Breaking into a $10B Blue Ocean: How Oli Bio Built a Rare CDMO for Small Nucleic Acid Drugs

As more and more companies enter the market, China's CDMO sector is gaining momentum and entering a period of vigorous development. However, behind this, how to break away from the fiercely competitive red ocean market and shift towards a more promising blue ocean market has become a question worth pondering.

Suzhou Olipharma Technology Co., Ltd. has its own ideas and layout on this issue. They are targeting the small nucleic acid drug track, committed to providing global pharmaceutical companies with "one-stop" CDMO services for the discovery, process development, CMC services, API production, and drug registration of small nucleic acid drugs, facilitating the smooth progress of partner projects.

Small nucleic acid drugs belong to an emerging field and are currently in the early stages of commercialization, with broad development potential. As indications and patient populations continue to expand, the global market size for small nucleic acid drugs is expected to exceed 10 billion US dollars by 2025 and maintain rapid growth over the next two decades. This presents development opportunities for small nucleic acid drug CDMO companies.

As a startup CDMO company in the small nucleic acid赛道, what competition and challenges does Olipharma face? And how will it build its own development system in an unexplored field? VCBeat New Medicine interviewed Mr. Hai Zhao, the founder of Suzhou Olipharma Technology Co., Ltd.

Before founding Olipharma,CEOHai Zhao has been deeply engaged in the small nucleic acid drug field for over a decade. It is during these ten-plus years that China's small nucleic acid drug industry has evolved from nothing, experienced twists and turns, and ultimately developed into an innovative track leading the third wave of new drug research and development. Hai Zhao’s understanding of the small nucleic acid drug industry has also become increasingly profound.

Hai Zhao once led the establishment of China's first small nucleic acid drug production technology platform and GMP system construction, and presided over the completion of multiple projects involving small nucleic acid drugs from R&D to GMP production. At the time when he explored and led the construction of these technical platforms, small nucleic acid drugs were still a very niche field in China. Back then, there was no consensus within the industry on whether small nucleic acid drugs should be classified as chemical drugs or biologics, which created numerous obstacles for the platform’s development. After much effort, the drug regulatory authorities eventually classified them as chemical drugs, providing Zhao Hai and his team with a reference standard.

After years of hard work and exploration, Zhao Hai led his team to develop a set of internationally recognized processes and systems for platform construction, eventually completing the platform. This set of processes and systems has also become a reference model for companies that later entered the small nucleic acid drug track.

Currently, the number of small nucleic acid drugs approved for marketing worldwide has reached 14, and the small nucleic acid drug industry has entered a fully commercialized era. However, there are only a few companies in the entire market capable of undertaking CDMO services for small nucleic acid drugs.Hai Zhao saw the blue ocean market in the small nucleic acid drug CDMO track. In August 2021, Olipharma, which focuses on providing small nucleic acid drug CDMO services to pharmaceutical companies worldwide, was officially established.

The establishment of Olipharma also drew the attention of investors. Shortly after its founding, Matrix Partners approached them proactively. "Matrix Partners reached out to us when we had nothing. They valued the industry experience our entire team had accumulated in the small nucleic acid drug field and hoped to help drive the company forward," recalled Zhao Hai.

The accumulation of the team plus the support of capital has laid a solid foundation for the development of Olipharma.

2021From the year to today, Olipharma's development has exceeded the expectations of both its founding team and investors. At the time of its establishment, Zhao Hai hoped that Olipharma would first build up a certain amount of production capacity in the short term, secure some orders, and establish a foothold within the industry. Now, not only has Olipharma quickly achieved its set goals, but it has also gained a certain level of recognition within the industry.

The technical team at Olipharma has accumulated years of experience in the industry. Most of them have not only been involved in the development of small nucleic acid drugs but also participated in external services, which makes the Olipharma team possess both professional technical expertise and a strong sense of service.

With an innate sensitivity to industry trends and customer needs, Olipharma has been improving its services in a targeted manner across various business segments: Nucleic acid drug companies have strict requirements for process development and compliance. Olipharma helps clients enhance R&D efficiency rapidly by providing professional and compliant CDMO services; Vaccine companies typically demand higher capacity construction and cost control. Olipharma actively expands its production capacity while strictly controlling costs to help clients reduce costs and increase efficiency; The IVD industry has higher requirements for delivery cycles. Olipharma addresses this by improving production efficiency to meet the needs of urgent orders.

It is precisely because Olipharma can fully leverage its years of industry experience, consider from the customer's perspective, and respond quickly, flexibly, and efficiently to customers' high-standard demands that partners choose to continuously repurchase their services. In just half a year, Olipharma's revenue has broken through the 10-million-yuan mark, with a wealth of orders in hand.

For CDMO companies, capacity and cost issues are of great concern to customers. In terms of capacity layout, given the rapid development of the industry, Olipharma has added a 100-kilogram GMP production line on the basis of the existing 10-kilogram production line, which can meet the CDMO needs of pharmaceutical companies from IND to Phase II clinical trials; in the future, Olipharma will also build a 1000-kilogram production line to undertake various CMO businesses.

In terms of cost control, due to the dual advantages of having long-term partners and R&D experience that aligns with international standards, Olipharma's costs can be significantly reduced compared to its peers, demonstrating a clear cost advantage.

In addition to focusing on process development and cost reduction, Olipharma also values external collaborations.Currently, Olipharma has reached a deep collaboration with Cytiva to jointly build a global nucleic acid solid-phase synthesis equipment demonstration platform.Cytiva's mainstream products in the nucleic acid drug research and development sector basically occupy over 90% of the market share in China. Collaborating with Cytiva, Zhao Hai considers it a win-win situation: on one hand, Cytiva will showcase their latest equipment platforms to the public, making it convenient for customers to try them out; on the other hand, Olipharma can enhance its corporate influence by providing technical training to pharmaceutical companies while also driving business growth.

Currently, Olipharma has entered the fast lane of enterprise development. With strong competitiveness,CDMOBased on the platform, the company has also actively laid outCROBusiness Sector. Zhao Hai mentioned,CROThe expansion of the business is mainly based on two considerations: First, during business negotiations, they found that many customers hope Olipharma could provideCRO+CDMOThe full set of R&D and production services, which can quickly deliver experimental results and improve R&D efficiency; secondly, Olipharma should not only be limited toCDMOBusiness, but with the ability to extend forward, forming a complete drug research and development and production system, so as to better provide customers with comprehensive services.

It is reported that the company's CRO team is also led by a veteran with ten years of experience in small nucleic acid drug research and development, providing services such as sequence design and screening, RNAi transfection and optimization, RNAi interference effect detection, and pharmacokinetic/pharmacodynamic (PK/PD) studies.The addition of the CRO sector enables Olipharma to become one of the few "one-stop" small nucleic acid drug CRDMO service providers in the market that can simultaneously offer "design + synthesis + evaluation."

For future development, Zhao Hai highly values how to build up Olipharma's competitive barriers. The production of small nucleic acid active pharmaceutical ingredients (APIs) utilizes solid-phase synthesis technology, which presents significant technical barriers in process development, quality control, and impurity research. In terms of the current development status, CMC remains a bottleneck in the small nucleic acid drug industry.

Currently, Olipharma is building a mature system to address two major challenges: the quality control of impurity profiles in solid-phase nucleic acid synthesis and the process development for achieving impurity profile control, thereby creating the company's core competitiveness and moat.

Moreover, restricted by the relatively short development time of the industry and the relative scarcity of talent, both the industry and enterprises face challenges. Olipharma adopts a "veterans mentoring rookies" approach to focus on cultivating reserve talents for the industry, meeting the needs of development.

Hai Zhao admitted: The development of a company cannot be separated from the development of its people, and the competition among companies is also the competition for talent. Olipharma welcomes partners who are interested in small nucleic acid drug development to join and work together to promote the development of the industry and embrace the arrival of an innovative wave.