UPDATE : Monday, July 13, 2020
Venture capital investment in biomedical sector to hit record this year
  • By Jeong Sae-im
  • Published 2019.12.17 14:20
  • Updated 2019.12.17 14:20
  • comments 0

Despite disappointing clinical trial failures by major biotech firms, venture capital investment in the biotech and medical sector is likely to hit a record high this year, industry data showed.

Compared to a year earlier, this year’s gain may have slowed, but venture capital investment in the biotech industry is expected to surpass 1 trillion won ($858.7 million) in 2019 owing to various attempts for open innovation, observers said.

According to a report by the Biotech Policy Research Center and the Korean Venture Capital Association, venture capital’s new investment in the biotech and medical sector recorded 984.1 billion won in the January-October period, a rise from 841.7 billion won in the same period of last year. If the trend continues, the annual volume is expected to exceed 1 trillion won this year.

Like last year, the biomedical sector is expected to have attracted venture capital investment the most this year. During the first 10 months, 27.9 percent of new investment by venture capital went to the biotech/medical sector. It was followed by 22.2 percent to retail/service, 8.6 percent to media/performance/records, 4.5 percent to electronics/machinery/equipment, and 3 percent to ICT manufacturing.

Monthly venture capital investment peaked during the May-August period, with each month recording more than 100 billion won in investment. The monthly investment was weak, with 21.1 billion won in January and 64.5 billion won in February, but climbed to 153.3 billion won in May, 114.5 billion won in June, 169.4 billion won in July, and 151.4 billion won in August. Then, the figure plunged to 48.7 billion won in September but went back up to 91.3 billion won in October.

Major biotech companies such as Kolon Life Science, SillaJen, and Helixmith reported disappointing news. Kolon Life Science faced the revocation of its osteoarthritis drug Invossa-K. SillaJen and Helixmith failed to present positive results of their global phase-3 trials, which led their stock prices to nosedive. None of these was unable to cool investment fervor in the biotech sector, however.

The increase in the investment this year will be smaller than that of last year, though. Venture capital investment in the biotech sector more than doubled in 2018.

The investment in the first 10 months this year was a 40.3 percent increase, which falls short of the last year’s growth pace. Despite the slower growth this year, venture capital investment in the biomedical industry grew more than nine folds in seven years, compared to 105.2 billion won in 2012.

Kim Ji-hyun, a research fellow at the Bio-Economy Research Center, attributed the expansion of investment this year to “various types of open innovation.”

“If we call last year ‘a year of venture capital investment,’ we can call this year ‘a year of innovation in corporate deals,’” Kim said. “New types of corporate deals such as sizable licensing deals, a large pharmaceutical’s innovation in outsourcing, a multinational firm’s active R&D, or large mergers significantly boosted the size of the investment in the biomedical sector.”


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