What a biotech firm’s demise says about the industry

IF YOU’VE been following us for long enough, you’d know there’s a typical playbook for startups.

It goes something like this: Define a problem. Solve it with a new product. Build a great team. Quickly expand the product to several markets. And, perhaps most crucially, iterate as you go along.

However, that doesn’t happen often in biotech. In most cases, a product doesn’t even make it to the market. Before Moderna became a money-spinner worth US$196 billion in 2021, it was a startup that guzzled venture capital and big pharma money for years to survive.

Biotech investing is risky because millions of dollars are invested over more than a decade in research and development – and you may never see a return.

So when high-flying startup Tessa Therapeutics bit the dust last week, it sent a ripple of disappointment across the ecosystem. Tessa was meant to be Singapore’s shot at a biotech unicorn.

Investors, including Temasek and Polaris Partners, piled at least US$398 million into the company’s cell therapies for cancer. But word on the street is that Tessa has a rocky history and has been on the ropes for a while.

Its demise has sparked reflection about the industry’s future. Tessa’s desperate search for a funder or buyer took it all around the world, from the US to the Middle East, according to a shareholder letter seen by Garage.

Still, no one wanted to bite. With economic conditions turning sour, investors were only willing to put money behind more mature results, the company said.

More biotech companies might fold in the coming months. Earlier this year, Singapore-based Ligature Therapeutics, which was designing small molecule drugs for intractable diseases, went into liquidation as well.

But Singapore is keeping the biotech dream alive. Cell therapy company Biosyngen opened its new manufacturing facility here last week and plans to hire about 200 people. Immunotherapy firm Lion TCR raised US$40 million primarily from Chinese investors.

Another dream that’s being kept alive: alternative protein in Asia. Regional development of the technology lags behind the Western world, but players based in South-east Asia are keen on conquering the multibillion-dollar market even as investors back away from a fizzling hype.

Companies from around the world are eyeing Singapore as a base, too. German startup Bluu Seafood is looking to launch its cultivated seafood products in the city-state by 2024.

That’s all from us this week. Look below for other stories, including Sharanya’s coverage of an AI conference in San Francisco!

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