There have been several high profile deals and developments in Asia’s cancer treatment space over the last few weeks, showing the growing interest a range of investors have in the region's healthcare sector.
This includes a $1.5 billion investment from UK-Swedish pharmaceutical giant AstraZeneca in Singapore, a listing on the Hong Kong Stock Exchange (HKEX) by Chinese biopharmaceutical firm Sunho Biologics and an acquisition in Hong Kong by the New Frontier Group of the Hong Kong Integrated Oncology Center, a leading private oncology medical platform.
Garri Zmudze, general partner at venture capital firm LongeVC, told FinanceAsia on a visit to Hong Kong: “Asia is a growing opportunity for life science businesses and investors alike, because the region presents a unique set of circumstances for growth."
Zmudze, whose firm works out of Lugano, in Switzerland, and Miami, added: "The region’s potential is reflected in a flurry of deals in the cancer space in recent weeks.”
The investment by AstraZeneca was done in association with Singapore’s Economic Development Board, which works under Singapore’s Ministry of Trade and Industry, showing that governments are also spotting the investment opportunity in this area.
Sunho Biologics listed on the HKEX on May 24, and is focused on the development and commercialisation of biologics for the treatment of cancer and autoimmune diseases. The firm saw its shares, which had a final offer price of HK$13.5, climb 10% on the listing day and is also part of a wider trend of more companies looking to raise money via an initial public offering (IPO) on the HKEX as the city’s stockmarket looks to bounce-back from some difficult times.
The Nanjing City-based firm, founded in 2018, offered 34.1518 million shares globally, with the Hong Kong public offering accounting for 10%; it was 10 times oversubscribed. CICC was the sole sponsor, sole overall goordinator, sole global coordinator, joint bookrunner and joint lead manager on the deal, while international law firm O’Melveny acted on the deal led by partners Ke Geng and Ke Zhu. It was O’Melveny’s seventeenth Hong Kong IPO completed for Chapter 18A biotech companies.
The offering size was approximately HK$460 million (approximately $60 million).
Next generation cancer treatment
Cancer drugs have been developing quickly in recent years.
SunHo Biologics uses its understanding of immunology to develop immunotherapies including immunocytokines to treat cancers and autoimmune diseases. It has three products it has developed in-house, and is the middle of several trials including Phase II of clinical trials for biliary tract carcinoma and colorectal cancer.
AstraZeneca is building a manufacturing facility in Singapore for antibody drug conjugates (ADCs), to help enhance the global supply of its ADC portfolio. The manufacturing facility is set to be ready in 2029.
ADCs are next-generation treatments that deliver cancer-killing agents directly to cancer cells through a targeted antibody. The manufacturing of ADCs includes: antibody production; the synthesis of chemotherapy drug and linker; the conjugation of drug-linker to the antibody; and the filling of the completed ADC substance.
The move in Singapore follows a decision by AstraZeneca to open a new research and development hub focusing on gene and cell threapies in Hong Kong last November in the Lok Ma Chau Loop technollogy hub near mainland China. It will also include iCampus for start-ups and will partner with universiters and ventures in the space.
Sadly one of the reasons so many investors are looking toward Asia Pacific is that there has been an overall increase in the number of cancer incidences.
According to the World Health Organisation, gloablly over 35 million new cancer cases are predicted in 2050, an increase from the estimated 20 million in 2022. Lung cancer was the most commonly occurring cancer worldwide with 2.5 million new cases accounting for 12.4% of the total new cases.
Lung cancer’s re-emergence as the most common cancer is likely related to persistent tobacco use in Asia. In 2022, 49.2% of all cancer cases were in Asia, and the region also saw 56.1% of total cancer deaths.
In addition to governments looking for new treatments, as Asia's middle class grows there will be an increasing interest in private health insurance which covers such risks.
GBA
One of the regions in Asia where cancer investments are set to grow is the Greater Bay Area (GBA), which encompasses the Chinese province of Guangdong, and the Special Adminstrative Regions of Macau and Hong Kong.
Healthcare group New Frontier Group recently bought the Hong Kong Integrated Oncology Center (HKIOC). The HKIOC provies cancer treatment services, early diagnosis, radiotherapy, systemic treatments, mental health and other rehabilitation services.
New Frontier sees a “sizeable and growing patient population in the GBA” and it already owns the HEAL Medical Group, the Guangzhou United Familty Hospital and the New Frontier Shenzhen United Family Hospital. Collectively they are known as the New Frontier Greater Bay Area Healthcare.
In May, Hong Kong hosted the Asia Summit on Global Health where Hong Kong chief executive John Lee explained that life and health technology will be part of the Hong Kong-Shenzhen I&T Park, part of the Shenzhen-Hong Kong Science and Technology Innovation Co-operation Zone.
Lee said: “The Hong Kong SAR Government is also enhancing I&T support across the upstream, midstream and downstream sectors to fuel life and health science advances. The 16 life and health-related R&D (research and development) centres established in our InnoHK research clusters are yielding impressive research outcomes.”
He added the government has earmarked another $1.3 billion to further support life and health technology and welcomed global talent to Hong Kong to participate in the sector.
Other investors on the hunt
Private equity firms Carlyle and EQT have recently closed large funds in Asia which, among other sectors, are targeting healthcare firms in Asia, with Carlyle specifically targeting firms in Japan after closing its latest record buyout fund in the country.
There are also a number of specialist smaller investors in the sector based in Asia, or others based outside, looking to tap the market. These include the likes of venture capital firm Pureos Bioventures, while LongeVC is looking at the wider “longevity” market and is backing “visionary biotech” in the US and markets such as Japan.
LongeVC is set to launch a new $250 million fund in September 2024, LongeVC II, as it taps a global "$1 trillion opportunity for major age-related diseases and longevity interventions". It is aiming to make $5 million plus long term investments in helping companies develop drugs, mainly in the US, but the fund will also look at Asia.
Expect plenty more investment in this space in Asia over the next few years, which will hopefully lead to many lives being saved.
Please note one of the company names in the original standfirst has been updated.
