Future Insight: Biotech investment in 2017


The year 2017 would be a turning point for biotech investment, as we may witness the shift of its business center from the Silicon Valley to China, and the reason lies in the industry’s performance in 2016.

In 2016, the biotech industry and investment were still one of the most popular trends in the Silicon Valley, and the US still occupies 70% of the world market in this area. Genes news, the biotech website, has published a list of 25 largest biotech firms in September 2016, which demonstrated the predominance of the US firms in the field—14 countries listed is from America. Alone in 2016, the listed 25 companies have raised more than $1 trillion, 10% higher than the 25 firms back in 2014, although a little lower than that of 2015.

However, the biotech stock market had fallen heavily from its peak in 2016. Ever since the downturn of Nasdaq index in Summer 2015, biotech stocks have suffered from major setbacks: in total, their prices had decreased 37% compared to 2015, returning to the 2014 level. By the end of 2016, prices became stable and even picked up a little, but still miles away from 2015.

In another ranking of 10 most potential biotech stocks in 2016 published by The Streets, only 4 of the 25 largest firms entered the list. It shows that the US market has entered a “fatigued” period; though still popular in many ways, the capital market seemed to have lost its patience: The biotech report released by EY last year pointed out that biotech investment pool was already “full”, at least for the top firms. Right now, only VCs are still looking for opportunities, but the incoming capital is not necessarily put to best use given the circumstances.

Interestingly, two Chinese firms had a good harvest in the seemingly “fatigued” US market: the state-owned Sinopharm ranked No. 19 among 25 largest biotech firms, one of the best rankings Chinese firm had got during the years; the private-owned China Biologic Products ranked 3rd among the 10 most potential biotech stocks, showing its great potentialities in the future.

Speaking of which, biotech, healthcare and medication have become the top choice for Chinese capital in recent years, especially the healthcare + hi-tech mode originated in Silicon Valley. The trending artificial intelligence, VR & AR techniques have all entered Chinese biotech industry, forming so-called “deep investment” projects driven by technological progress and market demand. These projects will play a more important role in the future, as the Chinese biotech market has a market of only 1 trillion RMB (US$150 billion), with still great potentialities ahead. In addition, China’s aging demography indicates high demand for biotech and healthcare products: by 2036, China will have 20% of its population aged 65 or above. Altogether, the growing demand, technological progress and large capital inflow will contribute greatly to the future Chinese biotech market.

This trend agrees with the journey of Dandelion Global in the past years. We have been devoting ourselves to the business consulting of biotech, hi-tech and green industry for 13 years, and by helping and understanding our customers in the US and China, we are growing with their footsteps as well. Today, both the investment capital and biotech projects are looking for new markets, and China is one of the best choices for them. As an experienced consultant, Dandelion Global will create your plan to fit each individual projects, and corresponding, concrete strategies that can find you targeted investors. Dandelion Global will be your bridge, your platform for being part of this movement.