Newton Biocapital VC Fund is leading the investment wave in Japanese biotechnology

As American and European investors’ interest in Japanese biopharmaceutical startups grows, Belgian venture capital firm Newton Biocapital has launched a 150 million-euro fund to exploit the synergies between European and Japanese life sciences.

Japan boasts a world-class technology industry in addition to the thriving life sciences scene. The country has large companies including Takeda, Eisai and Astellas Pharma, and in the face of a rapidly aging population, focuses on control of chronic diseases including cardiovascular disease and type 2 diabetes.

While the biotech startup scene of Japan less advanced than US top hubs for example, Boston, it is attracting more and more investment from abroad. Last year, American and European venture capitalists took part in eight biopharmaceutical deals with Japan totaling 86.4 million euros ($ 98 million). That’s almost three times more than in 2019 and 2020, and that’s reflected a record for raising venture capital across the global biotechnology industry in 2021.

One of the most prominent foreign investors in Japanese biotech startups is the Belgian venture capital company (VC) Newton Biocapital, which has offices in Brussels and Tokyo. Newton Biocapital invests in European and Japanese campaigns to combat chronic chronic diseases, including cancer and metabolic diseases.

In 2017, Newton Biocapital launched its first venture fund Newton Biocapital I (NBC I) worth 114 million euros. The firm has created startups including Epics Therapeutics and ChromaCure in Belgium, and has invested in Japanese companies including EditForce and J-Pharma.

This week Newton Biocapital set up its second venture fund, NBC II, with a target of € 150 million. The fund follows the same strategy as NBC I, and has so far raised 50 million euros. It is planned to invest in about 15 Japanese and European startups, each of which will receive from 5 to 10 million euros.

«In Belgium, there are world-class academic centers where research regularly leads to the creation of dedicated companies,“- said a representative of Newton Biocapital. «In Japan, we are trying to be a catalyst to create dedicated companies.

American investors are the most common foreign participants in Japanese biotech venture rounds, such as F-Prime Capital. SoftBank Group technology investor Vision Fund makes its first Japanese enterprise in the life sciences October 2021 when it led to the A series round of 53 million euros ($ 59.7 million) collected by Aculys Pharma. Aculys seeks to bring to the Japanese market the treatment of sleep disorders approved in the US and Europe.

European investors who are actively involved in Japanese biotech venture rounds include HBM Healthcare Investments in Switzerland and the British firm Eight Road Ventures. However, Newton Biocapital is one of the most prolific European investors in this space.

According to public statement from Allen Parthoens, Managing Partner of Newton Biocapital, will unlock the firm’s ties to European and Japanese life sciences »unique opportunities for our portfolio companies through our connections with international investors and pharmaceutical companies.

“By continuing to harness the synergies between these two complementary regions with NBC II, we will continue to support value creation for all.

Newton Biocapital uses its familiarities with clinicians and local industry players in both regions to help companies bridge the geographic gap and develop their treatments in another region. In addition, the venture fund will work to increase the number of international syndicate investors supporting its portfolio companies.

Another European company that uses its ties with Japan is the French biotech company Poxel. У June 2021, the company’s drug for type 2 diabetes imaglimin got the green light in Japan through its partner Sumitomo Dainippon Pharma. Japanese approval is ahead of any U.S. or EU regulatory decision, and as one of the world’s largest markets for type 2 diabetes, Japan provides opportunities for companies seeking to combat metabolic disorders.

However, one of the biggest challenges for drug development in Japan is Fr. lack of clarity regarding compensation, according to the World Economic Forum. The non-transparent pricing policy for medicines causes uncertainty for both investors and companies, which leads to lower research and development costs. If Japan makes compensation decisions more transparent, it could become a much bigger investment in life sciences.

Cover image by Elena Reska Newton Biocapital VC Fund is leading the investment wave in Japanese biotechnology

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