Over the last few years, I have had the chance to meet some amazing entrepreneurs and investors. Due to the immense learning from those opportunities (along with God's grace), I can say that I have seen reasonable exits in the life-sciences sectors. They have helped me build some thoughts on investing in life-sciences companies (medical device, biotech drugs, etc). Below are some of my thoughts on investing into healthcare startups purely from 'returns' perspective.
(1) Life-sciences investment need to be analysed more from a globally competitive level and less from region specific level.
(2) Majority diseases are globally prevalent - those local have small market. Disease indications being catered to should have at-least USD 1bn market at a global scale for it to make investment worthy from the private sector. That said, a locally prevalent disease with a smaller market size could be addressed via public sector investments.
(3) Strategic exit to large healthcare companies such as Novartis, Pfizer, Medtronics, Stryker, is the most prevalent exit.
(4) Large strategics have global distributions, easy to acquire technology for example in the West and penetrate in the East. A startup may claim 'first' in a local region but maybe '200th' at a global level. Solutions that works in the West, in most cases work in the East. However, the above may not be true for example in a 'consumer' sector where local culture/ taste prevails. What works in the West may not work in the East.
Disclaimer: Purely personal thoughts. May vary from investor to investor.
*Rohit Singh is Vice President, Investments at Xeraya Capital, Malaysia. Prior to Xeraya, Rohit worked with PwC, KPMG and Rabobank in their respective M&A/ IB teams. He graduated as an engineer and has an MBA from India's leading institution - Indian Institute of Technology, Kharagpur. He is also a Chartered Financial Analyst (CFA) Charter holder.