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Listing amendment for life sciences IPOs part of bigger aspiration

The Edge Singapore
The Edge Singapore • 4 min read
Listing amendment for life sciences IPOs part of bigger aspiration
A file photo of Biopolis, centre of Singapore's life sciences activity / Photo: The Edge Singapore
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Three months ago, Nasdaq-listed CTI Biopharma was bought by Sobi of Sweden in an all-cash deal for US$1.7 billion ($2.3 billion). Obviously an unfamiliar name to most investors here, Seattle-based CTI has just one product approved for sale: Vonjo, which treats an uncommon form of bonemarrow cancer.

The deal has not gone unnoticed by Dr Foo Fatt Kah of Luminor Capital, who for years has been an active player in the local bioscience sector. In his June 19 opinion piece, “This medical breakthrough has its origins in Singapore”, published by The Edge Singapore, Foo describes how some of the early research output that ended up in Vonjo was from S*Bio, Singapore’s firstever bioscience company, a joint venture formed in 2000 between the Economic Development Board (EDB) and US pharmaceutical company Chiron Corp.

Evidently, the road from R&D to trials to commercialisation took quite a while longer. Numerous other investors helped chip in along the way, but the intellectual property was eventually sold to CTI in 2012 and approval for sale was only given last year. Besides receiving an upfront payment, S*Bio would continue to receive certain future royalties on worldwide sales of Vonjo.

“Amidst all the jubilant merry-making at CTI, we should not forget to celebrate Singapore’s notable involvement and the early actions taken by S*Bio’s management and board — all of which have played a pivotal role in this success story,” wrote Foo.

Unfortunately, most market observers will struggle to recall how many other local bioscience ventures can be considered successful, however modest. If not for individuals like Foo who were there, and who bothered to remind everyone else what happened, such success stories would slip under the radar.

Not for the faint-hearted

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Hitting jackpot by betting on bioscience companies is not for the faint-hearted and the impatient. That has not stopped many from trying, with founders typically researchers motivated enough to turn a problem statement first into years of slogging in the labs, followed by a testing period of trials and clearing regulatory hoops.

And of course, funding — rounds of funding — is always key. With external investors onboard, an IPO to raise even more capital is the next milestone to hit, and hopefully it remains interesting and relevant for a while longer before attracting the Big Pharmas to make an offer.

More than any other industry, bioscience companies typically got to bear with years of no meaningful revenue while coping with mounting expenses. Yet, the payoffs — if they materialise at all — will be the stuff of multi-bagger dreams.

See also: S’pore growth ‘should strengthen this year’: MAS

Exchanges such as Singapore Exchange (SGX) have recognised this peculiar vulnerability of bioscience firms and already put in place specific leeways for them to list, instead of forcing on them conventional requirements such as market cap, profitability and other operational metrics.

On Aug 10, SGX RegCo revised its listing rules to make it explicitly clear that IPO aspirants that are in life sciences — a more encompassing description — can apply to list if they can have a market value of at least $300 million.

The revision came about only after an ongoing IPO applicant sought a waiver of the operating revenue requirement — the first time such a request on this was made. The existing framework allows for listing applications under alternative rules, but they were not made explicitly clear. With the blessings of the exchange’s listings advisory committee, it is now clear.

Investors may recall how with the cheerleading of Philip Yeo, the outspoken chairman of first EDB and then A*Star (the Agency for Science, Technology and Research) between 2000 and 2007, Singapore’s biosciences sector was rapidly built, so as to create another pillar for the economy. A truly homegrown “blockbuster” drug has eluded Singapore thus far — S*Bio’s Vonjo, as described by Foo, is but a nice consolation prize.

As the story by Jovi Ho, “Biomedical, life science sectors in focus as Biopolis turns 20”, on the following page describes, there is always a healthy level of activities here involving life sciences and biotech companies.

After more than two decades, this is no longer a niche industry but one that a well-informed populace is familiar with. Developers the likes of CapitaLand are involved in ways beyond just offering nicely deck-out spaces to house the labs. Various funding taps are available, and expertise bridging the labs and boardrooms is available as well. Let’s all try and make this work.

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