Asia’s largest biotechnology exhibition Bio Asia-Taiwan was just held in Taiwan in July. CDIB Capital (hereinafter referred to as “CDIB”), a subsidiary of China Development Financial (hereinafter referred to as “CDF”), says it is raising NT$3bn Healthcare Fund II. The fund will invest in three themes, including biotech pharmaceuticals, medtech/digital healthcare as well as consolidation and restructuring opportunities. The new fund has three major advantages: exclusive channels of business opportunities, a well-versed investment team and multiple exit strategies.
- Draw on global biotech resources to explore quality business opportunities
CDIB leads in the venture capital and private equity markets in Taiwan. James Ho, Chairman of CDIB Capital Healthcare Ventures, says that in order to combine more domestic and overseas sector resources, CDIB has joined the Taiwan Bio Industry Organization and reached out to Biotechnology Innovation Organization (BIO), the largest biotech association in the world. This year CDIB sponsored BIO Asia-Taiwan, Asia’s largest biotech exhibition, to exchange ideas with global opinion leaders in the biotech industry, academic and government agencies. CDIB has also joined Johnson & Johnson Innovation Investor Hub, a globally renowned entity, to explore quality investment opportunities.
- Taiwan value-added strategy; upbeat on outlook of Taiwanese biotech market
The US leads in the global biotech sector, with many breakthrough diagnostic methods and innovative treatments over the past ten years, such as cancer immunotherapy and CAR-T, which serve as a driving force for the development of the biotech sector worldwide. Meanwhile, Taiwan’s biotech sector grew strongly in terms of output value despite short-term effects of the capital market.
James Hsu, President of CDIB Capital Healthcare Ventures predicts that the market cap of Taiwan’s biotech sector will hit US$30bn over time, supported by the government’s 5+2 initiatives, including the opening up of laws regarding cellular immunotherapy and the OTC market’s biotech firm IPO policy. Among the biotech subsectors, highly profitable National Health Insurance-themed, medical supplies and aesthetic medicine stocks are growing rapidly and pharmaceutical firms have had major licensing projects in 2019, helping gradually restore market confidence.
On the digital healthcare front, tech giants such as Apple and Amazon have impacted the global healthcare system with paradigm-shifting concepts, changing the focus from the traditional paying side, such as health insurance agencies, to consumers and patients. This change will bring business opportunities for Taiwanese companies. As Taiwan has quality clinical services and IT advantages, and with tech giants scrambling to jump on the bandwagon, digital healthcare will become a new investment bright spot.
CDIB has accumulated years of experience in biotech investment. Building on the foundation of the first Healthcare Fund in 2014, the new fund will adopt a “Taiwan +” investment strategy, using Taiwanese talent to connect to the world. The fund plans to invest over half of its money in Taiwan-related vehicles and the remainder in overseas markets, including Asia-Pacific, Europe and the US.
- Global asset management; strong ability to grab business opportunities
The Healthcare Fund team has over 15 years of experience in investment and the biotech sector. It has a good grasp of industry trends and strong ability to obtain business. CDIB’s successful investments include PharmaEngine, Foresee Pharmaceuticals, TWi Pharmaceuticals, Lotus Pharmaceutical, and Apexigen, all in the pharmaceutical field, as well as St. Shine Optical, a medical device firm, and ShareHope Medicine, a channel service firm.
Aside from the Greater China region, CDIB has invested in over 40 equity funds worldwide and has closely cooperated with global biotech venture capital funds. James Hsu says biotech investment has a long investment period and requires significant funds up front. As Taiwan’s funds are generally small, cooperation and co-investment with top-notch global venture capital and private equity funds is a good investment strategy in oversea investing because it boosts the success rate.
CDF is aggressively transforming itself into a well-rounded financial institution, combining life insurance, securities, banking, venture capital and private equity as growth engines. CDIB strives to become the equity investment and asset management leader in the Asia-Pacific region. Currently, assets under management cover a wide range of themes, including biotech funds, innovation acceleration funds and Asian funds, and span NT-dollar funds to US-dollar and Renminbi funds, becoming a global asset management platform. In 2018, assets under management ranked first among venture capital firms invested by local financial holding companies.
