Jingze Biopharma Files IPO Prospectus: Balancing Proprietary R&D and CDMO Services with a Proven Leadership Team

Frost & Sullivan projects that China’s biologics market will maintain a compound annual growth rate (CAGR) of 16.4% from 2016 to 2021, reaching RMB 326.9 billion by 2021. With the vigorous development of the biopharmaceutical sector, pharmaceutical companies are placing increasingly higher demands on the efficiency and cost-effectiveness of drug development, leading to growing preference for CDMOs with strong technological capabilities.

CDMO companies are categorized into “specialized” and “hybrid” types. “Hybrid” refers to enterprises that engage in both self-developed projects and provide CDMO services. Shanghai Jingze Biotechnology Co., Ltd. (hereinafter referred to as Jingze Bio) is a typical “hybrid” enterprise.

Jingze Bio, established in 2014, is a biopharmaceutical company founded by a team led by Dr. Peng Hongwei and backed by investors including Jingfeng Pharmaceutical. The company is dedicated to the research, development, and industrialization of innovative biological drugs and high-end biomedical materials using cutting-edge biotechnologies. Its technological portfolio spans multiple fields, including monoclonal antibodies, recombinant proteins, and tissue-engineered biodegradable materials.

Since its inception, Jingze Bio has adhered to a “two-pronged” strategy, steadily advancing its own new drug R&D projects while providing CMO/CDMO services to pharmaceutical companies.It is reported that since 2015, the company's revenue from technical contracts has amounted to nearly RMB 200 million.

Previously, major biopharmaceutical companies independently conducted drug research and development (R&D) and manufacturing, allowing for effective control over drug project initiation, R&D, and production processes. However, over the past decade, with the rapid development of the biopharmaceutical industry, this model has revealed certain limitations.

Dr. Peng Hongwei, General Manager of Jingze Bio, pointed out several major pain points in China’s biopharmaceutical industry.

First, there is a shortage of high-end talent.The cost of talent development for pharmaceutical companies is extremely high, as building a mature team takes three years or even longer. Due to the scarcity of high-end talent and high turnover rates within the industry, pharmaceutical companies are engaged in fierce “talent wars,” which hinders their long-term, sustainable growth.

Second, establishing a GMP-compliant manufacturing base requires substantial capital investment, amounting to hundreds of millions of yuan.Following the establishment of the GMP production platform, an annual operational expenditure of tens of millions is required to ensure its effective operation.

In this context, CDMOs have emerged as the solution to address the high costs associated with drug development.

“CDMOs can provide pharmaceutical companies with early-stage R&D platforms, offering integrated services spanning from preclinical research to commercial manufacturing. Pharmaceutical companies need only possess adequate funding and corresponding project management personnel and teams to rapidly initiate drug research and production translation. This approach helps pharmaceutical companies significantly improve production efficiency, reduce manufacturing costs, and avoid redundant heavy-asset investments, thereby facilitating the realization of the national strategic goal of ‘Mass Entrepreneurship and Innovation.’”Dr. Peng Hongwei stated.

On August 26, 2019, at the 12th Session of the Standing Committee of the 13th National People's Congress, the newly revised "Drug Administration Law" was reviewed and approved, effective from December 1, 2019. The newly revised "Drug Administration Law" clearly states that China implements a Marketing Authorization Holder (MAH) system for drug management. Under this system, marketing authorization holders are legally responsible for ensuring the safety, efficacy, and quality controllability of drugs throughout their entire lifecycle, including research and development, production, distribution, and usage.

Compared with the previous model where drug marketing authorization and manufacturing authorization were bundled, the MAH system decouples marketing authorization from manufacturing authorization. This grants CDMOs the qualification to undertake production orders and enables R&D institutions without manufacturing credentials to complete production through CDMOs, thereby creating significant business opportunities for numerous CDMO enterprises.

The vast development prospects of the CDMO industry have attracted numerous companies to enter the CDMO business, injecting vibrant vitality into the entire sector. However, Dr. Peng Hongwei believes that China’s CDMO industry still faces numerous challenges at the current stage.“Surveys indicate that 80%–90% of CDMOs lack experience in successfully translating drug candidates into marketed products, with significant disparities in corporate capabilities and varying levels of proficiency. The CDMO industry is poised for further consolidation.”

Factors such as talent quality, project experience, speed of industrialization, intellectual property protection, and quality systems are key considerations for pharmaceutical companies when selecting CDMO partners, and these also constitute the core competitiveness of CDMO enterprises.

Jingze Bio's core team members each possess 20 to 30 years of experience in drug research and development, having successfully driven the market launch of multiple pharmaceutical products.Dr. Peng Hongwei, General Manager, is a seasoned veteran in the biopharmaceutical industry. He has served as a senior executive at multiple listed companies and has a successful track record in entrepreneurship. He has facilitated the clinical development or market approval of more than 10 new drugs and filed over 20 national invention patents.

According to reports, both Xinhuosu and Recombinant Teriparatide for Injection were developed by the team led by Dr. Peng Hongwei. Xinhuosu has been included in the National Reimbursement Drug List of China and is currently the exclusive product in the Chinese market, with annual sales approaching RMB 1 billion. Recombinant Teriparatide for Injection is the only FDA-approved drug that promotes bone formation, with global sales reaching USD 1.6 billion, indicating significant potential in the Chinese domestic market.

Furthermore, as Jingze Bio has its own new drug R&D projects, the company possesses extensive project experience and is well-versed in the key aspects and processes of drug development, enabling it to provide superior CDMO services to clients. Regarding intellectual property (IP) conflicts, Dr. Peng Hongwei stated, “The company maintains strict IP protection protocols. We clearly define relevant parameters before undertaking any project and will not accept engagements that conflict with our proprietary projects, thereby safeguarding our clients’ rights.”

As a shareholder of Jingze Bio, Jingfeng Pharmaceutical has provided strong support to Jingze in areas such as development site provision and logistical services. Jingze Bio has established an early-stage drug development platform capable of assisting clients with a comprehensive range of activities, from target identification and molecular design to clinical trial application submission.

In addition, Jingze Bio is establishing a modern GMP R&D and manufacturing base for monoclonal antibodies and fusion proteins in Chengdu Medical City, Sichuan Province. Covering an area of 101 mu, the facility features a culture volume exceeding 10,000 liters and is capable of producing two formulation types: vials and pre-filled syringes, with an annual formulation capacity of 3 million units. The base complies with the registration standards of both China’s NMPA and the US FDA. Dr. Peng Hongwei stated:“The completion of the GMP facility marks Jingze Bio’s transformation from a provider of pure R&D services into a CDMO capable of offering one-stop services from R&D to production.”

Dr. Peng Hongwei noted, “The development of biopharmaceutical enterprises in western China lags behind that in the eastern region. It is hoped that upon completion of Chengdu’s GMP-compliant facility, it will better serve biopharmaceutical companies in central and western China.”

In its early stages, Jingze Bio primarily focused on the research and development of biosimilars. Currently, the company is establishing a research and development center in the United States by recruiting high-level overseas experts.Gradually transitioning to a dual focus on biosimilars and innovative drug R&D, providing technical services for innovative drug development to serve more innovative pharmaceutical companies.

Looking ahead, Jingze Bio will continue to advance its in-house R&D projects. It is understood that the company’s assisted reproductive product, Recombinant Human Follicle-Stimulating Hormone for Injection, is currently undergoing Phase III clinical trials. This genetically recombinant human follicle-stimulating hormone (FSH) product is used to induce ovulation in women. Upon market launch, it is expected to effectively replace high-priced imported products and domestically sourced urine-derived FSH products. Additionally, the company’s ophthalmic therapeutic product, JZB32, is the world’s only pharmaceutical alternative to vitrectomy surgery and has received approval to commence clinical trials.

In terms of CDMO services, Jingze Bio will accelerate the completion of its GMP facility construction to better serve its clients.The company will continue to adhere to its “dual-pronged strategy,” securing a foothold in China’s biopharmaceutical sector through in-house R&D projects and CDMO services.

According to Dr. Peng Hongwei, Jingze Bio will make more significant moves in the CDMO industry in the coming years, which are worth anticipating.