XBiome Secures Over RMB 1 Billion in Series B Funding, Pioneering AI-Driven Microbiome Therapeutics in China

VCBeat has learned that Xbiome Co. Ltd. (hereinafter referred to as “Xbiome”), based in Shenzhen, has officially announced the completion of its Series B financing round. The round was led by Legend Capital, with existing investors GGV Capital, Morningside Venture Capital, and Yahui Investment continuing to participate. Reportedly, Xbiome secured over RMB 100 million in total investment, marking the largest financing event to date in China’s microbiome pharmaceutical industry.

Zhao Mingwei, Executive Director at Legend Capital, stated, “Xbiome boasts a world-class bioinformatics R&D team. By applying artificial intelligence (AI) technology to the emerging field of gut microbiome-based drug development, the company is poised to significantly shorten new drug development cycles and improve success rates. We are optimistic about Xbiome’s potential to become a platform-based novel drug developer in this sector, leveraging its AI capabilities and data accumulation. Legend Capital will continue to closely monitor investment opportunities driven by AI across various vertical industries.”

Xbiome, founded in 2017, is China’s first AI-driven microbiome pharmaceutical company. Its core R&D team hails from world-leading research institutions and pharmaceutical companies, including the Broad Institute, Harvard University, MIT, Pfizer, and Bristol-Myers Squibb. Leveraging gut microbiome modulation as its foundation and supported by AI and biotechnology, Xbiome is dedicated to tackling refractory human diseases and improving human health.

Xbiome is one of the few platform-based companies in China dedicated to microbiome therapeutics. In just two years since its establishment, Xbiome has built a data-driven preclinical platform for microbiome drug development, providing end-to-end standard operating procedures (SOPs) for this field, which still lacks standardized drug development protocols. The platform comprises six sub-platforms, covering all stages from multi-omics computation and functional strain discovery and development to manufacturing.

Since announcing its Series A+ financing round in June this year, Xbiome has made significant progress across its various sub-platforms. For instance, on the bioinformatics and AI platforms, Xbiome has customized and improved strain analysis algorithms such as StrainFinder and PanPhlAn, thereby enhancing the sensitivity and accuracy of strain detection and analysis. The former is used to track trends in strain changes before and after fecal microbiota transplantation (FMT) in projects, while the latter is employed to identify and distinguish key strains associated with response and non-response to PD-1 inhibitors. Both have yielded promising preliminary results.

Leveraging extensive industry resource advantages, Xbiome has applied some of its achievements to hospital-enterprise collaborative projects. The PanPhlAn algorithm, customized and improved by Xbiome, has been utilized in a joint treatment project combining fecal microbiota transplantation (FMT) with anti-PD-1 immune checkpoint inhibitors, conducted in collaboration between Xbiome and Peking University Cancer Hospital. Furthermore, Xbiome has initiated clinical research with Shanghai Xinhua Hospital on the treatment of autism spectrum disorder through fecal microbiota transplantation. These projects have all entered the human trial phase and have yielded excellent preliminary data. Currently, the relevant institutions are actively preparing to submit Investigational New Drug (IND) applications to the U.S. Food and Drug Administration (FDA).

Xbiome’s cloud-based strain analysis platform, currently being deployed, alongside the continuous refinement of donor screening methods, has significantly enhanced the development efficiency of formulated bacterial drugs. To date, Xbiome has completed the isolation, screening, and functional validation of nearly 1,000 proprietary bacterial strains. Notably, several formulated bacterial combinations have achieved breakthrough results in animal studies when used in combination therapy with PD-1 antibody drugs. Consequently, Xbiome is actively engaging in collaborative discussions with multiple pharmaceutical companies in China. By optimizing formulated bacterial drugs to complement each company’s specific PD-1 antibody therapies, Xbiome aims to rapidly advance these bacterial drug candidates into clinical trials.

These research achievements have established Xbiome’s leading position in the industry and attracted collaborations with numerous top-tier research institutions and hospitals. In September this year, Xbiome and the Shenzhen Institutes of Advanced Technology, Chinese Academy of Sciences, jointly announced the establishment of the “Microbiome Pharmaceutical” Joint Laboratory. The laboratory will primarily focus on cutting-edge technological research, new product development, technical platform construction, and talent cultivation in areas such as gut microbiota isolation, identification, screening, drug development, and automated high-throughput culturomics platforms. It is also expected to explore further disease model development and mechanistic studies for autism, Parkinson’s disease, and Alzheimer’s disease.

Xbiome and Shenzhen Institute of Advanced Technology, Chinese Academy of Sciences Jointly Announce the Establishment of the “Microbiome Pharmaceutical” Joint Laboratory

Xbiome’s collaborations with hospitals are not only a testament to its rapid growth in recent years, but also reflect the broader policy support benefiting the microbiome pharmaceutical industry. Currently, multiple provinces and municipalities across China have begun incorporating fecal microbiota transplantation (FMT) as a reimbursable service into clinical practice within hospitals. Xbiome’s Whole Microbiota Transplantation™ liquid formulation and Whole Microbiota Transplantation™ capsules have gained favor among numerous large-scale hospitals due to their rigorous screening criteria and comprehensive production management systems, leading to the establishment of cooperative agreements.

As of the end of October 2019, Xbiome had won multiple awards, including the “2019 Shenzhen Top 20 Leading Biotech Companies – Pioneer Enterprise Award” presented by the 2019 Shenzhen International BT (Biotechnology) Conference, and the “Top 50 Biotech Innovation Enterprises in the Guangdong-Hong Kong-Macao Greater Bay Area (2019, 2nd Edition) – Pioneer Enterprise.” It was also selected as one of the “Top 50 Best Innovative Companies in China 2018” by Fast Company magazine.

Xbiome Awarded the “2019 Shenzhen Top 20 Leading Biotech Companies – Pioneer Enterprise Award”

“Looking back on Xbiome’s growth, Dr. Tan Yan, Founder and CEO, stated: ‘Microbiome pharmaceuticals represent a new trend that has emerged in the international pharmaceutical industry in recent years. Xbiome aims to establish deep roots in China and, together with partners across the upstream and downstream of the industrial chain, explore its own path for the development of China’s gut microbiome pharmaceutical industry.’”

Xbiome is China’s first AI-driven pharmaceutical company focused on gut microbiome therapeutics, dedicated to tackling refractory human diseases and improving human health through gut microbiome modulation, underpinned by artificial intelligence and biotechnology. Its core R&D team hails from world-renowned institutions such as the Broad Institute, Harvard University, MIT, Stanford University, Icahn School of Medicine at Mount Sinai, and Johns Hopkins University. The drug development team brings extensive R&D experience from leading global pharmaceutical and biotechnology companies, including Pfizer, Novartis, and Bristol-Myers Squibb.

Legend Capital is one of the oldest private equity investment firms in China, with total assets under management in USD and RMB funds exceeding RMB 45 billion. Legend Capital focuses on innovation and growth opportunities in China, having invested in nearly 450 companies to date, of which approximately 70 have successfully listed on domestic or overseas stock exchanges.

Founded in January 2014 by founding partners Zhang Zhen, Gao Xiang, and Yue Bin, Gaorong Capital focuses on early-stage and growth-stage investments, with a particular emphasis on innovative ventures in new consumption and new technology sectors. Within five years, the total assets under management of its US dollar and RMB funds exceeded RMB 15 billion. To date, ten portfolio companies backed by Gaorong Capital have successfully completed initial public offerings (IPOs), with many emerging as industry leaders. These include Pinduoduo (NASDAQ: PDD), a pioneer in new e-commerce; Huya Live (NYSE: HUYA), an interactive live-streaming platform dedicated to technology-driven entertainment; and GSX Techedu (NYSE: GSX), a leading K-12 online education provider in China.

Morningside Venture Capital is one of the earliest institutions in China to engage in early-stage venture capital. Currently, it manages dual-currency funds in both US dollars and Chinese renminbi, with assets under management totaling several billion US dollars. Its limited partners include internationally renowned sovereign wealth funds, family offices, funds of funds, and university endowments. Over the course of nearly two decades of collaboration, the Morningside team has been dedicated to identifying, supporting, and empowering solitary entrepreneurs, sharing their exceptional vision, and providing them with our insights, industry expertise, and comprehensive support spanning from spiritual encouragement to all aspects of operational management.

Successful cases include Sohu, Ctrip, The9, Zhengbao Distance Education, Juzhong Media, Xunlei, Phoenix New Media, UCWeb, YY Inc., Dahuangfeng Ride-hailing, Musical.ly, Huami Technology, Jingrui Education, Huya, Xiaomi Group, and Viomi. The investment portfolio also includes high-growth outstanding enterprises such as Kuaishou, WeDoctor Group, SenseTime, XPeng Motors, DASOU CHE, Horizon Robotics, Bigo, AiHuiShou (Aihuishou), Xiaozhu Short-term Rental, Maimai, Smartmi, Pony.AI, Keep, and Agora. Morningside Venture Capital has offices in Shanghai, Beijing, and Hong Kong.

Yahui Investment is an early-stage investment fund focused on the life sciences sector. Centering on the application of cutting-edge innovative biotechnologies in disease diagnosis and treatment, Yahui Investment has completed investments in more than 20 early-stage biotech startups.