Cedrus Investments Report (en)

Cedrus Investments Report (english) – http://www.cedrusinvestments.com/industry_reports.html

Diversified Capital Enters Into China Market Where is the “tailwind” for China’s biotechnology industry?

SHANGHAI, 15 January (Xinhua) – Genome sequencing, protein-structure analysis, and large-scale cell culture……With China’s growing leadership in global biotechnology industry, biotechnology is regarded as an emerging industry in China’s 13^th “Five-year Plan”, attracting both domestic and global investors to rush into this “tornado”. Where is the “tailwind” for biotechnology industry with a market size of 10 trillion yuan? Rani Jarkas, Chairman of Cedrus Investments, a well-known global boutique investment firm in biotechnology industry, accepted the interview with the reporters from Xinhua.

Gap between basic research and clinical application

Xinhua: As one of the foreign investors, what do you think about the development of biotechnology industry in China?

Rani Jarkas: China’s potential to influence and eventually take a leadership role in the global biotechnology market became apparent. Recently, China has begun investing vast sums of money into the domestic biotechnology industry, including the development of translational sciences centers, to draw top talent from around the world and apply findings from fundamental research into medical and nursing practice with beneficial health outcomes.

Although China has made tremendous progress in fields like genome sequencing and protein-structure analysis, it has produced relatively few drugs and other medical products. Hence, the Chinese government is keen to bridge the gap between basic research and clinical application, and the construction of translational sciences centers, for instance, is part of the effort to push domestic innovations in terms of developing medical treatments. Given the momentum underway, the sheer scale of the effort expended and its immense market size, China will ultimately be able to make a significant impact on the biotechnology industry globally.

The high-risk and high-cost nature of biotechnology industry requires entrepreneurship and patience from the participants

Xinhua: What lessons can China learn from the development of biotechnology in the West?

Rani Jarkas: The biotechnology industry was founded in the U.S. in the 1970s, and the U.S. has always been the global leader in research and development (R&D) spending in this field and currently has the largest biotechnology market of the world. In the West, the biotechnology industry could best be described as a venture involving trial and error, high risk, entrepreneurship, high costs, patience, and likely failure.

The following lessons have been learned by those entrepreneurs and investors participating in the biotechnology industry in the West over decades: First, participants must either know what they are doing, or be aligned with those who do in order to be successful. Second, biotechnology is unlike other sectors that can benefit from broader industry trends. In biotechnology, a company succeeds or fails on its own merits. Third, very few investors possess the relevant expertise to adequately evaluate the unknowns and manage the risk inherent in biotechnology investing. Therefore, having a broad network of knowledgeable industry participants, including regulators, clinical professionals, executives of companies and experienced investors, is critical for market intelligence before making investment decisions.

The dramatic growth in the number of cross-border deals in China’s biotechnology industry may help China eventually take a leadership role in the global biotechnology market

Xinhua：What will be the opportunities for China’s biotechnology industry?

Rani Jarkas: A very interesting and unique aspect of China’s biotechnology industry is the dramatic growth in the number of cross-border deals completed in recent years. Domestic and Western venture capital firms have contributed notable funding to China’s life sciences start-ups. For example, the country’s top-10 market players are mainly multinational or their joint ventures with foreign companies. For many years, collaboration between multinational pharmaceutical companies and their Chinese peers (including private Chinese companies) has been critical in generating mutual benefits together with driving the industry growing at a faster pace, and most industry experts believe this will continue.

China has been tremendously influenced by how the U.S. has wisely funded R&D innovations in the past, according to The National Bureau of Asian Research. During the process of global collaboration and cross-fertilization, on one hand, the flow of Chinese scientists returning to China provides the talent and know-how  as well as the expertise to facilitating cross-border licensing and acquisitions, among others and positions China’s domestic biotechnology industry to compete internationally as well in the future. On the other hand, given that the biotechnology industry’s profiles have similarities in many dimensions, including regulatory, financing, liquidity, execution, reimbursement and safety, China’s approach, is both efficient and effective and has the potential of developing the global biotechnology industry further and faster.

Cedrus’ team has been involved in the investment banking business of the life sciences industry for over 15 years. Cedrus Investments is a trusted partner and advisor in promoting the flow of cross-border innovations, business and capital in the life sciences industry between China and the U.S., Europe and Australia. Cedrus currently advises and manages over US$1.5 billion in assets in multiple funds, including one solely on life sciences. In 2016, Cedrus will host an exclusive life sciences investor conference in Shanghai.

News Background:

Cedrus Investments, a global boutique investment firm, is at the forefront of serving as a trusted partner and advisor in promoting the flow of cross-border innovations, business and capital in the life sciences industry between China and the U.S., Europe and Australia. Cedrus has a local presence, with offices in Beijing, Hong Kong, Shanghai, Jakarta and the Cayman Islands and a team of multi-disciplinary experts. The company has been doing business in the Greater China region for over a decade.  The firm has the advantage of understanding both the Western and Eastern cultures and interests, and it knows how to build trust to cement win-win partnerships and facilitate deal executions.

Cedrus’ team has been involved in the investment banking business of the life sciences industry for over 15 years, primarily in the U.S. and Europe. Moreover, it has unparalleled relationships within the venture capital community, with global institutional investors, life sciences companies and academic experts from leading institutions in the U.S. and Europe, such as MD Anderson in Texas, the leading cancer research center in the world.  Its team of advisors and investment bankers is comprised of graduates from Harvard and Stanford Universities, all of whom are actively participating in sourcing and evaluating unique investment opportunities. Cedrus currently advises and manages over US$1.5 billion in assets in multiple funds, including one solely on life sciences.

Cedrus’ life sciences team is focused on: a) advising Chinese companies on a variety of cross-border transactions, including accessing technology and business partners in the West and Australia that are of interest to them; b) working closely with domestic investors to identify promising life sciences investment opportunities locally and abroad, and c) bringing life sciences companies from the West and Australia with technologies and products that would be valuable in addressing crucial healthcare issues in China to meet with relevant Chinese companies and investors. In the end, it is Cedrus’ primary objective to become a trustworthy business partner and advisor to Chinese companies and investors alike looking to conduct productive and valuable cross-border business.

In 2016, Cedrus will host an exclusive life sciences investor conference in Shanghai that will focus on bringing leaders in the biotechnology industry from the U.S., Europe, and Australia, to Shanghai to meet with their Chinese counterparts from various parts of China to explore partnership, merger and acquisition, and financing opportunities. By hosting this conference annually, Cedrus is committing to bringing together the right mix of international players from a variety of disciplines to help Chinese companies and local investment managers achieve their goals and lend momentum to Shanghai becoming one of the world’s most important biotechnology centers.