THE local biotechnology industry received a boost yesterday with the launch of a RM114mil venture capital fund by Spring Hill Bioventures Sdn Bhd.
The fund will enable Malaysian institutions to gain experience in biotechnology and will contribute towards the establishment of the industry in Malaysia, said Dr Kim Tan, who owns Spring Hill Management Sdn Bhd (SMSB), the fund's manager.
The fund will also invest in start-ups and under-valued, quoted biotech companies in the European Union and the United States.
We will have a balanced portfolio with a bias towards biotech manufacturers and late-stage companies, Tan said, adding that a minimum 40% of the fund will be invested in Malaysia.
In a sense, it is different (from other venture capital funds) in that it will involve investing in existing Malaysian biotech companies as well as initiating its own start-ups (through joint ventures with foreign companies), said Tan, a prominent scientist and biotechnology entrepreneur.
We hope the fund will act as a lead investor and catalyst, and encourage others to join in, he added.
To reduce the technological risks of start-ups, Tan said, the strategy would be joint ventures and in-licensing of technology.
Joint ventures will also be the channel to bring in experienced management. In addition, we intend to invest in near-market projects and building the necessary biotech infrastructure for the industry.
Potential investments for the fund, which focuses purely on life sciences, include a human insulin plant, monoclonal antibody/biologies plant, pre-clinical CRO (clinical research organisation), and head and neck cancer projects in Malaysia; a boron radiotherapy company in Britain, a cell therapy company in the US, and cancer vaccine companies in the US and Britain.
(Boron technology amplifies the effects of radiotherapy many times over.)
Khazanah Nasional Bhd managing director Tan Sri Mohd Sheriff Mohd Kassim said: It is our hope that the fund would help encourage our local scientific community to actively participate in biotechnology related ventures and to spur the development of the BioValley in Malaysia.
Khazanah is a shareholder of the fund together with Great Eastern Life Assurance (M) Bhd, PacificMas Group and Vertex Avenue Sdn Bhd, a wholly-owned subsidiary of TH Group Bhd.
BioValley is a designated area within the Multimedia Super Corridor dedicated to the development of the biotechnology industry in Malaysia. Due for completion in 2005, it will comprise biotechnology research institutions, universities and specialised companies.