Life Sciences and Biotech Investment Trends in the Post-COVID-19 World

COVID-19 is continuing to spread, with 186 million confirmed cases and more than four million deaths around the world, according to WHO statistics by 13 July 2021. Although more than 3.1 billion doses of vaccine have been administrated globally, the mutation of the virus and diverse prevention measures among different countries result in a rising number of cases. It is still too early to predict when the pandemic will end.

At the frontier of the fight against the pandemic, biomedical sciences and healthcare sectors are playing an important role in combating the coronavirus. Funds flowing into healthcare industries have increased significantly during the pandemic. We believe that with the joint efforts of governments, healthcare organizations and individuals around the world, the pandemic will eventually be brought under control. What will be the changes and new trends in investing the healthcare sector after the pandemic era in Hong Kong and the World?

Drivers for future development of the healthcare industry

Before the pandemic, the driving factors for the development of healthcare industry included: 

1) increasing healthcare needs driven by the ever-growing global population, accelerated aging of major developed and some developing countries, and the rising prevalence of chronic diseases; 

2) the continuous advances of life sciences and biotechnology, emerging innovation of clinical technology, coupled with improved healthcare awareness among healthcare / biomedical sciences professionals and patients, which would further help the expansion of this sector.

After the hit of the COVID-19, new changes have been noticed. First of all, COVID-19 pandemic has been a big catalyst in the rapid adoption of digital health tools by healthcare service systems all over the world. Secondly, some sub-segments benefited from the pandemic, for example, in vitro diagnostics (IVD) industry boomed. The vaccine R&D and public health have seen a particular surge in interest. Additionally, the pandemic also enhanced public health awareness and valued dietary supplements.

Rising investment in healthcare

According to a report by CB Insights earlier this year, with the impact of the pandemic, global healthcare funding reached a new high in 2020, which was a total of $80.6 billion equity funding across more than 5,500 deals.

Data source: CB Insights

Another report from ChinaBio showed that China’s venture capital (VC) or private equity (PE) funds raised $56.1 billion in 2020 targeting healthcare industry, also hit a record high. 

Data source: ChinaBio

Another report from ChinaBio showed that China’s venture capital (VC) or private equity (PE) funds raised $56.1 billion in 2020 targeting healthcare industry, also hit a record high. 

Data source: ChinaBio

There was an impressive record of China healthcare IPOs in 2020. Around 80 IPOs in the healthcare sector completed in 2020, grew by 77% comparing to 2019. These companies are listed on China A-shares, Hong Kong Stock Exchanges and Nasdaq.

The pandemic is a catalyst for investment in life science, biotechnology and healthcare sectors, as the pandemic has exposed pain points in the industry, including the shortage of effective tele-medicine and the insufficiency of preventive medicine products.

Trending healthcare topics in the post-COVID era

According to the CB Insights report, digital health has gained significant funding due to the impact of COVID. The global fund injected into digital health has increased by 45%. The equity investment in digital health has reached a record high of $26.5 billion, which is one-third of all healthcare investment. In addition, investment is also concentrated in the fields of gene editing, artificial intelligence, cell therapy, and vaccines.

In the post-COVID era, healthcare industry is full of opportunities. StartUs Insights studied 1,745 start-ups in the healthcare/pharma sectors around the world, and identified the top ten trends in this field after 2021. These will bring more solutions for health management, and disease prevention and treatment. They may become the next hotspots of future investment. 

Data source：StartUs Insights

Top 10 Pharma Industry Trends

1. Artificial Intelligence (AI)

AI and machine learning are accelerating drug R&D. They are also being applied in the automation and process optimization of medical product manufacture, as well as the design for more effective marketing and post-marketing management strategies. For example, Pangaea Data uses AI algorithms to analyze medical records and clinical trial documents to help clinical trials identify suitable patients; InVivo AI is trying to use innovative AI algorithms to identify drug molecules structure to accelerate and optimize drug discovery process.

2. Big Data & Analytics

Massive medical data can be fully utilized in the era of big data. Pharma companies use big data to analyze the trend of unmet needs from the public to accurately allocate R&D resources. They also pinpoint adverse reactions related to a certain drug from the usage data of millions of patients, and obtain convincing predictions of side effects. Pharma companies can also optimize their logistics information platform to deliver new medicines to the market efficiently.

3. Flexible Production

Flexible production is an innovative manufacture model comparing to traditional industrialized mass production. It has flexible response capability, that is, small batch production capability. Its agile and precise response would well adapt to the ever-changing and personalized needs of consumers. In healthcare, new requirements on the manufacturing process arise in face of emerging personalized treatment needs. While customizing treatment products, the intelligent and digital flexible production lines will meet the needs of personalized treatments, and also improve manufacture efficiency and reduce energy consumption.

4. Precision Medicine

It is a well-known concept to customize prevention and treatment measures compatible with each patient's individual health status and disease conditions. For example, ExactCure simulates the pharmacokinetics of drugs in individual patients to predict the efficacy and drug interactions in different patients. Tepthera is committed to developing individualized therapeutic vaccines for cancer treatment.

5. Additive Manufacturing (3D Printing)

Additive manufacturing is applying 3D printing technology to healthcare industry, such as printing tissues or cells. 3D printing technology has great potential in drug development, organ engineering, and regenerative medicine. FabRx uses 3D printing technology to produce personalized prescriptions, such as sustained release tablets, or multidrug combination pills. Frontier Bio is developing 3D printed human tissues, which can be used to reconstruct blood vessels or nerve tissues.

6. Blockchain

Blockchain technology has extensive applications in the biomedical industry. Blockchain can be used in fields such as medical information security and privacy protection, and drug traceability. For example, PharmaTrace applies blockchain technology to strengthen the security of the information transaction process of pharmaceutical companies relying on the traceability and non-tampering features of blockchain technology; Veratrak provides blockchain solutions in data storage, protection, and workflow management in pharmaceutic supply chain.

7. Extended Reality (XR)

Extended reality is a mix of new technical concepts. X represents the extension (X) and also the unknown variables (X). It combines concepts of virtual reality (VR), augmented reality (AR), and mixed reality (MR). It integrates the virtual world and the real world, and has different presentations and applications in different industries. Nanome offers VR technology to display atoms, molecules and proteins to help researchers design druggable proteins and simulate 3D structures. Goodly Innovations has designed an AR system to assist in quality control and monitoring processes of pharma manufacture.

8. Real-world Data

Pharma real-world data includes patient health data, treatment data, and medical record, etc. The latest development in this field is related to the Internet of Things (IoT), which is extensive, convenient, and real-time collection of patient data via sensors and wearable devices. It can support drug development and generate real-world data feedback.

9. Digital Therapeutics

Digital therapeutics is also a new type of therapy, which generally refers to software products that have been proven by clinical trials to effectively prevent, manage, and treat certain medical disorders and diseases. Digital therapeutics has a significant value in treating behavior-mediated conditions that cannot be well solved with existing drug treatments (such as depression, post-traumatic stress disorder, smoking cessation, and insomnia). FDA approved Pear Therapeutics' reSET in September 2017, making it the first prescription digital therapy whileChina also approved its first digital therapy phone application in 2020, with integrated functions for cardiopulmonary, musculoskeletal and nutrition management, and combined services of wearable devices and pre-packed medical food.

10. Curative Therapies

This new type of therapy mainly refers to cell therapy and gene therapy that aims at curing and managing chronic diseases. For example, gene therapy can be used to repair gene deficiency to fundamentally cure a genetic disease. The technologies involved in gene therapy include adeno-associated virus (AAV) vector delivery technology, CRISPR gene editing technology, single/double base editing technology, and oncolytic virus gene modification technology.