In a study entitled “Singapore's big biotech bet” by CLSA Asia-Pacific Markets, CLSA executive chairman Gary Coull writes: “Life science will be the business of the future, with the fattest margins, the fastest growth and the biggest profits.”

Coull adds that of all Asian countries, Singapore has been quickest to recognise the trend and create an environment in which scientific research can flourish. “Rapid advances are also being made in China, Australia and Japan, but the research is not without controversy and often lacks funding,” he says. “Singapore is putting up the capital, employing scientists on very comfortable packages and ensuring that they participate in the upside of any commercial development of their discoveries.”

The report found that the Singaporean Government has already committed S$2 billion (€954 million; US$1.2 billion) to building a regulatory framework, worldclass infrastructure and commercial incentives. It has actively sought to attract foreign scientists and researchers to its academic and public sector research programmes in an effort to achieve critical mass in its talent pool and accelerate technology transfer.

Evidence that the effort is being rewarded is compelling, with more than 80 percent of large pharmaceutical multinationals now boasting a presence in Singapore. In addition, cross-border collaborations between domestic and foreign firms are on the rise, Singapore's public institutes have participated in high-profile global research consortia such as the Human Genome Mapping Project, and the country is seeking the recruitment of 2,400 skilled professionals to its biomedical sector in 2004 – representing a 32 percent year-on-year increase.

The one dark cloud on the horizon appears to be the apparent unwillingness of the private sector to play a role in the success story. Government sources indicate that Singapore is home to more than 150 venture capital funds managing around S$16 billion, but the report found that only a “modest amount” is dedicated to biotech. In Asia as a whole, biotech accounts for a mere two to three percent of total private equity investment, which as a whole is well down on the peak of 2000.

When Singapore's biotech professionals were asked what factors could stunt the further development of the industry, “lack of funding” was the most common response. “Private venture capital is more comfortable with funding business development of established products rather than basic research or product discovery,” the report stated.

Although the Singapore Economic Development Board has earmarked US$1.4 billion for private sector R&D, grants, loans and equity investment in biomedical projects, priority is given to overseas companies that go on to establish operations in Singapore – which does little to benefit home-grown ventures.

The lack of funding could ultimately lead to Singapore's “big biotech bet” failing to pay out in the country where the wager was made. As the report concludes: “A prolonged scarcity of funding could trigger an exodus of home-grown companies to other markets.”