GIC backs Esco Lifesciences in oversubscribed US$200m Series A round

SINGAPORE-BASED Esco Lifesciences, which supplies life sciences tools for the healthcare industry, has raised US$200 million in an oversubscribed Series A round, as it seeks to expedite expansion in China, and hunt down acquisitions worldwide.

The company is preparing to go public in Hong Kong in the coming months, according to a person familiar with the matter, after its latest round valued it at over US$800 million following the fundraising.

The fundraising, also billed as its crossover round, was led by US-based healthcare investment firm Vivo Capital and Denmark-based life science investor Novo Holdings, the venture arm of Novo Nordisk Foundation.

Singapore's GIC also participated in the round, according to people familiar with the matter. Other investors include sovereign wealth fund China Investment Corporation, Singapore's EDBI and K3 Ventures.

The round is said to be the largest private fundraising round by an Asia-based life sciences tools company.

The company sells technology, products as well as services to companies in the life sciences and healthcare industries across the globe. These help to support academic research, scientific discoveries, clinical practice, biopharmaceutical research and development as well as manufacturing.

Mr Lin told The Business Times (BT) that the firm's revenue sources come from across the globe, roughly evenly split between the US, Europe and Asia. Currently, China is its single largest and fastest-growing market.

"The life sciences tools and services industry is still fairly fragmented," he said. "We have an existing global network to leverage, and Singapore is a unique window of the world from which we can bridge technologies, products and talent globally."

Fresh funds will be mainly used to bankroll its expansion in China as well as acquisitions in companies in the same industry, said Mr Lin.

He added that the company is looking to acquire western technologies and bring them to the Asian market. "We've also seen some Chinese companies that are really world class, but lack global market access. That's where we can come in, to take these technologies across the world," he told BT.

The money will also enable the creation of an innovation hub in Boston, which will focus on developing cell and gene therapy tools and technologies.

"We will increase our R&D and in-licensing efforts to develop and commercialise life science research tools in emerging domains," Mr Lin added.

Chu Swee Yeok, chief executive officer and president of EDBI, said that the company is a "local champion". "(Esco) is quickly becoming a global leader of innovative technologies, tools and equipment in the life sciences and pharmaceutical industries.

"Our support will enable it to further strengthen its manufacturing and supply chain capabilities, allowing it to capture new opportunities in the biologics and alternative proteins sectors, and become a formidable player on the international stage."

Shan Fu, managing partner and chief executive of Greater China for Vivo Capital, said that investors will help Esco Lifesciences to "accelerate its next phase of global growth" by leveraging healthcare sector resources. They will also "support the company's business development efforts and increasing investments in R&D and technology development".

Mr Fu will join Esco Lifesciences' board of directors.

Kasim Kutay, CEO of Novo Holdings, noted that the opportunities for growth and expansion at Esco are "significant". "We look forward to bringing to bear our patient capital and life science expertise to the realisation of the company's strategy."

Esco has come far. The company, led by second-generation owners Mr Lin and his brother Lin Xiang Liang, started as a clean room technology company in 1978.

The two brothers led its transition into the life sciences sector, following the nation's shift towards the more knowledge-intensive industries. Mr Lin Xiang Qian, who graduated from the Wharton School of the University of Pennsylvania, then journeyed through the US alone to learn about biological safety cabinets and other life science equipment or tools that he thought Esco could manufacture.

"That was the start of Esco 2.0, when we wanted to develop our own brand and technology in equipment manufacturing, to expand globally.

"As a Singapore-born company, there wasn't much of a domestic market. From the beginning, we had to go global. We also set up shop in the US to build up capabilities in manufacturing life science equipment such as cell culture incubators and biosafety cabinets. We were then the first in Asia to do that, and continued to develop our expertise in that way."

Offices were then set up in India, the United Kingdom, China, Canada, Mexico, Europe, the Middle East and South Africa. This was followed by a global marketing programme to establish its presence as a global life sciences tool company.

As the company grew its business beyond these shores, it then ventured into manufacturing medical devices used in the IVF process, through investing in a European fertility startup called AT medical. Esco also obtained commercialisation rights, distribution rights and brand rights. "Within a few years, we had offers from some global multinationals to acquire that business, but we decided to take a controlling stake. From there, we acquired the business.

"Now, this is forming the cornerstone of Esco's medical business unit for fertility technologies."

Meanwhile, it continued to develop its technologies.The Esco Lifesciences group now has four main units: Esco Scientific, which provides life science tools; Esco Medical, focusing on IVF medical technologies; Esco Healthcare, for biopharma manufacturing tools; and Esco Aster, the CDMO-manufacturing arm for cell and gene therapies.

It is now time for the next phase of growth, or Esco 3.0, said Mr Lin. "We are pleased to be supported by this truly global syndicate of life sciences investors. We also have plans to invest further in Singapore, to continue to support the development of the local biotech ecosystem and leverage Singapore's world-class capabilities in commercial scale biopharma manufacturing."