Two IPOs from One Chemistry Department: Sepax Technologies and Cloudbreak Pharma File for Listings

Two founders from the chemistry department are lining up for the IPO bell-ringing ceremony.

The investment community learned that recently, the Listing Review Committee of the Shanghai Stock Exchange has approved the initial public offering application of SuZhou Sepax Technologies Co., Ltd. (referred to as "Sepax Technologies"), marking the first biotech company to pass the review in 2024. The person at the helm, Huang Xueying, graduated from the Department of Chemistry at Nanjing University.

Interestingly, at the end of November, another biotech company, Cloudbreak Pharma, submitted its prospectus to the Hong Kong Stock Exchange, planning to list on the Hong Kong Main Board. Interestingly, the company's founder, Ni Jinsong, is also an alumnus of the Chemistry Department of Nanjing University, graduating from the Chemistry Department in 1989.

A chemistry department is spinning off two IPOs, which is surprising. For a long time, the saying "Biochemistry, Environmental Science, and Materials—The Four Great Tragedies" has been widely heard. However, in recent years, with the rise of new energy and new materials sectors, talents emerging from these once "tragic" majors have become highly sought after by the venture capital circle. This reflects a glimpse of the ongoing industrial transformation.

Nanjing University Department of Chemistry

Two Alumni Are About to Ring the IPO Bell

Let's start with the latest IPO.

Sepax Technologies: A Typical Scholar-Turned-Entrepreneur Story. In 1990, Huang Xueying graduated from the Department of Chemistry at Nanjing University and became an engineer. Later, he went to the United States to pursue a doctoral degree and engage in postdoctoral research, delving into the field of ion chromatography, which became the starting point for his future entrepreneurship.

In 2002, Huang Xueying and his wife founded Sepax Technologies in the United States, focusing on developing new materials for liquid chromatography separation and analysis. A few years later, Huang Xueying decided to return to China to develop and build a world-class industrial system for biologics and pharmaceutical separation and purification in China. Thus, in 2009, SuZhou Sepax Technologies Co., Ltd. was officially born in Suzhou.

Today, Sepax Medical has become a substantial enterprise that integrates research and development, production, and global sales, with over 1,000 detailed product categories and more than 5,000 global customers. It is also a supplier to top pharmaceutical companies such as Roche, Pfizer, Eli Lilly, Gan & Lee Pharmaceuticals, Chia Tai Tianqing, and Qilu Pharmaceutical.

Behind them gathered a group of investors. The company completed A and B rounds of financing totaling 82 million yuan in 2015 and 2018, receiving support from Tonghua Investment, Huatai Health Fund, and others. By 2021, Sepax Technologies first completed a C round of financing exceeding 200 million yuan in March, introducing heavyweight strategic investors such as China Life Healthcare Fund and Fosun Fortune; then in November, it completed a D round of financing exceeding 500 million yuan. In addition to well-known institutions like CPE Yuanfeng, Hillhouse Ventures, China National Pharmaceutical Capital, and Sherpa Healthcare Partners, industrial investors such as Sinovac Biotech and Gan & Lee Pharmaceuticals also participated.

Let's take a look at another company helmed by an alumnus of the Chemistry Department of Nanjing University—Cloudbreak Pharma, which recently filed for listing on the Hong Kong Stock Exchange.

This is an ophthalmic pharmaceutical company. The founder, Ni Jinsong, graduated from the Chemistry Department of Nanjing University in 1989 and has nearly 20 years of experience in pharmaceutical research and development. Over the past eight years, Cloudbreak Pharma's base has been established in Guangzhou and Suzhou, and it has also built a pipeline consisting of seven drug candidates, covering major diseases of both the anterior and posterior segments of the eye. Its drug, CBT-009, has the potential to become the world's best-in-class treatment for juvenile myopia.

Similarly, Cloudbreak Pharma has undergone several rounds of financing: Hua Medicine Capital, Grand Pharmaceutical, CCB International, CDH Fund, GaoTeJia Investment, DeYi Capital, YiFeng Capital, GuanZi Capital, YingKe Capital, Xinyin Grand Medical Investment, XingZheng Capital, Oriental Fortune Capital, YueJun Investment, HaoYue Capital, and BOC International are all part of it, forming a grand lineup.

It can be seen that the two IPOs have some distinct commonalities: they belong to the biotech sector, their founders are from Nanjing University, and both come from the chemistry department. This is no coincidence.

Tracing back, the School of Chemistry and Chemical Engineering at Nanjing University was initially established in 1920 as one of the earliest chemistry departments in China. It was later formed by the merger of the Chemistry Department of the former National Central University and the Chemistry Department of Jinling University to create the Chemistry Department of Nanjing University. In 1993, the School of Chemistry and Chemical Engineering was established. Over 50 academicians of the Chinese Academy of Sciences have studied and taught here, making its history long and distinguished.

Among them, the chemistry discipline of Nanjing University is a national key discipline of the first-level subject, and has been selected multiple times for the "Double First-Class" discipline construction list. According to professional rankings, the chemistry department of Nanjing University not only consistently ranks among the top three in China, but also stands at the 5th position globally among research institutions and the 2nd position globally among universities.

Peaches and plums all over the world. The most talked-about figure is undoubtedly Sun Piaoyang of Hengrui Medicine, who once studied in the Organic Chemistry program at Nanjing University's Chemistry Department. In 2001, he led Hengrui Medicine to be listed on the Shanghai Stock Exchange, becoming the "King of A-share Pharmaceuticals." Together with his wife, also a Nanjing University alumna, they each preside over a listed company, and are acclaimed as China’s “King and Queen of Pharmaceuticals.”

To name a few, Sun Xiangzhen, the founder of South China Photoelectric; Yang Minmin, the founder of Pharmablock; Xu Yaocang, the founder of Abbisko Therapeutics; Zhang Xiaodong, the founder of Maxin Health; Fangliang Zhang, the founder of Legend Biotech and GenScript; Zhen Gu, the co-founder of Zenshine Pharmaceuticals; Fu Heliang, the chairman of Adde Pharmaceuticals; Gao Jifan, the chairman of Trina Solar… They all come from the Chemistry Department of Nanjing University.

Department of Chemistry: A Rising Force in Entrepreneurship

I don't know when, but students from the chemistry department have become a strong force in the entrepreneurial scene of universities.

Not long ago, JunShengTai Pharmaceutical, which went public on the Hong Kong Stock Exchange, is led by Liu Liping, a female Ph.D. in chemistry from Nankai University. Born into a medical family, Liu Liping founded JunShengTai in Shenzhen in 2011 to focus on NASH drug research. Over the past 11 years, JunShengTai has completed seven rounds of financing, raising over 1.4 billion yuan, with backing from a group of VC/PE firms including TC Capital, JiaTai Fund, Greater Bay Area Fund, Hengzhi Investment, Borui Capital, TF Capital, Haichuang Fund, Mingfeng Capital, and Blue Ocean Capital.

In the ESI subject ranking, Nankai's chemistry discipline ranks among the top 1‰ globally and has nurtured notable entrepreneurs such as Liu Xuejun, founder of Yaotan Pharmaceuticals, and Lü Xiangyang, founder and CEO of Laikang Medicine. During the commemorative conference for the 100th anniversary of Nankai University’s chemistry discipline in 2021, alumni from the chemistry department—including Zhao Guofeng, chairman of Jiuri New Materials; Kan Ying, chairman of Shanghai Createch Pharm; and Zheng Baofu, chairman of Shanghai Haoyuan Pharm—donated 160 million yuan to establish the Nankai University Chemistry Discipline Development Fund.

And then there's the Chemistry Department of Peking University. In November last year, WuXi Xelaprogene rang the bell for its IPO. Its helmsman, Li Ge, entered Peking University in 1985 and accidentally ended up in the Chemistry Department, where he and his wife Zhao Ning, also an alumnus of the same department, became a well-known academic power couple. In 2000, he embarked on the entrepreneurial journey of "WuXi," subsequently securing four IPOs and becoming a sought-after figure for top-tier investors like Sequoia, Hillhouse, Legend Capital, Temasek, UBS, Warburg Pincus, and Qatar Investment Authority, creating a "WuXi empire" with a market value exceeding 450 billion yuan.

With over 90 years of history, the Department of Chemistry at Tsinghua University is one of the top academic chemistry departments in China. Its graduates work across various industries such as chemical engineering, biology, pharmaceuticals, and materials. In December last year, a billion-dollar IPO emerged from here: CRO service provider Liuhe Ningyuan successfully passed its IPO review. Founder Liu Bo graduated from Tsinghua’s Organic Chemistry program. In 2007, he co-founded the company with alumni and professors from the same department, starting in a modest laboratory in Zhongguan Village. The company grew to become an industry leader, securing support from VC/PE firms such as CICC, Legend Capital, Fortune Venture Capital, Tsinghua Holdings YinXing, China Merchants Capital, and Sherpa Healthcare Partners within four years.

The Chemistry Department of Lanzhou University, established in 1946, was once the strongest chemistry department in China. Nowadays, many students have devoted themselves to the new energy industry. For instance, Weilan New Energy, a unicorn in solid-state batteries, was co-founded in 2016 by Academician Chen Liquan at the age of 82, along with Yu Huigen and Li Hong, both alumni of Lanzhou University's chemistry department. Over the past eight years, Weilan New Energy has risen to prominence, attracting industrial investors such as Huawei's Hubble, Xiaomi, and NIO in 2021. To date, its valuation has exceeded 15 billion yuan, and it has publicly announced plans to go public by 2025.

Liu Xiucái, the founder of Cathay Biotech, the first synthetic biology stock, graduated from the Department of Modern Chemistry at the University of Science and Technology of China; Xu Jinfu, the leader of Tianci Materials with a market value of billions, comes from the Department of Chemistry at Hangzhou University; and New Horizon Health, the first stock in early cancer screening, was founded by Zhu Yeqing, Chen Yiyou, and Lü Ning from Peking University's Department of Chemistry… On and off the bell-ringing stage, the chemistry department has quietly assembled a legion.

"You could say, chemists are everywhere!"An investor once sighed that students majoring in chemistry are now everywhere, from pharmaceuticals, life sciences, and cosmetics to new energy, new materials, and synthetic biology. A venture capital friend even joked, "We are now chasing after chemistry geniuses to invest in."

"Career in 'Heavenly Pit' Makes a Comeback"

They Begin to Take the Stage

This is a scene that was hardly imaginable in the past.

At one time, the saying "Biochemistry, Environmental Science, and Materials: The Four Great Tragedies" was frequently heard. In people's minds, graduates in chemistry, biology, materials, and related fields struggle to find jobs that match their majors. Even if they enter research, they may endure decades of hard work without necessarily achieving significant results.

Until recent years, things have changed — on one hand, the internet boom has gradually faded, and layoffs have become more severe; on the other hand, with the rise of emerging industries such as new energy, environmental technology, new materials, and biotechnology, the demand for STEM talent has surged, and formerly overlooked disciplines have started to become the main force in hardcore technology entrepreneurship.

Taking the new energy industry, which has the most intense talent competition in the venture capital circle, as an example. Data from the third-party job search engine Zhiyouji shows that new energy has become an important employment direction for students majoring in "biochemistry, environmental science, and materials." Some specialized fields such as biology, environmental science, chemistry, and materials are among the most sought-after majors in recruitment.

At the same time, ZhiLian data shows that salaries in the new energy industry steadily increased throughout 2023, with average monthly salaries for positions such as power electronics R&D and battery engineers exceeding 20,000 yuan. On the other hand, the semiconductor and integrated circuit industries ranked first in year-on-year salary growth in the first quarter. Most of their popular positions are related to electrochemistry and materials science.

Even VC/PE firms are scrambling for "niche" professional talents. Over the past year, top investment institutions such as IDG, Shenzhen Capital Group, and Fortune Venture Capital have released job postings, almost all targeting Ph.D.s in science and engineering, with “annual salaries starting at 800,000 yuan.” A newly established VC firm stated that 80% of its team members have a background in science and engineering, with majors like chemistry, materials science, and biotechnology being particularly in demand.

Ultimately, this is a true reflection of the current hard-tech entrepreneurial wave and also a glimpse of the changing times in the industry.

As one VC partner put it, "Most of the founders nowadays are scientists or professors by background. If investors don’t understand the technology, it’s hard to keep the conversation going." Therefore, having a professional background has become the most basic threshold, leaving a large number of non-technical-background investors in an awkward situation of "not understanding, not finding, and not being able to invest."

At the same time, we also see a group of founders from "pitfall majors" stepping onto the venture capital stage; research achievements that were once buried in labs are now coming out, and many entrepreneurial teams show distinct university backgrounds.

For example, Central South University has become the "Yellow Crane Military Academy of Power Batteries" by virtue of its niche disciplines such as metallurgy, mining, and materials; there are also the "Seven Sons of National Defense," including Northwestern Polytechnical University, Harbin Institute of Technology, and Beihang University, which have nurtured many entrepreneurs in hardcore fields like aviation, aerospace, and robotics.

This is a far-reaching change. Only when these "niche" majors start to receive substantial financial rewards can they attract more students to continuously join and devote themselves to the research of fundamental sciences. It must be understood that these basic disciplines are the source of the entire scientific and technological innovation system, and even the "master switch" of technology, determining the depth and breadth of a nation's innovation system.

Perhaps, this is just the beginning.

This article is sourced from Pedaily, authored by Yue Xiaoxiao, original text: https://news.pedaily.cn/202401/528521.shtml