Taiwan's biotech firms gather interest, but analyst advises caution

Listed companies

Taiwan's biotech sector remains in focus for investors with promising established players such as Taiwan Liposome along with newer firms making headway in China and beyond, with at least one new listing expected soon that has created a major buzz.

But as the Taipei Times reports--citing PricewaterhouseCoopers Taiwan deputy chairman Audrey Tseng--identifying the difference between promise and concrete results takes a sharp eye with growth prospects, technical capacity, and capital reserves.

“We assess the rate of growth of research and development expenditure, and its proportion in relations to operating costs and consolidated revenues,” Tseng told the newspaper, adding that cash reserves are the key focus for the ability to withstand failure among candidates in a pipeline.

The comments are of note following a scandal earlier this year over a sale of shares in Taiwan's largest biotech--OBI Pharma--by the daughter of former Academia Sinica president Wong Chi-huey, before disappointing trial results were announced for its lead breast cancer candidate.

The news rocked the science establishment in which the government has invested great hopes for growth, particularly with Taiwan's new President Tsai Ing-wen being a former biotech exec.

But OBI is only one of a handful of biotech and pharma companies listed on the Taipei main board exchange that have caught interest from domestic investors.

Other companies include: TaiMed Biologics; TWi Pharmaceuticals; PharmaEssentia; TaiGen Biotechnology; PharmaEngine; Medigen Biotechnology; Panion Biotech; and Mycenax Biotech.

What's more, in October of last year, Hsinchu-based JHL Biotech listed an unspecified number of shares on the Taiwan Emerging Stock Board, a platform for smaller companies to gauge investor interest for a wider public offer. And in July, Singapore-based oncology-focused biotech ASLAN suggested in a pre-IPO fundraising round of $23 million it would aim for a Taipei listing soon.

But Tseng said that for investors, understanding the players in the companies and the various stock options used to hire key talent, investors should proceed cautiously.

Tseng told the Taipei Times that using the cash on-hand metric could see firms with promising candidates end work prematurely if the money dries up, noting a number of new drugs developed by Taiwanese companies are based on compounds acquired from foreign companies.

- here's the story from the Taipei Times

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