Access to capital is the difference between life and death for small biotechs and life science start-ups. But in an industry with high levels of failure and decades-long development cycles, finding the right investors – those with sufficiently deep pockets and enough of an appetite for risk – can be extremely challenging.
Taiwan has been ahead of the curve in its region on bridging this gap, establishing the Taipei Exchange (TPEx) back in 1994, two years before Korea’s equivalent KOSDAQ and a full five years ahead of Hong Kong’s Growth Enterprise Market and Japan’s startup board.
While the Taiwan Stock Exchange (TWSE) serves large-cap companies such as semi-conductor super major Taiwan Semiconductor Manufacturing Corporation (TSMC), TPEx is dedicated to small- and medium-enterprises, particularly those in ICT, advanced manufacturing, and biotech.
SMEs account for more than 98 percent of all businesses in Taiwan and generate nearly 80 percent of domestic employment, explains TPEx Chairman Lih-Chung Chien, who also notes that TPEx has been recognised by the World Bank as one of the most experienced exchanges globally for supporting SMEs.
“SMEs and start-ups often face challenges: limited resources, lower visibility, difficulties in financing and talent recruitment,” he says, laying out how TPEx’s offering to these companies has evolved since its foundation in the mid-1990s. “They require policy guidance, financial support, and substantial assistance. Through TPEx’s market structure, the listing requirements are relatively friendly, and listing costs are lower. The procedure for secondary public offerings is simple and efficient. Innovation enterprises tend to gain investor recognition more easily in our market and often enjoy higher price-to-earnings ratios.”
Companies can list on TPEx’s Main Board, its pre-listing market (Emerging Stock Board), or join an incubation board known as the Go Incubation Board for Startup and Acceleration Firms (GISA), with a clear pathway between them. “138 companies are currently registered on GISA and we offer free advisory programmes focused on fundraising, governance, and capital market readiness, helping early-stage companies bridge the gap to public markets,” notes Chien.
“So far, 34 companies have progressed from the GISA to the Emerging Stock Board, with eight advancing further to the TPEx Main Board or TWSE,” he adds. Companies featured in this report that are listed on TPEx include EirGenix, OBI Pharma, Mycenax, Pharmosa, PharmaEngine, AP Biosciences, and TLC Bio.
While some Taiwanese biotechs will inevitably look to list on NASDAQ, given the USA’s track record on biotech funding and the exchange’s proximity to the world’s biggest market, Chien is hopeful that TPEx can continue to support local innovation on Taiwan and maintain its differentiated offering.
“From an investment perspective, Taiwan offers several advantages,” he concludes. “The capital market, led by TPEx, is structured to support innovative companies, providing mechanisms such as technology-based enterprise mechanism for biotech firms, which helps investors make informed decisions. Over the years, the biomedical cluster has grown larger and more robust. While international markets are highly competitive for raising funds, Taiwan’s ecosystem is more accessible, with supportive policies, focused government initiatives, and a capital platform designed to match opportunities with investor interest.”
