Investing in future.

Byline: Zia S Hasan

Covid-19 is a reality check for our startup ecosystem that has largely been ignoring biotech and health-related initiatives.

The global emergency for better health care facilities has exposed how much we are deviating from the original to live in a fantasised, artificial world. The pandemic has shifted focus from the augmented reality to the reality of 338,459 deaths and 5.3 million people infected around the globe.

Biotech requires high-value, high-risk investment. However, we have invested insignificantly on research. The dearth of health-conscious entrepreneurs should be blamed on all stakeholders. One reason is that academics are scared of stepping into the world of business. Scientists are reluctant to bring their research into a business setting because there are not many investors available.

Biotech firms are generally small and engage solely in research and development (R and D) of medicines. These companies use biotechnology to use microorganisms and enzymes to develop large molecule drugs that can be used for a specific disease or condition. Because biotech companies mimic cellular processes, the length of time is extremely long, averaging 10 to 15 years.

Biotech initiatives also need to involve many regulatory authorities. Hence, a delay is expected. This highlights the importance of a unique strategy for investment in biotech companies. Post-Covid-19, we might see a surge in biotech initiatives and investment.

The focus of health care startups is on fitness and wellness, not on diseases, epidemiology and diagnostics

Health care investing requires a multifaceted approach to understand underlying drivers. One approach can be to bring pharmaceutical companies into the startup ecosystem. These companies often spend a significant percentage of revenue on R and D to discover new compounds and can fund research.

According to the World Bank, the current health expenditure for China is 4.98 per cent of GDP, United Kingdom 9.76pc, United States 17.07pc, Italy 8.94pc, United Arab Emirates 3.52pc and Pakistan 2.75pc. The United States devotes to health care more than other OECD countries. However, despite higher health care spending, its recent Covid-19 crisis is an eye-opener.

The United States ranks first in the number of biotech firms, followed by Spain, France and South Korea. Meanwhile, China doubled its expenditure on R and D between 2008 and 2012 and became the top spender in R and D in 2019. The way China handled...