Dialogue with Wang Xun, Chief of Huagai Healthcare Fund: Counter-intuitive Investment and the Human-centric Innovative Drug Track

From "Blow away all the sand to find the gold" to "Sun-facing flowers and trees easily welcome spring," 2025 marks a significant turning point in the innovation-driven pharmaceuticals sector.

By 2025, Huagai Capital's fund management scale will exceed 30 billion yuan; the number of portfolio companies going public will surpass 30; and the total amount of BD transactions by portfolio companies will exceed 20 billion US dollars.Looking back over the past decade, since the establishment of the first Zhejiang medical industry fund in 2014, Huagai Capital has formed a full-stage layout of medical investment from early stage, growth stage, PIPE, to S funds and mother funds, accompanying China's Biotech through technological explosion, overseas breakthroughs, and reaching the critical point of value realization.

At the advent of spring, VCBeat had a special dialogue with Wang Xun, Chief Investment Officer of Huagai Healthcare Fund, to discuss the heat of 2025 and the new changes in 2026.

VCBeat:What are the 1-3 key words that summarize the track trends you are most concerned about from 2025 to 2026?

Wang Xun:The biopharmaceutical track has shifted from being "bitterly cold" in 2023 and 2024 to becoming "unusually hot" in the second half of 2025.

VCBeat:Has the 2025 Hong Kong stock market "thaw" truly improved the exit environment? How does it impact Biotech development strategies?

Wang Xun:The answer is yes. In the past, for biopharmaceutical companies, institutions could not see a particularly clear exit channel, and the buyers did not know how to exit either, so the possibility of exiting through selling old shares or mergers and acquisitions was very small. After the recovery of Hong Kong stock IPOs, the industry saw the entire investment closed loop of biopharmaceuticals — the smooth channel of "investment-management-exit".

From the perspective of Biotech, the halt of Hong Kong stocks after 2021 actually promoted a significant increase in domestic biopharmaceutical BD transactions. In the "bone-chilling" financing and IPO environment, seeking large BD deals became one of the few ways to raise funds. Previously reluctant to sell, unwilling to sell, or failing to meet price expectations, companies have now turned to frequent sales for survival, which was described as "pinching the green shoots," implying that the best assets were being sold off. Although there were deviations in price and path from expectations,Objectively, it has paved the way for one of the few available overseas expansion options for China's biopharmaceutical enterprises, promoting the future globalization of assets.

Looking back over the past few years, this is a positive development: Chinese assets are gaining increasing global attention, attracting more multinational corporations (MNCs) to engage in deals within China. With the IPO loop re-established, there have been subtle shifts in business development (BD) activities — a significant overseas BD deal, particularly with a TOP20 MNC and an upfront payment ranging from $100 million to $200 million, can boost attention in the secondary market. This will be crucial for Biotech companies listing on the Hong Kong Stock Exchange, impacting aspects like issuance and cornerstone investments.IPOs will move towards differentiation and specialization in the future. Recognition will not come from engaging in BD for overseas markets or partnering with small companies, but rather from making deals with top global multinational pharmaceutical enterprises.

VCBeat:After the IPO channel is cleared, will MNCs and local leading companies adopt a more aggressive or more selective approach in their M&A strategies?

Wang Xun:Not ProfitableBiopharmaceutical companies have a very low possibility of mergers and acquisitions in the primary market. From the buyer's perspective, they can focus on core pipeline assets; proprietary platforms can also be based on BD collaborative R&D, followed by asset transactions later; there are also multiple options such as cornerstone investments, minority equity investments, and New Co. The core logic is...Costs are more economical, and transactions are more straightforward.Mergers and acquisitions mean taking on full responsibility for the company—employees, liabilities, culture, historical evolution, non-core assets, etc.

At this stage, MNCs continue to expand their BD teams in China, with the estimated number already doubling compared to three years ago. However, it is difficult for MNCs and domestic Big Pharma to significantly increase their acquisitions of Biotech companies, which will remain relatively high. After the IPO market improves, leading to an overall rise in market value and corporate valuations, biotech companies will instead pay more attention to who the BD buyers are and whether the deals are influential.

VCBeat:In the innovative drug track, will the underlying logic of valuation anchors and stock selection change?

Wang Xun:Huagai Capital's investment logic in the biopharmaceutical sector has not changed. Even in the coldest times,In China For GlobalIt is also a direction that Huagai continues to focus on. Especially for primary investors, the market is always changing. It is not about speculating on the sentiment of the secondary market, but about discovering drugs that are urgently needed in clinical settings and truly recognized by doctors and patients. No matter how the capital market changes, good products will always shine.

VCBeat:From "Life-Saving Drugs" to "Improved Healthcare," Which Clinical Needs Received Unexpected Capital Response in 2025?

Wang Xun:First,Anticancer DrugsOr is it the most important R&D direction now, accounting for 50%Or close to 50%. Secondly, it isWeight-loss drugs represented by GLP-1VCBeat has invested in a series of companies around long-term medication management, such as Zhibi Biotech with monthly formulations, Chengyi Biotech focusing on small molecules, Prosetta specializing in weight loss and muscle preservation, and AI-driven Dearray Therapeutics.As the demand becomes increasingly detailed, personalized, and humanized，There are many ways to play in a single track, but the key is whether it can solve unmet clinical needs. No matter how technology iterates, the ultimate goal is always to save lives, which is the certainty that transcends cycles.

VCBeat:Which hot tracks in 2025 will continue to be popular in 2026?

Wang Xun:ADCs are still exploring various combinations, and the long-acting and targeted nature of small nucleic acids offer broad room for imagination; the weight-loss sector, supported by a market worth tens of billions of dollars, has many unmet needs.

VCBeat:Is 2026 a peak or a trough?

Wang Xun:I can't answer. But for good pharmaceutical companies, the IPO closed-loop path in 2026 will still be smooth. The热度 of Hong Kong stocks will likely continue, though probably not as hot as in August and September 2025, and a new round of differentiation will emerge. A-share markets are expected to see a recovery. Overall, the booming innovative drug sector and smooth exit routes should continue.

VCBeat:What's the difference between investing in AI in 2026 and 2023? Which is more important, "technology platform" or "application implementation"?

Wang Xun:In 2018, when AI healthcare was just getting started, Huagai led the investment in Shukun Technology. At the same time, Huagai specifically established an AI + healthcare team to focus on the application of AI in the medical field.

The current reality is that as long as it involves AI + healthcare or AI pharmaceuticals, the valuation of startups tends to be extremely high. However, determining the premium on Biotech valuations brought by underlying technologies and platforms poses a challenge for professional biopharmaceutical investors, making them potentially more cautious and conservative.I understand that the view of most biopharmaceutical investors is: AI platforms require a very long validation cycle, but we can't afford to miss out.At the same time, many technology investors are betting on AI pharmaceuticals, and from a TMT perspective, they have more faith in the implementation of AI applications.

AI Medical Investment Is Still in the Phase of Searching for Application Scenarios — As a tool itself, what problems can you solve? Which specific sector or stage of problems are you addressing? This is highly detailed. Take drug development as an example: Is it about the cost of chemical synthesis, the success rate of pre-PCC experiments, R&D efficiency and progress, cardiac or hepatic toxicity validation, or patient screening and enrollment during clinical trials?

AI can do everything. But as a Biotech and platform tool itself, it can only operate in very niche fields, solve a very specific problem, and find the entry point for commercial application scenarios.Behind this set of logic for solving problems, there are many differentiated highlights that need to be constructed and polished, such as data sources, algorithms, machine learning, and so on. Of course, I am not an expert in this part, but as a pharmaceutical investor, I will think about the entire process of drug development to seek practical implementation paths.

Our primary concern is: what problem have you solved? Has the commercial closed-loop been achieved? Is there anyone willing to pay for your product/service? Who are the people paying for it?

VCBeat:Who Are the Current Paying Customers of AI-Driven Pharmaceutical Companies?

Wang Xun:Currently, the main buyers are MNCs and Big Pharmas both in and outside of China. The underlying logic is consistent, and no one wants to miss out on this direction.All MNCs highly recognize the use of AI in drug research and development, considering it a disruptive direction for the next decade. I think it will take time, and people will continue to try various new methods.

VCBeat:Will there be significant breakthroughs in terms of product implementation, regulation, or approval direction?

Wang Xun:Promotional measures should be continuously updated, but the final evaluation criteria for backend approvals such as product review and approval, medical insurance, hospital admission, etc., are... AI is not related, and there will be no fundamental breakthrough in the regulatory framework in the short term.AI is currently positioned as an "auxiliary tool" rather than a "decision-making entity," and will not change the ultimate review principles—core indicators such as clinical efficacy, diagnostic accuracy, and tool effectiveness remain hard standards.The market competitiveness of AI will depend onPracticality and Adaptability of the Tool Itself——Whether it can truly achieve cost reduction, efficiency enhancement, or other breakthrough optimizations.

VCBeat:What does "Refined Post-Investment Management" mean for today's startups?

Wang Xun:There is no standard answer to post-investment management; different enterprises require different, customized post-investment empowerment. The overall model within Huagai is "whoever invests manages." In my experience, talent is the core pain point for Biotech companies, especially when their pipelines move from early stages into the clinical phase—a critical battleground that often faces a shortage of clinical professionals and resources. Using our post-investment management experience to help address and strengthen these weak areas in a company is a crucial aspect of post-investment management.

From another perspective, Huagai Healthcare Fund has built a leading full-stage fund matrix in China, including early-stage funds (Angel Round to Series B), growth-stage funds (Series B to Pre-IPO), PIPE funds, and fund of funds. Starting from an idea, it covers the entire life cycle of biopharmaceutical enterprises and has established a sizable healthcare ecosystem and network, assisting Biotech companies in sharing resources and expertise.

VCBeat:"How does Huagai Balance the Long-term Patience of 'Patient Capital' with the Short-term DPI Pressure of Funds against the Backdrop of 'Difficult Fundraising'?"

Wang Xun:An interesting phenomenon is that it's hard to raise funds in bad years, but it’s actually a good opportunity; the performance of those funds often turns out to be the best. This is because when the market is hesitant, valuations are low, allowing investments at a very low point. When you find good targets and enter at a low valuation, grow together with the company, and navigate through cycles, a few years later, during the exit period, the returns will look impressive. In a booming market, raising funds is definitely easier, but then another issue arises: the valuation of investment targets also rises, and the entire competitive landscape changes rapidly.。After the investment is made, the market may change again, so I thinkInvestment is sometimes a counter-humanity job.

VCBeat:How Should Entrepreneurs Balance Between Chasing Trends and Upholding Long-term Value?

Wang Xun:IncludingIncluding biomedicine, every track has its ups and downs. Hot topics definitely need to be studied, and learning should be done as soon as possible so as not to miss new trends or opportunities. For investors, the final decision on whether or not to invest, or how to invest, and whether they can discover good targets, requires very calm consideration and thought – Does it really solve problems? Are the problems solved truly needed in clinical practice? How far is it from true industrialization? What is the risk stage? Where are the latest global developments? Is the valuation within a reasonable range?

For entrepreneurs, the first is that scientists shouldFocus on What You Are Good At, instead of blindly chasing big trends. Once a trend appears, everyone will rush to it. As a scientist, you need to ask yourself: do I have the ability to chase it based on my past scientific accumulation, industrial experience, and relevance to the field?

Second, entrepreneurs and scientists must haveA Peaceful MindsetFor example, do not overestimate your valuation. Have a reasonable increase and then know when to stop, and push the product forward as soon as possible. It’s possible that after a period of time, market changes or R&D issues may arise, and the high valuation set at the time might later become an obstacle for the next round of financing. In tough times, it is essential to hold your breath, find ways to raise funds, and keep the company alive.

Third,Proactive Reserve "Team Building" Capability——As the stage progresses, the demand for talent expands from early scientific research to clinical design, global development, and commercialization. The ability to build an execution-capable team is the core key. Similarly, the earlier Biotech establishes communication with MNCs, the sooner it can gain insights into pipeline stages, directions, and preferences for asset types, which in turn informs corporate strategy formulation and long-term development planning.

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, gathering over 8,000 industry and capital elites. It will concentrate on 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 2026 Future Healthcare 100 evaluation 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, Huagai Medical Fund will also provide full support for this grand event.

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