Taiwan's momentum as a biotech clinical trials hub in Asia remains strong, but valuations for listed biotech firms may not yet reflect a wide smart money view on eventual commercial prospects, according to Carl Firth, the CEO of ASLAN Pharmaceuticals.
In September last year, ASLAN moved to conduct a new clinical trial with its lead development molecule in Taiwan, away from its Singapore base, citing strong logistical support.
In an interview last month with FiercePharmaAsia, Firth talked about some of the promises and pitfalls as a venture capital-backed firm in Asia.
"In 2010, we decided to base the organization in Singapore, but we noted that in Taiwan the clinical capabilities are extremely strong along with Korea, Singapore, and Australia to an extent for Phase I and small Phase IIa trials. But if we look further down the chain at the larger studies, Taiwan features very prominently."
However, he said valuation for local biotech listed in Taiwan seems high. But also notes the potential for firms like Taiwan Liposome to leverage the promise of getting products more easily in heavyweight China.
"In the short term high valuations can be a bit dangerous and that's everywhere, but Taiwan's biotech industry has yet to really prove itself."
Still, Chinese drug developers, biologics manufacturers, generic firms and marketers are either listed or waiting to be listed in Taiwan.
They include in vivo assay development company Crown Bioscience, PharmEssentia, and PharmaDax, among others attracted in part by relatively easier listing rules.
Biotech accounts for 19% of the listed companies in Taiwan, according to PriceWaterhouseCoopers, compared to 7% of China's listed companies and 6% of Hong Kong's listed companies.
ASLAN also aims for an IPO in Taiwan or the United States.
But Taiwan has yet to see a locally developed novel biologic reach the market, with Taipei-based OBI Pharma among the closest for its OBI-822 immunotherapy product for metastatic breast cancer, which is in a global Phase II/III trial.
However, he said that's part of the learning curve that will change when more money comes from abroad instead of the high proposition raised regionally and in Taiwan.
"It's a course in educating investors about what 'high risk' in this sector really means," he said.
"A biotech entrepreneurial environment needs fuel and thus far--other countries in the region and the United States have been reluctant to put up the capital to commercialize academic research."
However, recent deals and moves in the investment space have highlighted potential. A Japan-based securities firm said it has established the nation's largest fund in the biotech field, seeding it with $83.6 million to support startup biotech companies at home and in Taiwan. Taiwan is a target of Daiwa Securities Group because its clinical-trials system meets the same standards as the United States, thus its test data are accepted automatically in other countries such as China.
And last month, Taiwan's ACT Genomics raised $8 million in a first private funding round.
However, Firth noted Taiwan's regulators, investigators, and clinical research organizations (CROs) are now at the top of the regional chain.
"Taiwan not only produces high quality data, but its regulators support the process. That's important for Aslan because innovation is what we do. As a company, we try to come up with more creative ways to bring drugs to the market."
Last year, ASLAN secured $22 million in Series B financing led by Shanghai-based Cenova Ventures, which joined Morningside Group and XinChen Ventures with BioVeda Capital and Sagamore Bioventures, to fund ongoing clinical development of ASLAN's portfolio.
Jun Wu, chairman and managing partner at Cenova Ventures, has made a reputation for the management of risk in the region that underlies the investment.
ASLAN has four molecules in development, ASLAN001, a pan-HER inhibitor, licensed from Array Biopharma, which is entering Phase IIb trials for solid tumors.
ASLAN002, a cMET inhibitor, licensed from Bristol Myers Squibb ($BMY), which is entering Phase II trials for solid tumors.
ASLAN003 is a DHODH inhibitor, licensed from Almirall, is currently in Phase I trials for rheumatoid arthritis, and ASLAN004 is a fully human monoclonal antibody against interleukin-13 receptor α1 that has been shown to block binding and signal transduction of both IL4 and IL13 and licensed from CSL (CSL334). It is in preclinical development.
The company uses its own financial resources and high-quality CRO facilities to perform preclinical, Phase I and II studies on the partnered compounds with a focus on Asia.
- here's the company's website