Fermion Therapeutics Secures Over RMB 100 Million in Series A Funding to Advance FermiNet AI Platform for Standardized PCC Delivery

VCBeat learned at the earliest opportunity,AI Drug Discovery Company Fermion Technology Recently Completed Over RMB 100 Million in Cumulative Series A Financing,Investors in this round include Panda Capital, Guangzhou Jinkong, and Cosun Capital. The team previously secured a Pre-A round led by Challenger Capital, with Panda Capital participating as a co-investor. The funds raised will be primarily used for team expansion, further refinement of the company’s technical and data models, and increasing the number of collaborations within its product pipeline.

As a technology-driven, innovative small-molecule R&D enterprise, Fermion deeply integrates multidisciplinary fields—including biology, medicinal chemistry, and computer science—by applying artificial intelligence technologies such as deep learning, reinforcement learning, generative adversarial networks, big data, and knowledge graphs to new drug development. The company aims to significantly enhance the efficiency and success rate of the entire drug discovery process, push the boundaries of pharmaceutical R&D, and provide more and better therapeutic options for diseases.

Through the FermiNet small-molecule R&D platform based on deep learning,Fermion covers the entire process from target selection to preclinical candidate (PCC) development. From target identification to the PCC stage, Fermion can save 1–2 years compared to traditional pharmaceutical companies, significantly enhancing R&D efficiency; in certain optimization steps, efficiency is improved by more than 10-fold over conventional methods.

Currently, the global "AI + New Drug R&D" sector is in a phase of rapid growth, with the AI-driven new drug development boom flourishing not only abroad but also in China.

In recent years, as the Chinese government has continuously introduced relevant policies, the operational space for generic drug manufacturers has been squeezed, compelling numerous domestic pharmaceutical companies to pivot toward innovation. However, the long development cycles, low success rates, and high R&D costs associated with new drugs remain significant obstacles that many pharmaceutical enterprises struggle to overcome.

Artificial intelligence technologies, represented by deep learning, can accelerate pharmaceutical R&D and improve the success rate of drug development by virtue of their powerful capabilities in discovering relationships and performing computations. This has led to an increasingly strong demand among pharmaceutical companies for leveraging AI in new drug development.

According to public data compiled by VCBeat, as of October 16, 2020, a total of 56 AI-driven new drug development companies worldwide had secured financing, with cumulative funding amounting to $4.581 billion.

Fermion Technology focuses on building an AI-assisted drug development platform for small-molecule chemical drugs. Through in-depth collaboration with CROs and originator pharmaceutical companies, it leverages AI technology to enhance the efficiency and success rate of preclinical R&D for new small-molecule drugs.

By integrating compound activity data, Fermion’s AI-driven R&D engine can automatically generate small molecules with physicochemical properties similar to those of existing active compounds against known targets, achieving over 50% coverage of real-world libraries. Meanwhile, it generates a greater number of novel, patentable compounds and diverse scaffold types. These candidates exhibit improved binding affinity, better synthetic feasibility, and enhanced ADMET profiles. The engine can predict multi-dimensional medicinal chemistry properties of compounds, thereby reducing the risks and costs associated with drug development.

In addition, the Fermion AI-driven drug discovery platform leverages fragment-based rapid scaffold hopping to deliver superior multi-start optimization performance. This capability enables medicinal chemists to effectively "blend" diverse fragments from multiple known active compounds targeting a specific biomarker, thereby facilitating the efficient identification of lead compounds.

Deng Daiguois the founder and CEO of Fermion. Beneath his low-key and humble exterior lies exceptional capability, as evidenced by his past experiences.

In the first year of his master’s program, Deng Daiguo completed all the credit requirements for both his master’s and doctoral degrees.

In 2014, while in his second year of doctoral studies, he led his team to compete in the Imagnet Computer Vision Competition, achieving the remarkable feat of securing third place globally;

In 2015, Deng Daiguo embarked on his entrepreneurial journey. He led his team to pioneer the application of AI technology in fabric image search engines, creating the industry’s first B2B trading platform for fabrics based on a large-scale image information search engine. The company secured multiple rounds of funding from investors including Sinovation Ventures, Zero One Ventures, Weiguang Capital (founded by former Tencent Senior Vice President Wu Xiaoguang), and other industry-specific capital firms.

In 2018, Deng Daiguo led his team to apply AI technology to the pharmaceutical sector and founded Fermion Technology. The company has since secured Pre-A and Series A financing rounds from investors including Challenger Capital, Panda Capital, Guangzhou Jinkong Fund Management Co., Ltd., and Shenzhen Cosun Investment Management Ltd.

The parallel integration of theory and practice seems to be vividly embodied in him. Unconsciously, this serial entrepreneur has been deeply engaged in the theoretical research, design, and commercial application of deep learning networks for nearly a decade.

However, the rapid growth and remarkable achievements of Fermion were by no means solely attributable to Deng Daiguo. Behind him stood an outstanding cross-disciplinary team. The Fermion team boasts a diverse talent structure, with members possessing complementary skills.

“Our team includes specialists focused on biotechnology, experts in chemical structure research, professionals skilled in AI algorithms, and individuals responsible for medical clinical affairs at top-tier pharmaceutical companies. They are all top talents in their respective fields with extensive industry experience, which empowers our company with sufficient capabilities to conduct preclinical design and rapid development of small-molecule drugs,” said Deng Daiguo happily.

There is another important reason why Fermion can quickly secure a foothold in the field of AI-driven new drug development.

That is, "the entire team's practical experience and accurate understanding of B2B business." Deng Daiguo stated that the experience of serving enterprises with monthly transaction volumes exceeding RMB 50 million has enabled the team to accumulate substantial expertise in the forms and logic of B2B operations. This has been highly beneficial for Fermion to rapidly communicate and collaborate with enterprise clients.Based on the affirmation of Fermion, the customer repurchase rate is nearly 100%.Deng Daiguo’s team believes that data reliability and deterministic commercial delivery are the core of B2B business, and the primary reasons for the team’s nearly 100% customer repurchase rate.

Currently, the AI-driven drug discovery sector still faces certain challenges: traditional pharmaceutical professionals continue to play a dominant role in drug R&D, making it difficult for many AI specialists to engage deeply in these projects.

Deng Daiguo stated, “Traditional pharmaceutical researchers do not know what AI specialists can do, and AI specialists do not know what traditional pharmaceutical researchers need. This is the biggest constraint limiting the deep integration of AI with traditional pharmaceuticals. Fermion positions itself as an AI-driven drug discovery company rather than an AI technology company, based on considerations of these issues. Our core objective is to produce high-quality, druggable molecular data.”

According to Deng Daiguo, Fermion is the first AI-driven pharmaceutical company in China dedicated to co-developing pipelines with listed pharmaceutical companies. Currently,In the fields of inflammation and metabolism, Fermion has multiple product pipelines that have all reached the Preclinical Candidate (PCC) stage, with IND filings expected in 2021.

Regarding future development plans, Deng Daiguo stated, “Most of the projects Fermion has collaborated on in the past two years were at the pre-PCC stage or earlier. We hope to engage in in-depth collaborations with pharmaceutical companies at the PCC stage, IND stage, and even Phase I clinical trials in the future. Meanwhile, we will further increase our investments in algorithms and data to establish a comprehensive, novel AI-driven solution for preclinical small-molecule drug development, while also building a more robust product pipeline.”

Tang Binsen, Founding Partner of Challenger Capital, stated, “Challenger Capital aims to address China’s lag in global new drug development by investing in AI-driven pharmaceutical R&D companies like Fermion. The greater the gap China faces in an industry, the greater the opportunity. In the future, any industry may be transformed or replaced by AI technology. We believe that what sets the Fermion team apart from others is their strong original aspiration and sense of mission.”

Liang Weihong, Founding Partner of Panda Capital, stated, “We invested in Fermion at the angel round. At that time, we observed the application of U.S. AI technologies in new drug development and believed that Chinese pharmaceutical companies were in greater need of technological innovation. However, given the significant differences between the Chinese and U.S. markets, which impose higher demands on entrepreneurial teams, we ultimately chose the team led by Dai Guo. We valued their substantial technical expertise, their mature thinking regarding business models and strategic pathways, and their strong execution capabilities in the B2B market.”

Lu Yongwei, General Manager of Guangzhou Jinkong Fund Management Co., Ltd., stated, “We have always been bullish on the healthcare and wellness sector, which is poised for a golden age in China over the next two decades. The iteration of AI algorithms helps break through the efficiency bottlenecks in domestic innovative drug R&D. In such a vast and dynamic market, outstanding global AI-driven biopharmaceutical companies will inevitably emerge in China. Dr. Deng possesses serial entrepreneurial experience and a solid understanding of B2B business models, while his team demonstrates strong execution capabilities. Fermion entered the AI drug discovery field early, securing a first-mover advantage, and has developed a profound understanding of this domain. We are optimistic about Fermion’s prospects.”

Guo Luwei, Managing Partner of Cosun Capital, stated, “Cosun Capital has long been bullish on the artificial intelligence and healthcare sectors. Our investment team’s prior entrepreneurial successes have given us a profound understanding of China’s startup ecosystem, the healthcare industry, and corporate management. We favor ‘Super CEOs’ who lead teams with complementary skills and shared values. Fermion is one of the few companies we have seen in this sector that deeply integrates AI with industrial applications. Furthermore, the team demonstrates deep commercial insight and practical experience in enterprise services. The company’s business progress, rapid commercialization, and strong customer recognition were the primary reasons for our investment in Fermion.”