GIC makes another bet on Chinese pharma

Singapore’s state fund leads $85 million funding for Harbour BioMed, marking its third investment in the Chinese pharmaceutical space in four months.

Singapore’s sovereign wealth fund GIC Private has led an $85 million financing round for Chinese pharmaceutical startup Harbour BioMed, extending its long streak of private equity investment in China so far this year.

GIC Private was joined by China Life Private Equity Investment and Vertex Ventures in the series B round of financing, the young pharmaceutical startup said in a statement on Monday.

Taiwanese technology company AdvanTech and Legend Capital, the venture capital arm of Chinese conglomerate Legend Holdings, also invested in the current round. They invested $50 million in the company’s series A funding round when it was founded in December 2016.  

Harbour BioMed was founded by Jingsong Wang, former head of China research and development center at French pharmaceutical giant Sanofi. The company specialises in discovering and developing innovative therapeutics for oncology and immunological diseases.

As it stands, Harbour BioMed is one of the few Chinese research-based pharmaceutical companies that is able to draw foreign investment, a signal foreign investors are increasingly confident about Chinese firms’ pharmaceutical R&D and manufacturing capabilities.

Research-based pharmaceutical companies often found it hard to raise capital because its long R&D cycles, large investment and high failure rate turn off many prospective investors.

In addition, early-stage investors generally tend to prefer putting their money into Europe, Japan and the US, where there is a track record of proven R&D successes.

“The financing is a very strong vote of confidence by our new and existing investors in our vision for the company, strategy, progress to date and our team,” Harbour BioMed’s Wang said in the statement. “With their continued support, we will accelerate the growth and advancement of our pipeline through both internal innovation and external collaboration.”

For GIC, the Harbour BioMed deal marks its third investment in the Chinese pharmaceutical industry over the past four months.

In May the sovereign fund led a $260 million series B financing by CStone, a Chinese startup with close similarities to Harbour BioMed, which also focuses on oncology and immunology. That was two months before it invested $75 million as a cornerstone investor in the Hong Kong initial public offering of Chinese biological drug maker Ascletis Pharma last month.

GIC’s investment in China is not confined to the pharmaceutical sector. The sovereign fund participated in Ant Financial’s $10 billion fundrasing in June and Luckin Coffee’s $200 million funding round in July. It has also invested in customer relationship management solution provider Weimob, credit rating agency Lianhe Ratings and second-hand-car trading app Chehaoduo, among others.

The Singapore sovereign fund is clearly making more deals in China this year compared to last year, when it closed only three investments: into Meituan-Dianping, electric car play Nio and peer-to-peer lender Dianrong.

Lim Chow Kiat, GIC’s chief executive officer, said earlier this year the sovereign fund sees tremendous growth opportunities in China despite its cautious outlook on the global economy.

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