Singapore’s sovereign wealth fund GIC and state investor Temasek have acquired a “significant stake” in the clinical research firm Novotech, which is majority-owned by private equity giant TPG.
GIC, an existing backer of the startup, said on Monday (March 31) that TPG also reinvested—through its TPG Asia VIII fund—in the latest financing round that aims to accelerate the Singaporean firm’s global growth. Neither the amount invested nor the stake acquired by the state investors was disclosed.
The Australian Financial Review and Bloomberg reported, citing anonymous sources, that the deal valued Novotech at over A$3 billion ($1.9 billion).
According to DealStreetAsia DATA VANTAGE, the startup was valued at $2.1 billion, prior to the latest financing.
Novotech posted a loss of $40 million for the year ended Dec 2023, according to DATA VANTAGE. Its revenue rose 23% to $325 million in the year.
Novotech had swung to a profit in 2022 on the back of higher revenues. The company and its subsidiaries posted total revenues of $262 million in 2022, up nearly 15% from $228 million in the previous year. It generated a profit of $2.98 million in the year compared with a loss of $9.04 million in 2021
According to DATA VANTAGE, TPG owned an over 60% stake in Novotech before the latest financing, while GIC was the second largest institutional shareholder. Other minority shareholders include America’s Kaiser Foundation Hospitals and HongShan, the Chinese venture capital firm that was hived off from US-based Sequoia Capital in 2023.
Novotech had raised $760 million from a group of global investors in January 2022.
Top shareholders of Novotech*
The latest capital infusion will support Novotech’s continued organic growth and strategic M&A initiatives, reinforcing its ambition to become a global biotech-focused clinical research organisation (CRO), GIC said in the announcement.
“Novotech’s proven track record of delivering high-quality outcomes for its biopharma customers has taken them beyond APAC to global markets. We are pleased to support Novotech alongside TPG with our long-term capital and global network in this next phase of growth. We look forward to working with the management team and our partners in driving sustained growth by investing in organic initiatives and M&A,” said Choo Yong Cheen, Chief Investment Officer of Private Equity at GIC.
Novotech is a full-service biotech specialist CRO headquartered in Singapore, with a global presence with more than 30 offices. It provides biotech and small- to mid-sized pharmaceutical companies with an accelerated path to market.
The company operates across Asia-Pacific, North America, and Europe, with partnerships spanning more than 5,000 trial sites.
Novotech Chief Executive Officer John Moller welcomed the investment, highlighting the company’s strong position to sustain its growth in the Asia-Pacific region, where demand for clinical trials is expected to grow at 15% annually. He also emphasised Novotech’s strategic expansion in the US and Europe.
“We have a commanding presence in the Asia Pacific region – which is only growing in popularity for global trials as the trend towards outsourcing continues, particularly among biotechs – and have made significant gains in the US and Europe through acquisitions. This investment will ensure we can continue our record of winning a growing share of larger, multi-region trials, particularly ones with a center of gravity in Asia, and it will also enable us to pursue larger, transformation acquisitions as our industry inevitably consolidates,” stated Moller.
TPG Asia has a strong track record of investing in healthcare across the Asia-Pacific region, with notable investments including iNova, Manipal Hospitals, One Healthcare Asia, Pathology Asia, and United Family Healthcare.
TPG acquired Novotech in 2017. The startup, which began life in Australia before shifting its headquarters to Singapore, had plans to list in Hong Kong, but the IPO was suspended in 2021 due to COVID-related uncertainties.
