Deal focus: Novo spreads its wings in Southeast Asia

Novo Holdings, which manages the wealth of Denmark’s Novo Nordisk Foundation, hired an Asia head last year and instructed him to build a regional investment team. The initial recruits in Singapore have now completed their first two deals, which reflect the parent’s overriding interest in chronic disease management, albeit at different ends of the spectrum.

First, Novo Holdings participated in an $80 million Series C round for Halodoc, an Indonesian digital healthcare platform that allows patients to consult with doctors, make in-person appointments at hospitals and clinics, and order treatments online. It followed up by leading a $125 million Series C for Hummingbird Bioscience, a Singapore-headquartered drug developer.

The Singapore team worked on the Hummingbird deal with the Novo Ventures team in San Francisco, which had been tracking the start-up for four years. Novo Ventures normally invests in biotech players when they are 12-18 months away from making an investigational new drug (IND) application and need capital to accelerate clinical development, so Hummingbird was too early-stage. However, they liked what they saw and agreed to stay in touch.

“At the time it was a platform story that had yet to transition into more of a product-oriented opportunity, which is where we typically get involved. But we were impressed by the quality of the science and the directions the platform could be pointed,” says Kenneth Harrison, a partner at Novo Ventures. “We would check in every 4-6 months and this meant we were able to get in front of the Series C, do our diligence, and get a sense of how the company was positioned.”

Hummingbird’s platform is designed to identify antibodies for hard-to-drug targets. Using artificial intelligence-powered computational biology, it breaks down the critical functional regions of a protein that drives tumor growth, establishes which epitopes sitting on the surface of the protein are most vulnerable, drives the production of antibodies against a specific epitope, and then isolates the antibodies that bind to it.

The start-up now has two treatments on course to begin clinical trials this year: HMBD-001, a monoclonal antibody that focuses on HER3, a protein regarded as a potent driver of tumor growth and resistance against cancer drugs; and HMBD-002, which neutralizes a checkpoint protein that promotes resistance to immunotherapy by suppressing T-cell activity.

“Both of those have proved to be relatively intractable targets over the years. What caught our eye was their ability to identify and develop antibodies that would hit epitopes on these targets that other antibody platforms have been unable to identify. What they are doing is unique in the sense that there are no other antibodies that target these epitopes specifically,” says Harrison.

He adds that moving from platform to product is always challenging, because decisions are based on incomplete knowledge and it takes 4-5 years – plus considerable funding – to establish whether a decision was correct. However, preclinical data from the two drug programs suggests the Hummingbird team has chosen its areas of focus wisely.

With the Novo Ventures team unable to travel to Singapore, their Asia-based colleagues were responsible for in-person interaction with Hummingbird. This included Amit Kakar, head of Asia at Novo Holdings and an oncologist by training, getting comfortable with the start-up from a clinical standpoint once the science-based due diligence was completed.

Indonesia-based Halodoc could also be addressed from Singapore. Novo Holdings’ first point of contact for this business model was the well-established Chinese telemedicine platforms, but the firm doesn’t have people on the ground there yet. Indonesia was accessible and demonstrated growth potential.

Halodoc was established in 2016 as an offshoot of Mensa Group, an integrated pharmaceutical products provider. It has more than 20,000 doctors offering live online consultations, an offline network of 1,000 hospitals and 4,000 pharmacies, and a pharmacy e-commerce platform. However, some industry participants have questioned how easily telemedicine can be monetized in Indonesia, noting that Halodoc initially offered consultations for free with a view to profiting from drug sales.

Kakar responds that the business model does make sense, adding that free and discounted services were simply a means of attracting users. He believes digital platforms can provide an end-to-end solution across sourcing, consultation, drug distribution, and insurance, ultimately playing a “pivotal role in healthcare and disease management.”

In this sense, Novo Holdings’ involvement is strategic as well as financial. Novo Nordisk Foundation holds controlling stakes in diabetes care specialist Novo Nordisk and bioinnovation player Novozymes, which account for the bulk of its $62 billion in assets. “There is a great opportunity for chronic disease management through these platforms and that’s where a partnership with Novozymes, a world leader in metabolic disease management, could be so important,” Kakar says.

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• Topics
• Southeast Asia
• Healthcare
• Expansion
• Singapore
• Novo Holdings
• Pharmaceuticals