Legend Capital invested in 29 healthcare companies that officially disclosed financing rounds in 2022, according to the VBDATA Database. Since 2007, Legend Capital has continuously invested in healthcare across industry sub-sectors including innovative drugs, biotechnology, medical devices, diagnostic technology, professional services and supply chain. Overtime, it has built a powerful healthcare ecosystem encompassing more than 140 portfolio companies. Through value-added initiatives including strategic management and business empowerment activities, Legend Capital has the capability to bring far more value to the table in addition to financial resources.Breakthrough and global innovations are the key benchmarks by which Legend Capital judges and selects projects in a changing external environment. How did Legend Capital navigate the challenges of 2022 and how does it see the market in 2023? What are the key healthcare investment themes? In an interview with VCBeat, Jafar Wang, Co-Chief Investment Officer of Legend Capital, shared his perspectives:
"Five significant changes in primary market investments"
Legend Capital observed several important evolvements in the healthcare investment market during 2022:
First, the industry's overall investment pace slowed down, with considerable decrease in deal count, deal size, and the speed of decision-making. Activity level of the healthcare investment market has returned to normalcy after an overheated period of 2020-2021, which now appears on the same level as 2019.
Second, there has been significant changes in investors' selection criteria. Institutional investors need to evaluate whether a project has demonstrated breakthrough innovation, whether it is among the top three in its field, and whether it has the potential to compete on the global stage for first-in-class or best-in-class status. As a result, investors look to sector leaders for investment opportunities.
Third, there is growing emphasis on exit and exit management.
Fourth, emerging markets are receiving more attention as industry participants turn their overseas focus from developed markets to emerging economies. On the one hand, investors have increased their allocation to emerging markets, such as Legend Capital's expansion into Southeast Asia. Similarly, more players are aggressively expanding abroad in the hope that their products and services will reach the wider emerging markets. For Chinese healthcare companies, these markets will be a key destination in the next five to ten years.
Lastly, there is general awareness in the industry that the window for biotech companies to transition into biopharma has closed for the moment. Biotech companies should continue to focus on their core competencies in technology innovation and product development, while actively pursue collaborations in manufacturing, supply chain, and downstream commercialization with top-tier industry players.
"An investment strategy focused on innovation and early-stage opportunities"
Regardless of changes to the external environment, Legend Capital continues to uphold the importance of being an investor in value, innovation, in early-stage firms, in core technologies, and taking the long view. Our selection criteria for deals remain consistently high.
In 2022, Legend Capital established a Frontier Biotechnology Fund to invest in innovative seed and start-up stage biotechnology and MedTech companies.
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