Singapore draws international biotech VCs as Asia-Pacific life sciences sector takes off

International biotech venture capital (VC) firms are flocking to Singapore, drawn by the Asia-Pacific region’s growing life sciences sector, with one more European VC confirmed to set up operations before year-end.

This represents a significant change from a decade ago, when there were “practically zero VCs” of foreign origin in the biotech sector, noted Fabio La Mola, partner at consultancy firm Bain & Company.

Over the past two years, several global players have established operations in the city-state. US-based VC firms Polaris Partners, Flagship Pioneering, Accelerator Life Science Partners, and MPM BioImpact have all opened Singapore offices, alongside Novo Holdings, the investment arm of Danish diabetes drug manufacturer Novo Nordisk.

Aside from VC, another important part of the early-stage ecosystem is the support from incubator networks during this same period. JLabs, by American pharmaceutical giant Johnson & Johnson (J&J), and 65Lab backed by German drug discovery platform Evotec, have also set up shop here.

This has created a vibrant VC ecosystem, even as US President Donald Trump’s sweeping pharma tariffs have introduced some uncertainty to this growth momentum.

Still, La Mola estimated that more than US$250 million (S$323.79 million) has been raised and deployed in Singapore’s biotech sector so far.

As companies mature and new ones emerge, investment could grow to US$500 million within the next three to five years, he added.

Their timing is spot on as the Asia-Pacific is gaining global prominence in cutting-edge biotechnology such as mRNA treatments, cell and gene therapies, and artificial intelligence-powered drug discovery.

Increasingly, the region is being seen as an emerging global biotech hub, said a Bain report, of which La Mola was the lead author.

Singapore has emerged as a particularly attractive destination for global biotech investment, thanks to favourable intellectual property regimes, tax incentives, and regulatory reforms.
 

Strategic gateway

European and US VC firms are increasingly drawn to Singapore for its home-grown science and connections to the broader Asian market, particularly China, South Korea, and Japan, said La Mola.

“Singapore becomes a bit of a central hub for a lot of these venture capital offices,” he said.

These core attractions are what ultimately drive VC decision-making. Flagship Pioneering Asia Pacific chairman, Andre Andonian, said that the move to Singapore was a “very conscious decision” after analysing different countries across Asia.

The city-state was chosen for its world-class scientific capabilities and strategic position to access the broader Asian market. Flagship decided to tap opportunities in China “opportunistically via Singapore” rather than directly, given current geopolitical tensions in the healthcare sector.

Andonian also cited cultural alignment, noting that Singapore’s business culture mirrors Flagship’s approach with “high aspirations, long-term orientation, and future-back thinking”.

The move comes as Flagship looks to expand beyond the US after capturing strong volume in that market. “If we want to expand and have access to top talent, if our companies want to expand, we have to look outside. That’s where Asia and Singapore become a logical choice,” he said.

Sharon Chan, vice-president of JLabs Asia Pacific, said Singapore’s location acts as a bridge between East and West, giving J&J access to diverse markets while tapping the region’s innovation system to “accelerate breakthroughs across the Asia-Pacific”.

The government’s active support through funding, grants, and streamlined regulatory pathways adds to the appeal, she noted.

Elia Stupka, managing director of Italy-based Angelini Ventures, echoed this, citing Singapore’s financial talent, ease of doing business, and the government’s long-term commitment to life sciences. Angelini has invested in Singapore startups such as gene therapy company Nuevocor despite not having a local office.

Backing local biotechs

This influx of international VC is proving beneficial for Singapore’s home-grown biotech startups – foremost through funding.

For instance, Lightstone Ventures, an early pioneer that opened a Singapore office in 2016 but has since closed local operations, partnered Temasek-backed ClavystBio to lead the US$57.5 million Series D funding round for Allay Therapeutics.

Separately, Novo Holdings led the US$125 million Series C round for Hummingbird Bioscience, a Singapore biotech focused on precision biologics for cancer and autoimmune diseases.

Besides funding, VCs also bring validation and networks. JLabs’ Chan said foreign VCs view JLabs’ involvement as strong validation that a startup has been vetted through an established ecosystem and has access to world-class resources.

JLabs also acts as a bridge for startups seeking licensing or commercial partnerships with J&J’s global therapeutic divisions.

Some are even helping to create companies. Lightstone helped found MediSix Therapeutics, a cancer startup focusing on T-cell therapies, while Polaris Partners worked with ClavystBio to establish CoVBio, which has since been acquired by Dutch biotech firm Leyden Labs.

The VCs are also strengthening Singapore’s broader infrastructure. Flagship has committed up to S$100 million with the Agency for Science, Technology and Research to advance biotech and healthtech innovation across the Asia-Pacific.
 

Tariff uncertainty?

The impact of Trump’s pharma tariffs on drugmakers is evident, but the upstream implications for startups developing novel drugs are less clear.

Analysts said that the tariffs will prompt VCs to reassess strategies but are unlikely to trigger wholesale withdrawals.

This is because Singapore’s biotech sector is “purposefully oriented towards patented or innovator drugs”, said Louise Loo, head of Asia economics at Oxford Economics. “These are tailwinds that will continue to support longer-term investments into the sector, tariffs or not.”

Moody’s Analytics economist Denise Cheok noted that pharma companies operate in the region for cost advantages and resource availability. “Investments elsewhere may not replicate the same kind of comparative advantages that firms in the region possess.”

The tariffs could, however, make later-stage capital more conditional on US integration, said Tay Qi Hang, Asia analyst at the Economist Intelligence Unit. This may prompt some portfolio reweighting away from Singapore towards US-based firms at Series B or C stage.

Licensing terms are also likely to favour technologies easily transferable to US manufacturing infrastructure, such as RNA-based therapeutics, while therapies requiring Asia-centric supply chains may lose out – such as cell and gene therapies.

Still, Singapore will remain competitive for discovery-stage innovation, Tay said. Singapore startups may need to court independent VCs or sovereign investors such as Temasek and EDBI to bridge any funding gaps.
 

Source: The Business Times ©️ SPH Media Limited. Permission required for reproduction.