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China life science investment reaches record high in 2018

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Investment in China life science reached record highs across a number of key categories, according to data compiled by Shanghai-based ChinaBio.

The numbers, which were presented at the China Showcase in San Francisco, underscored the maturation of the country’s life science industry and the influx of new capital flowing in from a diverse range of sources.

Some of the highlights from the report include the fact that $43 billion was raised for new venture capital and private equity funds targeting China life science investments in 2018 and $17 billion was invested in Chinese life sciences companies, a 36 percent increase from the year prior.

Exit activity was also up with $34 billion in value created in M&A deals and average deal value breaching $200 million. The public markets have also seen high activity with $7 billion in IPO funding for Chinese life science companies, up 40 percent from 2017.

Part of the growth can be attributed to an improved regulatory system at the CFDA which has created expedited review and approvals, especially for foreign drugs that have been already approved in their home countries.

The major outstanding question is whether this growth can be sustainable among the backdrop of an increasingly testy trade relationship between China and the United States.

As of yet, at least, no US-China cross-border biopharma deals have been rejected but the pace of deals did slow down in the last quarter of 2018.

One potential beneficiary of this uncertainty, according to ChinaBio, could be Europe’s biotech ecosystem, which has lower valuations than either China or the U.S.

Photo: Claffra, Getty Images

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