Singapore biotech startups chase the American dream
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: Singapore biotech startups chase the American dream

Singapore biotech startups chase the American dream

SINGAPORE biotech startups are looking to the US as their next market for expansion, tapping the large population size and market opportunities to match.

Home-grown company Lucence, for one, has recently secured Medicare reimbursement approval. The biotech startup's blood test to detect lung cancer was approved by one of the world's largest health insurance providers, opening the door for other insurance providers to follow suit.

"What we are looking at here in terms of blood tests... is already a US$10 billion market here in the US," said Tan Min-Han, founder and chief executive officer of Lucence.

Being in the United States allows Singapore's biotech startups to tap the country's sizeable pharmaceutical market, where drug spending is expected to hit more than US$600 billion in 2023. This makes the US the biggest pharmaceutical market in the world, with global spending estimated at US$1.5 trillion this year.

All pharmaceutical giants have a presence in the US, including European conglomerates Roche and Bayer -- which have significant footholds. For biotech startups such as Engine Biosciences, this means all the potential customers are gathered in a single place.

Jeffrey Lu, the company's co-founder and chief executive officer, said: "Being at the centre of the biopharmaceutical community means that there is a significant amount of deal activity that could benefit a biotech (company) like ourselves."

Engine uses machine learning to test novel drugs and analyse their impact on patients. It focuses on Parp inhibitors, a type of targeted cancer drug. Sales of Parp inhibitors globally amount to about US$5 billion a year; the US market makes up nearly half that amount.

Although the US is a larger market, Lu said he chose to start Engine in Singapore as he wanted the startup's vision to be international rather than US-focused: "We felt like we needed to build the company in a different way than most companies were built in the past."

Over at Lucence, Singapore provided a test bed to validate and optimise the startup's cancer-detecting blood test. Dr Tan noted that the local clinical community provided important validation for Lucence's work.

These two startups are tapping Enterprise Singapore (EnterpriseSG) for help to expand in the US.

The government agency set up the Global Innovation Alliance (GIA) acceleration programme in San Francisco in 2019, specifically to help Singapore small and medium-sized enterprises (SMEs) and startups capture US opportunities. More than 60 Singapore tech SMEs and startups have participated in the programme to date.

Clarence Hoe, global markets director for the Americas and Western Europe at EnterpriseSG, said: "We have seen, in the last few years since Covid-19, that more and more companies are starting to engage. We think they are starting to understand; and more importantly, there are competitive Singapore companies that will find US growth opportunities exciting."

But breaking into the US market is not easy. Lucence, for instance, entered the US amid the pandemic and faced delays in setting up its lab as supplies were prioritised for Covid testing labs.

Beyond operational challenges, the startup had to understand and manoeuvre within the complicated US healthcare system. That entailed figuring out not just how the system works, but also how various parties interact with one another -- from healthcare institutions to insurance providers and the patients themselves.

Of course, the company also needed to learn about the US' healthcare market, the dynamics of which are wildly different from those in Singapore and Asia.

"Nine out of 10 cancer patients in the US are cared for in the community. In Singapore, which is very urban and concentrated, the majority of the patients are cared for in large public hospitals," said Dr Tan.

The increased geographical spread in the US also poses its difficulties.

Obtaining a tissue sample, for instance, can take more time and be more logistically challenging, especially as patients need to be admitted to a hospital and go under the knife.

That's what makes Lucence's detection method suited for a market such as the US. With the startup's blood test, patients can get blood drawn at a private medical practice, or even at home.

Lucence is not the only company working on cancer detection via blood tests in the country, though. According to Dr Tan, there are three others.

He is hoping Lucence will stand out because it uses both DNA (deoxyribonucleic acid) and RNA (ribonucleic acid) in its test.

Engine's Lu noted that the attractiveness of the US as a biotech market belies its highly competitive landscape in the segment. Having a clear corporate strategy from the get-go can support startups entering the country, he said.

"So, really understanding what's going to be the differentiation, the execution plan, how to build it, how to build out a team, how to plan operations that are sensible, (and) how to make sure you're building a culture that can operate all across the international presence" are "fundamentally integral", he added.

One issue Engine faced early on was the time and effort required to build a network and brand in the US, to facilitate its entry into the market. But doing so has allowed the biotech startup to gain access to patient data in the country and the chance to run that data through its models.

"Downstream of that, it is also important that as we plan our clinical trials, we need to be in close contact with clinical investigators, the doctors designing and implementing the trials. Ideally, the proximity does matter in terms of building those relationships and institutional know-how; it's hard to do that when you're far away," Lu said.

With the growing number of forays into the US, biotech startups may well become attractive targets for bourses to welcome on their boards.

Lucence is said to be eyeing an initial public offering in the US. But it has been coy about listing in general, and so has Engine.

Lu and Dr Tan said going public is not an option right now, with uncertain market environments posing difficult conditions for new listings.

"When the time comes, we certainly want to be evaluating all attractive listing venues," said Lu.

Source: The Business Times © Singapore Press Holdings Limited. Reproduced with permission.