China’s Qiming Venture Partners eyes biotech startups with global ambitions

Liquid is poured from a beaker in a lab. Photographer: Michael Fein/Bloomberg

Qiming Venture Partners, a top Chinese tech investor that’s plowed $1 billion into healthcare companies since 2006, is training its focus on biotech startups it thinks have the best chance of taking on the world’s top drugmakers.

The venture capital firm, an early backer of Chinese phone maker Xiaomi Corp. that’s now a tech behemoth with a $37 billion market value, is being more selective about its biotech investments, said Managing Partner William Hu.

This year, Qiming expects to match the $130 million it invested in a dozen health-care companies in 2018, and is looking beyond cancer therapies to identify those with promising treatments for kidney, liver, lung diseases as well as other deadly conditions, he said.

“We are looking for startups that have the potential to compete with those in the U.S. and on a global scale,” said Hu, who focuses on the firm’s health-care investments, in an interview in Shanghai. Ideally, targets will undertake research and development in China but “sell to the whole world,” he said.

‘More Discriminating’

Qiming is being more discriminate at a time when exuberance about Chinese biotech stocks is waning, after the stocks of Ascletis Pharma Inc. and several other recently-listed Chinese biotech companies slipped below their debut offering prices in Hong Kong. China’s increased spending on healthcare for its aging population and its overhaul of drug approvals to accelerate innovation has spurred a rush of capital into the world’s second-biggest drug market.

Still, investors are feeling unnerved by a slew of regulatory reforms. China is now rapidly approving novel medicines for use domestically, opening up the vast Chinese market for innovative pharmaceutical startups like the ones Qiming invests in. Yet, it’s also moved to drastically slash prices of generic drugs used in its public hospitals, which is putting pressure on drugmakers’ revenue streams.

Valuations for Chinese biotech stocks declined about 30 percent on average in the second half of 2018 from the first six months, Hu estimates.

“Very few companies can make it to IPO, which means there aren’t as many startups worth investing in,” he said.

Still, the venture firm, which has invested in more than 80 health-care companies, is scouting for investments in health services, including private hospitals, where revenue is predicted to reach about $96 billion by 2020, said Hu.

As many as six Qiming-backed health-care companies may go public across the U.S., Hong Kong and mainland China in the next two to three years, he said.

Ark Biosciences

Among those nearing that stage is Ark Biosciences Inc., founded by Roche Holding AG’s former China research chief Jim Wu. The company aims to develop the first approved treatment for respiratory syncytial virus, or RSV, a common cause in children suffering from pneumonia and a lung inflammation called bronchiolitis. The Shanghai-based startup may have an IPO later this year in the U.S., Hu said.

Qiming invested in Ark Biosciences when its RSV drug candidate, AK0529 or ziresovir, was in the first of three stages of patient studies usually required for regulatory approval. It’s since progressed to late-stage testing. If successful, ziresovir could become China’s inaugural first-in-disease medication to be sold globally. Johnson & Johnson and Gilead Sciences Inc. are among drugmakers also pursuing medications for RSV.

Several multinational pharmaceutical companies are looking to buy the rights to sell Ark Biosciences’s ziresovir overseas, Hu said.

“This is the kind of startup we want to invest in,” he said.

Still, finding the next Ark Biosciences is going to be more difficult.

“Fewer companies will meet investors’ benchmarks going forward,” Hu said. “We are setting our sights higher to those can that compete globally.”

Also read:

Qiming Venture seeks to raise $250m for second US healthcare fund

China: Qiming Venture joins $55m Series B round of Connect Biopharma

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.