EVX Ventures seeks to incubate, acquire biotech firms in China as part of global ecosystem strategy

Xiang Qian (XQ) Lin, CEO of Esco Lifesciences Group

Armed with $200 million funding led by Vivo Capital and Novo Holdings last month, Singapore’s Esco Lifesciences Group (ELG) is looking at an accelerated expansion in China, creation of an innovation hub in Boston, acquisition of Western technologies and bringing them to the Asian market, as well as pursuing an active M&A strategy.

“We are building a global life sciences ecosystem between Singapore, the US and China, with Singapore as the focal nexus,” ELG CEO Lin Xiangqian said in a video interview with DealStreetAsia from Shanghai.

“There’s a unique opportunity for us to bridge talent, technologies across the world, with a focus on the Chinese market and provide a platform to take some of these Chinese products global,” he added.

ELG was founded in 1978 by pharmacists Lim Lay Yew and Lim Yae Foong as a cleanroom technology company, the first of its kind in Southeast Asia. Subsequently, their son Lin Xiangqian joined the family business and assumed the role of CEO in 2011. He has helped evolve the business through global market and product portfolio expansion and M&As.

Meanwhile, Lin, in a personal capacity, founded EVX Ventures in 2015 which seeks to create a bridge between Singapore, China and United States’ Boston, specialising in incubating and building biotech companies.

In June last year, Carmine Therapeutics, co-founded by Lin and incubated by EVX Ventures, clinched a $900-million deal with Takeda Pharmaceutical to collaborate on the development and sale of non-viral gene therapies targeted at two rare diseases.

Alongside Boehringer Ingelheim Venture Fund (BIVF), EVX Ventures had also recently co-led the $24-million Series A round for homegrown biotech startup Nuevocor that develops gene therapies for cardiomyopathies.

Edited excerpts of the interview:-

Could you take us through how EVX Ventures works?

At EVX Ventures, we provide seed capital and, alongside founders, put the companies together. We are usually in the driver’s seat or have significant ownership. It is more of a platform to turn the science and IP that is coming out of places like A*STAR in Singapore and other places in Asia into commercially viable companies.

We then put them on the world stage in Boston, attract global investors, secure capital and establish partnerships with pharma companies and then lead them towards potential capital markets or M&A. So that’s what we started with in Asian Science, especially from Singapore, bringing it into the US on a global stage – getting global resources, validation and experience management.

Now we see the opportunity to also incubate companies in China. China has the money and the market. A lot of people want to incubate companies in China. Some of the large, almost private equity shops have been doing a lot of in-licensing and some of them have been very successful. How we differentiate ourselves in China is that we are focused more on the early-stage discovery platforms. The in-licensing model is being recognised as reaching that tail end where there are more strategics, which would be receptacles for these assets, and the upfront fees have become quite expensive on these transactions. So we are here in China to pioneer a new path – more of a discovery platform base, global incubation – in China, the US and potentially Singapore as well. They are part of this constellation and we are quite excited.

In the US, three of our incubates – Carmine, Nuevocor and PairX Bio – are world-class innovative science companies. We are leveraging that expertise and carving out a unique position for ourselves in China. We have two more companies in stealth, and those will be unveiled soon.

We have done some investments as well. We have been one of the earlier investors in Hummingbird Bioscience and we also joined the syndicate of US-based AltruBio.

In ELG’s recent funding round, you said that ELG will use part of the funds for M&As. Are you looking at acquiring more companies or investing in more companies?

It is more about acquisitions, classic consolidation play and buyouts. We have closed the first deal in China. We have a very active pipeline in China and also globally. There will be more announcements in the next few months. The thesis is that, in Asia, the life science tools segment is still very fragmented. There’s a lot of consolidation opportunities. We believe we have a unique platform with a global market reach to facilitate this consolidation play with the focus on the Asian market, in particular China.

As the chairman for both ELG and EVX Ventures, on acquisition targets or potential incubatees, what are your different considerations in terms of the type of companies or expertise? 

It’s different across ELG and EVX Ventures. For ELG, we are looking for differentiated products and technologies that we can commercialise globally. For EVX Ventures, we are looking for innovative science, therapeutics and drug discovery platforms.

You have worked in the US, China and Europe. What are the gaps in the healthcare and bio-pharma industries in Asia that Esco Lifesciences Group has identified and is seeking to fill?

China is in catch-up mode, rapidly wanting to demonstrate its own industrial powers and indigenous technologies and products. But I think a lot of the critical inputs, the supply chain, are still not fully intact in China. This whole import substitution has been going on for many years in China. There’s still a lot of gaps and we hope to play our own small part of bridging products and technologies globally.

I think there’s real innovation going to be coming out of China so we hope to take it global via our ELG global platform. Meanwhile, there’s very little expertise on the discovery platform type of incubation and company building. I think EVX Ventures is definitely one of the first movers. Starting out from Singapore in as early as 2015, we incubated companies. I think we have learned how to do this as we have these three companies that have got global validation already.

We are also excited to bring this flavour of company building to China. For example, how do you translate IP from academic institutions into a company? There’s a lack of expertise even in China. It has been the case in Singapore and, you might even say, still the case in Singapore. But EVX Ventures developed a platform to address that and we have demonstrated and validated this platform in Singapore and hope to bring it to China as well.

What are some growing medical needs that ELG or EVX Ventures are focusing on?

ELG is directly present in the infertility IVF space providing the technologies for laboratory procedures. Speaking generally, there is an aging population, there are many needs ranging from oncology to rare diseases and the companies that EVX Ventures is building are developing next-generation drugs, tackling these issues. But each EVX Ventures-incubated company is focusing on different diseases or different biology so it would be very precise in targeting.

For ELG, we are upstream so we are providing the tools and services to the biopharma companies that do the drug development or the research and the clinical trials so I can’t say that ELG is focused on any specific disease area except Esco Medical that is involved in IVF and infertility.

For EVX Ventures, we are focusing more on platform companies where the platform can be applied to multiple diseases across multiple therapeutic areas. So it is less about just being a cancer company, an autoimmune company, or a neuroscience company. We are more at the platform level and that’s where the excitement is. That’s where Wall Street is excited about.

Are there any synergies possible between ELG, EVX and EVX’s portfolio companies?

ELG can supply the picks and shovels to the gold miners (the EVX companies). ELG is also entering contract development and manufacturing business (CDMO) so ELG could provide CDMO services to those EVX companies potentially, at arm’s length.

Originally from Singapore, ELG is now focusing on the Chinese market but it is also global and has been in the US for many years.

Do you use Singapore for your R&D centres or is it for your IP protection?

It depends on the company and the venture. For ELG, when it comes to a consolidation play or geographical arbitrage, Singapore has a unique advantage given the bifurcation of the supply chains.

For EVX, Singapore has great IP that we are harnessing from places like A*STAR and then we are taking these companies global. Like with Carmine Therapeutics, the IP came from Hong Kong, we incubated the company in Singapore and expanded to Boston. We did the big deal with Takeda last year. We still have a strong research operation for Carmine in Singapore that we intend to build out and expand.

I must say there’s also great technology and innovation in China now so we think that as a global company from Singapore, we can also be a platform for these Chinese technologies and products to go global. We have done the first transaction in Shanghai. We have a few other transactions that will be announced by the end of the year.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.