Chinese Tech-to-Market Startups Forge Ahead in 2023 Amid Industry Winter

On the last working day of 2023, SNUG01, a gene therapy drug developed by SINEUGENE using adeno-associated virus (AAV) as a vector, completed its first compassionate use dosing. Subsequently, Professor Jia Yichang, the founder, shared this update on his social media feed.

The good news has been welcomed not only by SINEUGENE but also by TRANSCEND VIVOSCOPE.

TRANSCEND VIVOSCOPE, founded by Academician Cheng Heping, announced the completion of a multi-million yuan A2 round of financing, jointly invested by CITIC Construction Investment Capital, Guangzhou Tongxin Sci-Tech Innovation Fund, Shouzheng Zefu, and existing shareholders Beijing Synergy Holdings, Guangdong Synergy Holdings, and Xingrun Assets. The funds from this round will mainly be used for the research and development of multiphoton microscopes and multiphoton medical devices, as well as the expansion into overseas markets.

In 2023, most of the commercialization enterprises that VCBeat contacted had such stories:There have been new developments in the business, new partners in the team, and financing is proceeding steadily.

Obviously, the snow of 2023 did not fall on them.

In October 2022, VCBeat reported on Professor Sun Meixiu of Wanyingmei (Tianjin) Health Technology Co., Ltd. At that time, the company’s product pipeline included a breath analyzer for lung cancer screening and diagnosis, which was in the process of applying for a Class III medical device certification, while the breath detection system was still at the prototype development stage.

In the middle of last year, when VCBeat learned more about the development of Wanyingmei, Ma Wanli, the head of the financing department, told us:

"Significant progress has been made in business, the business landscape has changed considerably, very positive! The business pipeline is now more robust, with multiple clinical trials advancing simultaneously, and several Class II certificates are being prepared for application."

A few more months later (November 2023), Professor Sun Meixiu contacted VCBeat, stating thatWanyingmei's "Exhaled Breath Analyzer" Product Obtains China's Class II Medical Device Registration CertificateIn the three years since its establishment, this enterprise, dedicated to the transformation of breath detection technology research results, has achieved a milestone.

Standing at the high starting point of universities and technology, Wanyingmei (Tianjin) Health Technology Co., Ltd. focuses on unmet clinical needs and possesses a high technical barrier. This provides a unique advantage in an industry characterized by intense competition, making its products or services more difficult for competitors to imitate or replace.

It can be said that technology research and development is the first challenge for all startup companies.In the end, those who can succeed will win by the maturity of their production lines.Scientific founder Wang Ming (pseudonym) clearly told VCBeat that more than 80% of the company's funds are spent on research and development.

In 2023, bankruptcy, selling factories, shutting down pipelines... one cut after another, selling assets at a loss. For many biopharmaceutical companies, "slimming down to regain strength and stockpiling for the winter" has become the top priority in this cold spell. However, it seems that the R&D pace of commercialized enterprises has not been affected by the chill. We often hear news about their team entries, obtaining certifications, collaborations, and international expansions.

Taking Jinweike Biotechnology, founded under the leadership of Academician Wei Yuquan, as an example, the company currently has eight product pipelines in its portfolio, covering both common and rare diseases, as well as local and systemic drug delivery. Among these, the product pipeline "JWK001" targeting neovascular age-related macular degeneration (nAMD), a common disease, completed its first dosing at West China Hospital in June 2023, and by the end of November, its IND application was accepted by the CDE.

On the one hand, it is becauseThe commercialization of research achievements is generally still in its early stages, with a limited number of product pipelines being developed. Companies face relatively less pressure in research and development.；

On the other hand, it also lies inA profound accumulation of research is the underlying foundation of every enterprise that transforms achievements.TGI's Academician Zhigang Tian has accumulated more than 20 years of research experience in NK cell immunotherapy technology, Professor Hongkui Deng of Beijing Beiqi Biomedicine Co., Ltd. has over 20 years of stem cell research experience, and Professor Zhongze Gu of Aiweide has been engaged in human organ chip research for more than 20 years...

Almost all scientist founders interviewed by Orange Bureau also told us that at any time, technology research and development is the most important task. The faster the product is made, the better the company will be.

In 2023, the layoff storm in the technology sector undoubtedly became the focus of many industries.

This storm has not only swept through the tech circle but has also gradually spread to industries such as finance, retail, and automotive. The frequent news of layoffs has caused fear among many. According to the latest report by Fierce Biotech, a leading industry media outlet, the biopharmaceutical sector has not been spared either. Statistics show that as of June 22, 2023, 91 biopharmaceutical companies worldwide have implemented layoffs, marking a 51.7% increase from 60 companies in the first half of 2022—an alarming rise.

However, in 2023, when pay cuts and layoffs have become the norm, enterprises engaged in the transformation of scientific and technological achievements seem to exhibit an even greater thirst for talent.

Around the product pipeline, Beijing Beiqi Biomedicine Co., Ltd. is filling over 30 positions including Drug QA Specialist, Bioinformatics Engineer, and Process Development Director; SINEUGENE is opening roles such as Drug Registration Specialist, Pharmaceutical Deputy Director, and Gene Therapy Engineer; High Dimension Pharma is still seeking talent in biotechnology research, business development, and cellular biochemistry...

Excellent talent is crucial for the long-term development of a company.Against the backdrop of continuously expanding business, achievement transformation enterprises require more professional talent to support various operations within the company.Therefore, they have spared no effort in releasing recruitment information through various channels, hoping to attract more outstanding talents. These channels include but are not limited to: recommending talents via personal connections, posting job advertisements on social media, collaborating with recruitment websites, and establishing cooperative relationships with universities.

During the recruitment process, commercialization enterprises pay special attention to evaluating candidates' professional abilities, work experience, and personal qualities. Yang Yang, CEO of Jinweike Biotechnology, believes that the key factor in hiring talent for a startup is matching. "I communicate directly with candidates and conduct a comprehensive assessment based on their professional skills, work experience, and personal aspirations."

In order to better attract and retain talent, competitive salaries and benefits, as well as good career development opportunities, are essential. Guo Jiacong, COO of Beijing Beiqi Biomedicine Co., Ltd., told VCBeat that at the time of its establishment, the company set up a large stock option pool. Every colleague who contributes to Beiqi Biomedicine will be granted a significant amount of equity, becoming a co-founder and partner of the company.

A technology transfer enterprise must not only allow employees to gain a sense of value but also be willing to invest.

In 2023, the cold wind swept across the fields, and star projects met with setbacks. Popular tracks no longer represent high returns, and investment and financing for mature projects have become even more cautious, but transformation projects are radiating infinite possibilities.

In 2023, Huaboron, founded by Professor Wang Sheng from Xi'an Jiaotong University, completed an angel round of financing exceeding 100 million RMB; Turing Quantum, established by Professor Jin Xianmin from Shanghai Jiaotong University, completed a Series A round of financing worth several hundred million RMB, with a valuation nearing 3 billion RMB; Micro-Factory, founded by Professor Chen Guoqiang, completed a Series A+ round of financing worth 359 million RMB...

These projects, which are often spin-offs from universities and research institutes, typically have deep technological accumulation and innovation capabilities, with independent intellectual property rights and core technologies. Backed by cutting-edge technology, the transformation of these projects is more likely to achieve sustainable development.

Moreover, unlike some star projects, the transformation projects have fully considered market demand and commercialization paths in the early stage of research and development. They do not merely stay at the laboratory stage, butThrough continuous improvement and iteration of technology via collaboration with the industry and practical applications.From the outset, the achievement transformation project has greater market potential and investment value.

In the selection of entrepreneurial teams, those with rich industry experience and professional background are preferred."Professor + CTO + CEO"The model is presented to investors. This is true for Micro-purchase Workshop and also for Huapeng Neutron. Coupled with the policy slogan of "investing early, investing small, investing in transformation" in recent years, the transformation of scientific and technological achievements has become a direction that investors have to pay attention to. Zhang Li (pseudonym), a scientist turned entrepreneur, told Orange Bureau that he meets with two or three investors every week, and is expected to complete Series A financing in early 2024.

Cold, the keyword of 2023.

However, in the interviews over the past year, what VCBeat felt most clearly was not the lament of pessimism, but the plan of preparing for the future. For example, a doctor-founder told VCBeat that despite the market situation not being particularly good in recent years, coupled with economic pressures leading to insufficient industry confidence, they planned to cut costs on one hand and try to achieve sales as much as possible on the other.

As Luo Pang said in his 2024 New Year's Eve speech, an optimist is not someone who believes it will always be sunny, but someone who immediately looks for an umbrella after hearing the forecast.