Hongyun Biotech Secures RMB 100 Million Series B Financing to Advance Next-Gen EGFR Inhibitor into Clinical Trials and Target the Billion-Dollar Lung Cancer Market

VCBeat (WeChat: vcbeat) has exclusively learned that Nanjing RedCloudBio Co., Ltd. (abbreviated as RedCloudBio) announced the completion of a RMB 100 million Series B financing round. The round was led by CoWin Ventures, with Kaitai Capital participating as a co-investor, while existing shareholders Sherpa Healthcare Partners, Dayou Capital, and Dynamic Balance Investment made additional investments.

This round of financing will primarily be used to advance the development of clinical pipeline projects for next-generation EGFR inhibitors in China and the United States; and to expand the technology platform centered on structural pharmacology, supplemented by AI-driven ultra-high-throughput virtual screening and molecular dynamics simulations.

Previously, RedCloudBio completed two rounds of financing: an angel round of tens of millions of RMB in July 2018, led by Sherpa and co-invested by Dynamic Balance Investment; and a Series A round of tens of millions of RMB in November 2019, led by Dayou Capital and co-invested by Sherpa.

RedCloudBio, established in 2018, is an innovative drug research and development company based on structural pharmacology.One of the company's founders is Professor Yunhong Cai, who previously served as a Research Scientist at the Dana-Farber Cancer Institute and has extensive experience in structural biology, structural pharmacology, and precision drug design. Additionally,The founding team also comprises experts with extensive experience in synthetic optimization and systematic screening, whose collaborative efforts have established a mature structural pharmacology platform for new drug discovery and development.

Since the development of cryo-electron microscopy (cryo-EM) technology, structural biology has witnessed unprecedented progress, enabling researchers to image proteins at the atomic level and achieve a more precise "capture" of highly "flexible" target proteins. Drug discovery and developmentWhile existing CADD tools are widely known, it is broadly recognized within the industry that they suffer from significant inaccuracies and fail to accurately capture the structural interactions between proteins and small molecules. In practical drug discovery and development, workflows still heavily rely on the empirical expertise of chemists.

RedCloudBio leverages structural pharmacology as its core technology. Building upon experimentally determined complex structures, it employs algorithms for iterative optimization. Following each optimization cycle, structural validation is conducted to calibrate the algorithmic model, enabling further refinement—this continuous, reciprocal interaction between the structural pharmacology platform and the algorithmic platform persists until the PCC design is finalized.New Drug Research and Development Based on Structural BiologyWhether overseas or domestically, it remains a high-barrier sector worthy of capital deployment and exploration,can significantly improve the efficiency and success rate of new drug research and development.

RedCloudBio's core project, a next-generation EGFR inhibitor developed based on its structural pharmacology platform, is currently in the development stage and is expected to submit an IND application by the end of the year.Next-generation EGFR inhibitors are indicated for non-small cell lung cancer (NSCLC). Globally, lung cancer ranks first in both incidence and mortality among all malignancies. It is primarily classified into small cell lung cancer (SCLC) and NSCLC, with NSCLC accounting for approximately 80% of cases, and 50% of NSCLC patients harbor EGFR mutations.

RedCloudBio's next-generation EGFR inhibitor employs a unique mechanistic design, overcoming the longstanding challenge previously encountered in target development of balancing target potency and selectivity, and achieves efficacy against EGFR mutations including osimertinib-resistant, second-generation, and first-generation mutations, namely:This drug not only addresses the needs of drug-resistant patients, but as a next-generation EGFR inhibitor, it also holds vast market potential for first-line treatment in patients without resistance.

In addition to the next-generation EGFR inhibitor, RedCloudBio's key pipeline programs also include a highly selective HPK1 inhibitor and several other immuno-oncology targets, which are planned to sequentially enter IND-enabling development next year.

Looking ahead, RedCloudBio will continue to center its development on structural pharmacology, complemented by a technology platform leveraging AI-driven ultra-high-throughput virtual screening and molecular dynamics. Through this integrated approach, the company will develop innovative drugs targeting novel therapeutic targets and advance clinical research and collaborations.

CoWin Ventures stated:“RedCloudBio aligns with CoWin Ventures’ investment thesis. First, we believe that China has entered the era of innovative drugs, offering us the opportunity to develop globally leading drug discovery platforms and products domestically. For structure-based drug development, determining the structure is merely the first step; the ultimate solution still requires a ‘fine-tuned’ design for structural optimization. RedCloudBio’s existing pipeline has already demonstrated this critical capability.”

Secondly, among the four founders of RedCloudBio, three have collaborated at Harvard for over a decade, enabling them to communicate efficiently and collaborate seamlessly. Consequently, the team has gained a profound understanding of drug resistance mechanisms, as well as the 'hard skills' required for the structural elucidation of protein-drug complexes. This core know-how in structural pharmacology enables RedCloudBio to leverage its most distinctive advantages in 'kinases', 'selectivity', and 'drug resistance'.

Most importantly, what we value is their future potential,Leveraging its structural biology platform and computational chemistry capabilities, RedCloudBio is building an ultra-high-throughput virtual drug screening platform to accelerate drug R&D iterations and expand its pipeline with more first-in-class candidates., has the potential to become a rising star in the global innovative drug sector.

Following the completion of this financing round, we will strategically deploy our corporate resources to provide targeted solutions tailored to RedCloudBio's needs at various stages. In the near term, we may assist RedCloudBio in areas such as translational medicine, clinical trials, business development (BD), and fundraising.”

CoWin Ventures is a dual-currency (RMB and USD) venture capital firm specializing in early-stage technology enterprises. It has established a globally leading ecosystem centered on precision therapy-focused innovative drugs, encompassing a broad portfolio of precision diagnostics companies represented by Thrive, Zhenhe Bio, and Cytek; comprehensive translational medicine and clinical trial platforms represented by Taimei MedTech and Andu Biotech; and post-marketing commercialization management platforms such as Ruansu. Over the past two decades, CoWin has consistently upheld the philosophy of "serving as an external partner to founding teams," accumulating extensive experience in supporting portfolio companies across development strategies, team building, fundraising, R&D, manufacturing scale-up, and business partnerships.

Kaitai Capital, founded in 2009, primarily focuses on investments in biopharmaceuticals and life sciences, artificial intelligence and digital technology, and social innovation and consumer technology. The firm remains steadfast in addressing unmet clinical needs and strategically invests across the life sciences and broader healthcare ecosystem.

Currently, within the life sciences and healthcare sector, Kaitai Capital’s investment portfolio spans oncology, metabolic diseases, cardiovascular diseases, anti-infectives, autoimmune diseases, neuroscience, dermatology, and respiratory diseases, with over 80 portfolio companies invested in to date. Kaitai Capital not only focuses on identifying corporate value but also places equal emphasis on delivering a comprehensive suite of value-added services to its portfolio companies, including sustained financial support, resource integration, talent matchmaking, and post-investment management. Looking ahead, Kaitai Capital will continue to stand alongside its portfolio companies, steadfastly supporting their value creation initiatives and contributing to the industrial upgrading of China’s life sciences and healthcare sector.

Sherpa was founded in 2018. Its founders previously worked together at a renowned venture capital firm in China, where they established and led the healthcare investment team in 2011, overseeing healthcare investments and managing dedicated healthcare funds. United in purpose and resilient through challenges, the Sherpa team has forged ahead to become an influential venture capital firm in China’s healthcare sector, having backed numerous industry-leading companies across key tracks including life sciences, pharmaceuticals, medical devices & diagnostics, and healthcare services. Forged over a decade—from 2011 to 2021, refined through four fund vintages and over 120 healthcare investments—we are honored to have partnered with and grown alongside numerous outstanding entrepreneurs.

Qingdao Dayou Private Equity Fund Management Co., Ltd. specializes in early-stage venture capital investment in the ICT and healthcare industries. It currently manages 11 venture capital funds, with multiple portfolio companies already publicly listed or in the process of filing for listing. The core healthcare investment team at Dayou Capital boasts extensive professional backgrounds from leading medical device and pharmaceutical enterprises. The firm adheres to an investment strategy centered on the synergy between in vitro diagnostics (IVD) and pharmaceutical therapeutics, as well as shared technology platforms across vertical segments of the industry chain, and has invested in numerous prominent industry players. Addressing the divergence and synergy among healthcare sub-sectors and the severe market information asymmetry, Dayou Capital conducts in-depth post-investment management, steadfastly accompanying its portfolio companies in their continuous growth and development.

Dynamic Balance Capital currently manages multiple government fund-of-funds, the Chinese Academy of Sciences Technology Transfer Fund, venture capital funds, and industrial funds, spanning angel, VC, and PE stages. Consistently adhering to its original mission of "making the valuable even more valuable," the firm maintains a high standard of professionalism and has built a "scientist + entrepreneur" investment team. It focuses on early-stage investments in biomedicine, high-end manufacturing, energy and environmental protection, and TMT. To date, Dynamic Balance Capital has provided over 100 entrepreneurial teams and early-stage projects with multi-dimensional support encompassing venture capital, policy resources, technology, and management, successfully assisting companies such as Quanfeng Automobile, Wanders, CosmoChem, and Mituo Instrument in listing on capital markets. Additionally, it assists multiple local governments in cultivating an industrial ecosystem centered on a "Fund + Investment Promotion + Services" model.

BFC Group comprises members with multidisciplinary backgrounds in healthcare, finance, and management. Specializing in M&A, patent licensing, and financing within the healthcare sector, its business operations span China, the United States, and Europe. The firm has partnered with and maintains strong relationships with numerous leading domestic and international healthcare companies. BFC Group served as the exclusive financial advisor for this financing round.