Dialogue with Panlin Capital's Li Yuhui: The "Trumpet Mouth" of Industry and Capital Continues, Marking a Key Year for Patient Realization

With the start of the Renwu New Year, China's medical venture capital sector is entering a new phase characterized by both rationality and confidence after undergoing a "value baptism."

Looking back at 2025, the market exhibited a dual-track characteristic: on one side, cutting-edge fields repeatedly set new records in international licensing and IPO markets, with transaction activity surpassing expectations; on the other side, capital became increasingly stringent in project selection, showing a significant "structural divergence," favoring only companies with genuine "hard technology" and clear clinical value. This seemingly contradictory phenomenon precisely reflects the dynamic narrowing of the "megaphone effect" between intrinsic industry development logic and capital market cycles — industrial innovation continues to rise, driven by aging population demands, technological breakthroughs, and talent returning, while capital, after experiencing the hype, is swiftly reverting to professionalism and rationality.

At this critical transition point, the industry is undergoing a profound iteration from "investing in single products" to "investing in systems." The layout of investment institutions is no longer limited to popular single products but is instead building an ecological matrix covering multiple fields along the two main axes of "demand-driven" and "technical feasibility." At the same time, the "going global" narrative is also upgrading, moving from product licensing to deeper technology platform cooperation and standard output. Supporting all of this is the institutions' practice of "patient capital" and their unique cognitive ability at the early stage.

At the new starting point of the resonance between the industry and capital, what trends are defining the future? How is the investment methodology evolving? How will the value of long-termism be realized? With these questions in mind, VCBeat spoke with Li Yuhui, the proposer of the "Bell Mouth Theory" and founding managing partner of Panlin Capital, to review the key changes of 2025 and look ahead to the investment blueprint and ecosystem construction path for 2026.

VCBeat:The "Bell Mouth Theory" you proposed at the end of 2022 suggests that the contrast between the upward trend in the industry and the downward trend in capital forms an investment window. Has the development trend of the healthcare industry in 2025 validated your judgment? Is this window period still present?

Li Yuhui:The market performance in 2025 did indeed validate this judgment to a large extent. However, to further understand this "widening gap," it is necessary to break down several dimensions.

First, the capital market itself has cycles. Whether it's NASDAQ or Hong Kong stocks, the biotech sector entered an adjustment period after experiencing highs around 2020, reaching a low point in 2022-2023. This is inherently a market rule.

At the same time, China's innovative drug industry is developing steadily. The driving force behind this is clear: China is accelerating into a deeply aging society, generating a large number of unmet clinical needs that must be addressed through innovative drugs and innovative medical devices.

The policy support from the state in review and approval, as well as payment mechanisms, coupled with the return of a large number of top overseas Chinese scientists to start businesses in China, has brought advanced technology and experience. The mature CRO/CDMO industry chain within China, along with abundant clinical resources, together form a rich ecosystem that spans from academia to industry and then to policy.

The industry was very hot, but at the time, the capital market was cooling down. As a result, on the one hand, we saw a lot of exciting data and poster presentations at industry conferences, while on the other hand, many non-professional funds withdrew from the market, making it extremely difficult for many excellent Biotech companies to raise financing.

This "flare" was most evident in 2022-2023. At that time, many peers asked me: "Yu Hui, are you still investing in innovative drugs?" My answer was: "Why not? This is precisely the best time."

When the hype fades and only professional players remain, truly innovative and promising projects will emerge, and valuations will return to rational levels. This is precisely our opportunity to "select the best from the best."

As for the present, the "bell-shaped curve" is narrowing but still exists. The momentum of the industry remains strong, and capital is accelerating to catch up with this understanding. According to the capital cycle rule, this upward process may continue for another 3-5 years.

VCBeat:How do you view the evolution of investment logic from "single-point positioning" to "ecological layout"? In 2025, how will this thinking be newly reflected in project screening?

Li Yuhui:Taking Panlin as an example, our layout evolves with the technological wave, which itself reflects the deepening of our understanding of industrial development. It is not simply about expanding into new fields but rather making judgments based on two core axes: "demand-driven" and "technical feasibility."

We always focus on areas with significant clinical needs such as oncology, cardiovascular and cerebrovascular diseases, and metabolic disorders. As our understanding of autoimmune and central nervous system diseases deepens, we have also made them a priority. On the technology front, we keep track of every iteration from small molecules and large molecules to nucleic acid drugs and cell and gene therapies.

This "ecological" mindset is reflected in the 2025 project selection as placing greater emphasis on differentiation and platform value. For instance, in the ADC field, we focus on next-generation technologies that address current pain points such as dual targets, novel payloads, and drug resistance.

We prefer to invest in "the first round of institutional financing," when a scientist's entrepreneurial idea begins to take shape. Based on their deep academic understanding and industry experience, they attempt to develop new drugs using a novel biotechnology. At this stage, we focus on evaluating whether their technology platform can evolve into a series of pipelines and verifying its industrial feasibility.

VCBeat:2025In the year, what are the key advancements in emerging fields such as AI + healthcare and upstream core components, from "technical feasibility" to "product usability"?

Li Yuhui:We view the application of AI in the medical field as layered. In core aspects of AI pharmaceuticals, such as target discovery and molecular design, we believe it is still in the process of evolution, and we maintain a cautious and observant stance.

But we are actively deploying in the field of AI combined with medical devices and medical services. For example, the Benyao Technology we invested in focuses on laboratory automation, Thorough Imaging specializes in AI pathology diagnosis, and Thiscovery Medical develops microscopic surgical robots. The key progress in these areas is that they have transformed from tools for improving efficiency into indispensable components of clinical decision-making or treatment processes, and have started to generate high-quality clinical validation data.

VCBeat:2025The performance of IPOs in the medical and health sector has been strong this year, with some industry insiders referring to it as "the year of revival for innovative drugs" or "the year of recovery." However, at the same time, the industry is experiencing significant breakouts and divergence. How do you assess the IPO trend in the medical field for 2026?

Li Yuhui:Structural differentiation is a prominent characteristic at present. Market funds are flowing towards enterprises with genuine "hard technology" and clear clinical value, while companies with insufficient innovation or poor progress are facing a harsher reality.

This places higher demands on early-stage investment institutions, which must"Sufficiently 'hard' in both 'scientific cognition' and 'technological application'"Our strategy is to focus on "proven targets" combined with the "application of new biotechnologies" to build differentiation.

Early investments, even if they encounter a decline later, usually still have profit potential because the entry valuation may have been low. An IPO primarily adds an important exit channel, rather than being the only one. For early investors, different stages of a company’s development correspond to different methods of value realization.

VCBeat:Apart from IPOs, do investment institutions encourage their invested companies to exit through cross-border licensing, mergers and acquisitions integration, etc.? In 2026, will industrial M&A become a more mainstream path?

Li Yuhui:A technology platform company does not necessarily have to grow into a large pharmaceutical enterprise. If the founder's ambition lies in research and development, then at the appropriate time when its technology or pipeline has been validated, opting for licensing, selling the pipeline, or even the entire company can be a better choice.

The火爆 of BD deals in 2025 has already proven that this is not only feasible but also capable of creating enormous value. Regarding industry mergers and acquisitions, I believe this trend is gaining momentum. On one hand, not all Biotech companies can secure smooth financing or reach an IPO; on the other hand, large pharmaceutical enterprises—whether multinational corporations (MNCs) or domestic traditional pharmaceutical companies undergoing transformation—all have a strong demand to bolster their pipelines.

We have seen that the industry is very positive about this and is in contact with some of our invested companies. Although it has not yet reached the "especially hot" state, it is expected that by 2026, mergers and acquisitions, as a means of exit and industry consolidation, will become increasingly important.

VCBeat:After experiencing cyclical fluctuations, do you think the valuation of current medical projects has returned to rationality? In 2026, what adjustments might occur in the valuation methodologies for early-stage technology projects?

Li Yuhui:Currently, the valuation of projects in the primary market is certainly much more rational than the peak levels seen in 2020-2021. However, for truly scarce high-quality projects, competition remains intense.

It should be noted that the valuation methodology is continuous and in-depth, and becomes "more thorough as it progresses" during the cycle. It is not a simple formula, but a three-dimensional evaluation process——

Technology and Products First:In-depth research into the advancement of technology and the possibility of industrialization, with a preference for projects in the U.S. with clinical-stage comparables, which validates the feasibility of the technology and pathway.

Strong clinical demand:The selected indications are often areas with clear clinical pain points and urgent needs, which can support the rapid advancement of research and commercialization.

Founder Entrepreneur Traits:This is one of the core aspects of early-stage investment. Namely, investment firms not only evaluate the scientific background but also assess the overall qualities such as the organizational team, business thinking, and financing capabilities through interaction and observation.

Early investment is a "value discovery" process, and when all key positions in a company are filled, it enters the later stage of "value confirmation," with a different valuation logic.

VCBeat:Will small nucleic acids explode in 2025, and will they move from the "technical validation period" to the "commercial realization period" in 2026? Besides CGT and AI pharmaceuticals, what other potential tracks is Panlin Capital focusing on?

Li Yuhui:The small nucleic acid field is entering a critical phase of transitioning from technological breakthroughs to commercialization and the expansion of indications. Products like Inclisiran have already demonstrated commercial potential in the chronic disease space. The next key developments to watch are: first, whether more products will see increased sales in large markets such as cardiovascular and metabolic diseases; second, whether new targets like INHBE (weight loss and muscle gain) can open up entirely new therapeutic areas.

Regarding Potential Tracks,Our principle of layout remains unchanged: it must be based on solid scientific understanding and clear clinical needs.

VCBeat:On the basis of "product exports," how should Chinese medical field enterprises advance towards "technology exports" and "standard exports" by 2026? How can investment institutions help enterprises enhance their global competitiveness in post-investment?

Li Yuhui:The forms of going global are rapidly evolving. From the earliest License-out, to now directly purchasing pipelines, establishing new overseas companies, and even entire technology platform collaborations.

Moving Towards "Technology Export" and "Standard Export", the Core Lies in EnterprisesWhether it has an international core. This requires the founder or core team to have a global vision and industry resources, or to introduce top talents with international BD, clinical, and registration experience during development.

As financial investors, although we cannot provide full-chain industrial empowerment like CVCs, we will fully assist companies in terms of cognition and resource alignment. Many of the founders we invest in come from the industry itself, or we introduce key talents to them through our ecosystem network. These are crucial aspects for enhancing their global competitiveness.

VCBeat:How do investment institutions practice "patience" in terms of fund duration and post-investment support? How to manage LP expectations when facing long-cycle tracks like CGT and AI-driven drug discovery?

Li Yuhui:The research and development of biopharmaceuticals itself has a long cycle of 8-10 years, which requires investment institutions to be "long-term believers." Specifically, "patience" is reflected in the following aspects.

First is"Early Awareness, Multiple Rounds of Investment"The model. Take Panlin as an example. We dare to place bets at a very early stage based on in-depth research. Once a company proves itself, we will continue to support it through multiple rounds, accompanying it through cycles. This is not only support for the company but also establishes a safety net and profit margin for the fund through early low-valuation investments.

Second, with LP'sIn-depth Communication and Expectation Management, which allows LPs to fully understand the nature and cycle of biopharmaceutical investments. At the same time, the current activity of BD and the smooth IPO channel provide the possibility for mid-term value realization in long-cycle investments, giving both us and the LPs more confidence to pursue "patient" endeavors.

VCBeat:Currently, Panlin Capital not only invests in projects but also initiates specialized funds targeting niche sectors and builds an "R&D, production, sales" ecosystem. What is the core purpose of such an ecological layout? Has a replicable synergy model been formed yet?

Li Yuhui:We have set up a CGT fund in cooperation with local state-owned assets in Chengdu based on several considerations. First, CGT is a next-generation platform technology direction that we have identified, with urgent clinical needs, and we already have our own layout and understanding.

Secondly, Chengdu has a strong determination to develop biomedicine, especially CGT, and has a favorable industrial foundation. This special fund allows us to focus more and delve deeper into this field.

Currently, this fund is investing at a rapid pace and has already laid out multiple gene therapy and cell therapy projects. The so-called "ecosystem" refers to the natural aggregation and interaction of technologies, talents, enterprises, and clinical resources around CGT during this process. It is more like a result that naturally grows alongside the deep cultivation of the industry. It has not yet reached the stage of summarizing a "model," but we are seeing a promising start.

VCBeat:In the face of cutting-edge technology intersections, should investment institutions focus more on the integration of "industry + science" backgrounds when building teams? How to maintain sensitivity to early-stage technologies?

Li Yuhui:The construction of the team's core capabilities needs to meet simultaneouslyA strong scientific background, extensive industry experience, and professional investment insight.

Taking Panlin as an example, our team consists of several PhDs from the fields of biology, chemistry, pharmacy, and clinical medicine. Some of them have conducted cutting-edge academic research, while others have been responsible for R&D or BD in pharmaceutical companies. When faced with entirely new technological fields, they first demonstrate a strong interest and dedication to research, which forms the foundation for successful investment.

The key to maintaining acuity lies in the "meticulous unraveling" analytical mechanism we have established internally. Every week, we hold in-depth project discussions, asking very detailed questions. From the principles of a technology, animal experimental data, to its integration with clinical protocols, as well as the founder's organizational and financing capabilities, we conduct a multi-dimensional review and debate. This process forces the team to continuously learn and cross-validate, thereby forming a robust commercial judgment that goes beyond a purely technical perspective.

VCBeat:As a steadfast believer in early-stage technology investment, what do you think is the most crucial keyword for instilling confidence in healthcare investment by 2026? For entrepreneurs and peers, what is the most worthwhile principle to uphold?

Li Yuhui:If I were to convey one word to the market, I would say "conviction."

For scientist entrepreneurs, please adhere to two beliefs: the初心 of creating a good drug to benefit humanity; and the理想 of turning scientific discoveries into a great enterprise. This path is long, but it is worth persisting.

To my fellow investors, I also want to share a belief: believe in the future of China's innovative drugs, and believe in the power of professionalism and long-term thinking. In investing,Especially early-stage investment, which is not only about "adding flowers to brocade" during prosperous times but also about "offering charcoal in the snow" when it is needed.

When you can truly understand and support the ideals of entrepreneurs, accompany them through the troughs, you will eventually gain not only financial returns but also a great sense of accomplishment in advancing technological progress and addressing clinical needs. This should be a responsibility for all of us venture capital investors.

The 10th Future Healthcare 100 Summit 2026 will kick off in Shanghai from May 19th to 21st. This year’s conference focuses on the core of China's innovative healthcare assets, bringing together over 8,000 industry and capital elites to explore the entire industrial ecosystem in fields such as digital healthcare, innovative medical devices, and novel drugs, creating diverse connections to activate global value. Meanwhile, the Future Healthcare 100 Awards 2026 has been fully upgraded, with submission channels now open. We sincerely invite you to join the list, attend the grand event, and explore opportunities for healthcare innovation together!

As the core circle of friends for the conference and list selection, Panlin Capital will also provide full support for this grand event.

 Scan the code to register for the "Top 100 Healthcare Companies of the Future 2026" conference,Enjoy Early Bird Discounts

Scan the code to enter the "2026 Future Healthcare 100 Strong" award application channel