Life sciences startups in Asia just got another shot in the arm with the $10 million investment in Engine Biosciences Pte. Ltd.–a Biotech company that’s applying machine learning to genomics for drug discovery.
With its headquarters in both Singapore and San Francisco, the company has managed to attract some impressive investors from both the U.S. and Asia. The round was co-led by Danhua Venture Capital and 6 Dimensions Capital, with additional participation from WuXi AppTec, EDBI, Pavilion Capital, Baidu Ventures, WI Harper and Nest.Bio Ventures, according to TechCrunch.
Fascination with synthetic biology–along with some close ties to the leaders in this emerging field–has spurred synthetic biologist Timothy Lu to partner with his brother Jeffrey on creating the transpacific biotech that plans to integrate artificial intelligence and machine learning with hands-on lab work in drug development to create a whole new kind of drug development platform.
The Brothers Lu aim to test a mind-boggling array of genetic interactions while simultaneously in search of what John Carroll at Endpoints terms, “those needles in the data-intense haystack that can point to multiple drug programs.”
The drug-development cycle as we know it now is challenged by complex biology and a one-by-one approach that invites slow development timelines and extraordinarily high failure rates, says CEO and co-founder Jeffrey Lu.
“Figuring out everything from target discovery to stratification of patient populations requires a complex assessment of all those factors,” said Lu.
In addition to MIT professor Timothy Lu, other renowned researchers on the Engine Biosciences team include fellow MIT prof Jim Collins; Mayo Clinic assistant professor Hu Li; and University of California San Diego assistant professor, Prashant Mali.
According to a statement, Engine Biosciences will use the Seed money to continue developing its drug-discovery platform, expand the executive and scientific team in Singapore and the U.S. and begin pre-clinical studies internally and with partners–which already include undisclosed research institutions and an unnamed Fortune 500 company in the U.S.
“The biopharmaceutical industry needs better approaches for R&D to deliver therapies to patients in need faster,” said Jeffrey Lu in a statement. “Engine’s data-driven platform allows researchers to not only uncover the critical gene interactions underlying diseases, but also test therapies that specifically target these interactions in a faster, cheaper and more precise fashion than [is] currently possible.”
So far, the technology is being used for drug repositioning, which creates new applications for existing drugs; target discovery, which looks at potential biological factors for disease; precision medicine through targeting specific genes; and pathway analysis.
The company says it already has seen proof-of-concept successes around treatments for cancer, neurodegenerative, autoimmune disorders and skin disorders.
“The lack of insight into complex and multi-factorial biological processes within cells contributes to the high failure rate across the drug development cycle. Engine Biosciences has pioneered a new approach to address this by generating novel data and insights that are highly relevant to the biological process,” said Dr. Leon Chen, founding CEO of 6 Dimensions Capital and a member of Engine’s board of directors.
I thought this news about Engine Biosciences makes for a well-timed, brief primer on “seed” funding. Why? Because mounting evidence suggests there will be a tsunami of others following it.
You can think of seed capital like an analogy for planting a seed for a tree, says Investopedia. This first round nurtures the seed or the idea for the startup. The seed hopefully grows into a mature operating business, or “tree,” when enough revenue is generated with the help of perseverance and investors’ wallets. The capital raised during the seed phase traditionally is around $500,000 to $2 million, but differs widely on a case by case basis, as is seen here with Engine Biosciences.
The key players in this seed round are more of the risk-fancying type. Usually, so-called “angel” investors and early stage venture capital firms dabble in this less formal round of funding. (Angels are affluent individuals, rather than institutions, who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.)
Often, seed startups have great ideas that generate a substantial number of enthusiastic users, but the company doesn’t know how it will monetize the business. Typically, follow-on Series A rounds raise approximately $2 million to $15 million, but this number has increased on average due to high-tech industry valuations, or “unicorns.”
Engine’s $10-million fundraiser is the largest amount of seed funding raised by a life sciences startup in the region and is also among the largest seed rounds closed in any industry in Southeast Asia, according to regional news source Tech in Asia data. It falls just short of the $12.5 million raised by Marvelstone Tech, a fintech spinout of investment firm Marvelstone Group, in February 2016, as well as $12 million raised by Alpha Fintech in April 2013.
However, both these latter rounds were raised from angel investors. Tech in Asia data suggest that Engine’s $10 million round is the biggest seed amount ever secured from institutional investors in Southeast Asia.
Steve's Take: I believe there are more large-scale fundings on the way for Southeast Asia's #biotech community
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Whether this is a sign that more large-scale fundings are on the way for Southeast Asia’s so-far sparse biotech startups remains to be seen. I believe it does.
Tech in Asia has recorded a relatively measly $399 million in total venture funding for Southeast Asian biotech and medical device startups since 2012. Almost a quarter of that–$98.9 million–was raised last year. That might suggest an upward trend in funding for life sciences and medical technology, though $80 million of that figure is accounted for by one Temasek-led investment in cancer treatment firm Tessa Therapeutics.
This biotech niche is overdue for sizzling growth. I’ll keep you abreast of breaking news, especially in the startup funding space over there. Stay tuned.