the Singapore biotech ecosystem is still very young and has not yet reached a critical mass. This will take time as the development timeframes for any new biomedical industry is typically measured in decades. For example, one of the critical components for any industry to develop is human resource talent. There is currently a very limited number of talents with the right skills and experience required to set up and run a biotech start-up. While there is a good supply of mid-tier and operational people in Singapore for the biotech space, there is a severe shortage of biotech business leaders and CEOs. This will take time to groom and develop, and will require a generation of biotech business leaders.
Financing is also critical for any biomedical startups, as the quantum and timelines are very different. It typically takes about 8-10 years to grow a biomedical start up, and will typically take in the region of US$ 50M – 100M to successfully fund a biotech start up from start to exit. In Singapore, there is a lack of mid-term capital, or the “Series B” investors for biomedical start-ups at this point. Medtech and biotech startups require a different set of investors and different risk profiles, and these biotech investments often have to compete with better understood investment opportunities in Asia (like property, etc).
Here’s an age-old debate – nature vs nurture. Do you feel that the spirit of entrepreneurship can be nurtured in a person such as a researcher or a person who naturally possesses the entrepreneurial spirit would be a better fit in the setup of a bio-enterprise?
I do not see it as nature “versus” nurture, but rather a combination of both nature and nurture working together to create a successful entrepreneur. Entrepreneurial skills can definitely be taught, and there are many courses occurring at the tertiary level to build an entrepreneur’s mindset. At the same time, some people will naturally gravitate towards becoming an entrepreneur, in a similar manner as to why some are more comfortable being risk takers.
As Clearbridge Accelerator works closely with University and research institutes, we do see a number of researchers who want to be entrepreneurs, and these individuals can be equipped with the right skills. However, entrepreneurship is a complex process. It requires not only the right business skills, but also having the right personality, which is a combination of the individual’s character, level of perseverance, self-belief, inter-personal skills, etc. I’d like to stress on the importance of the last trait, as biotech start-ups need a team of people. Very rarely would you see a single person being able to run a biotech enterprise, simply due to the associated complexities, such as the need for regulatory processes, clinical trials, quality manufacturing, sales/marketing, financing, etc. Again, this points back to the need to take time for this to develop in Singapore in order for these conditions to be right.
Where do you see the trend for startups in the next 5 years?
We are now in interesting times. We are seeing developments in a number of interesting areas that will further spur the biotech industry, such as big data processing, next generation sequencing, single cell analysis, better understanding of metabolic pathways, new materials (nanoscale), better computing power and image processing. The cost of these technologies has gone down, and the availability of these new technologies has gone up. This enables newer and better ways to do things particularly for the biomedical space. For example, microfluidics and computer aided diagnostics (complex image processing) have recently become more wide-spread, which in turn are boosting further developments in the biomedical industry. With the right support and availability of start-up funds, there are lots of new opportunities, but these will need to be carefully picked and analyzed.
With ballooning healthcare costs, I believe that cost will be a primary driver for the adoption of new innovative technologies. We are seeing trend amongst start-ups for developing new medical devices, such as diagnostic devices, companion diagnostics, health software, and alternatives to drugs. While most start-ups will leave developing new compounds to the large pharmaceutical companies, a number are focusing on developing an Asia-centric service model. This will see the start-up catering to Asian specific needs, or focusing on the differences in the Asian biology. I also believe that there will be pockets of innovation in Asia, exploring offering similar tests or service that are already available, but at significantly lower costs.
What is your message to young biotech entrepreneurs/startups?
Be prepared to tackle a myriad of complexities, which are likely to be far more daunting than other technology sectors. Because of this, it is recommended that biotech entrepreneurs work with an accelerator with support infrastructure, such as Clearbridge Accelerator, who has significant experience in building and growing biotech companies. Entrepreneurs also need to spend time on studying the market and planning, in order to be market led and really understand what the market needs. Build a good understanding on the product, its intended use, the clinical relevance/utility, sales channels and who are the payers. Make sure you talk to end users, the patients, doctors and the reimbursement personnel. And as always, you must be prepared for the long haul – building and growing biotech start-ups tends to take much longer.
About the Interviewee
Mr Chen is the Managing Partner for Clearbridge Partners, an Asian venture capital firm. He is also the Managing Partner for Clearbridge Accelerator, a Singapore National Research Foundation (NRF) backed high-technology incubator and an investment committee member of Clearbridge BSA Pte Ltd.
Prior to founding Clearbridge, Mr Chen worked at Pacific Century CyberWorks Limited, the incumbent and leading telecommunications company in Hong Kong. Mr Chen is a member of the pioneering team at PCCW and was the President of CyberWorks Ventures, the Venture Capital and direct investment arm of PCCW. Mr Chen was also the youngest member of PCCW's Mergers & Acquisitions executive committee, and was responsible for much of PCCW's strategic expansion and many of its successful acquisitions and investments.
Mr Chen has more than 12 years of entrepreneurship experience with start-ups, being the co-founder of 2 start-up companies with successful exits. Mr Chen has also given talks on entrepreneurship in Hong Kong and the United States, including the Sloan School of Management at MIT. Mr Chen is an active angel investor and was a member of the Hong Kong Science and Technology Park (HKSTP) incubator selection panel and a venture committee member of the Hong Kong Venture Capital and Private Equity Association (HKVCA). He is also currently a member of the Singapore NRF POC grant panel.
Mr Chen is the recipient of the prestigious Sword of Honour from the Singapore Armed Forces, and holds a B.A., M.A. and M.Eng from the University of Cambridge, (U.K.).
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