Hubei Launches RMB 1 Billion Government-Backed Healthcare Fund: Tayo V Life Health Industry Investment Fund Files Prospectus

It has been learned that the Hubei Taiyu Phase V Life and Health Industry Investment Fund, with a total size of RMB 1 billion and established with the support of the Hubei Provincial Government Investment Guidance Fund, has been officially launched, boosting the development of the “51020” trillion-level grand health industry.

The fund was jointly established by the Hubei Provincial Government Investment Guidance Fund and TigerYeah Capital. Dr. Ji Tianrong, a founding partner, has previously held positions at Peking Union Medical College Hospital, Janssen, Roche, Baxter, and other multinational corporations. The fund’s initial closing size is RMB 260 million, with a provincial committed capital contribution of RMB 50 million, accounting for 19.2%. It primarily invests in the life and health sectors, including medical devices, innovative drugs, CROs, and biotechnology.

The fund manager for the fifth phase of the Taiyu Life and Health Industry Investment Fund is TigerYeah Capital, which has currently established a team and commenced operations in Hubei Province.

According to the official website of TigerYeah Capital, the firm was established in 2014 as a holding subsidiary of Tigermed. It focuses on investing in healthcare companies in their early and growth stages that feature strong innovation and core intellectual property rights. Currently, it manages six funds with a total scale exceeding RMB 2 billion and has cumulatively invested in nearly 100 projects. Its investment portfolio includes biotech companies such as Kejun Medicine, Duoxi Biology, Jiachen Xihai, Ruidi Biology, and Luoqi Biology.

According to the official statement from the Hubei Guidance Fund, the Taiyu Phase V Life and Health Industry Investment Fund has the following objectives:

First, it leverages out-of-province capital to invest in Hubei. Apart from the investment by the Provincial Government Investment Guidance Fund, all other contributions to this fund come from social capital outside the province. The fiscal funds have been amplified by a factor of 5.2, demonstrating a significant leveraging effect of government investment.

Second, leading institutions are being introduced to establish operations in Hubei. TigerYeah Capital, an independent professional venture capital firm under Tigermed, boasts a management team with deep expertise in the healthcare industry, extensive industry resources, and rich investment experience, along with a strong track record. It has currently deployed teams in Hubei to conduct business operations.

Third, to attract the agglomeration of industrial elements in Hubei. Backed by Tigermed, the leading listed clinical CRO enterprise ranked first in China and eighth globally, this fund will leverage its industry leadership to attract a batch of biopharmaceutical enterprises (projects) to settle in Hubei. This initiative aims to extend, supplement, and strengthen the life health industry chain, thereby facilitating the high-quality development of the province’s life health sector.

Earlier, Hubei Province issued the “Three-Year Action Plan for Breakthrough Development of the Life and Health Industry (2023–2025),” which stated that it strives to achieve total operating revenue of over RMB 1 trillion for the province’s life and health industry by 2025, firmly securing its position among the nation’s top tier, and to establish a nationally leading industrial cluster for biopharmaceuticals and medical devices, a national hub for the development of the life and health industry, and a nationwide center for health consumption.

In fact, Hubei has targeted three key areas in the development of its life and health industry: high-end medical equipment, original innovative drugs, and distinctive traditional Chinese medicine. By the end of 2024, the industry’s scale showed signs of surpassing the RMB 1 trillion mark.

City-Specific Developments. Wuhan has initially formed industrial clusters for high-end medical equipment and innovative biologics, with over 4,500 market entities and a scale approaching RMB 500 billion. Yicheng is accelerating the development of industrial clusters focused on chemical drugs and active pharmaceutical ingredients (APIs), with the life and health industry surpassing RMB 100 billion. Huanggang is leveraging its advantageous resources, such as Qichun mugwort, to accelerate the formation of a specialized traditional Chinese medicine (TCM) industrial cluster, continuously expanding the application scenarios for Qichun mugwort, with a scale exceeding RMB 50 billion. Xianning is concentrating on developing an integrated wellness and healthcare industrial cluster that combines “medical care, pharmaceuticals, elderly care, health management, tourism, and nursing,” with a scale exceeding RMB 60 billion.

In the primary market, according to incomplete statistics from VCBeat, healthcare companies in Hubei Province secured over RMB 500 million in cumulative financing in 2024, with more than 20 companies disclosing their funding rounds.

Financing projects, particularly those entering the growth and maturity stages, have attracted a greater number of partners. Maiwei Metabolism has partnered with MGI Tech to jointly establish the DCS Lab in Wuhan, advancing plant single-cell spatiotemporal multi-omics research with advanced equipment to support scientific development. BinHui Bio successfully completed its Series C financing; its flagship product is an injectable formulation of recombinant oncolytic herpes simplex virus type 2 (OH2), indicated for conditions such as lung cancer, head and neck tumors, lymphoma, liver cancer, and melanoma. Weike Medical reached a cooperation intent with Professor Melzer from Germany at the “East Lake Forum” in the field of image-guided interventional therapy, aiming to jointly promote the precision and intelligent development of medical technology and accelerate the commercialization of innovative products.

Key technologies addressing critical gaps are also being rapidly mastered. Ruijian Medicine has established the iReOrgan organoid platform, which leverages chemical induction processes to achieve scalable culture of diverse organoids and high-throughput drug screening. The platform has already been applied to Parkinson’s disease drug development, ensuring clinical efficacy and safety, thereby filling a gap in the evaluation system for innovative drugs.

Furthermore, Zhonghua Brain-Computer Interface Company has mastered the “bidirectional read-write” technology for cerebral electrical signals; Wuhan United Imaging Intelligence has pioneered the world’s first integrated navigation and positioning robotic system for neurosurgery; and Wuhan Weixintan Company has achieved the world’s first breakthrough in “myocardial resection” technology, solving the global challenge of resecting hypertrophic myocardium without thoracotomy or cardiac arrest.

In terms of innovative products, the NMPA recently approved the registration application for Wuhan Caidavis’s human CDO1/AJAP1/GALR1 gene methylation detection kit (fluorescent PCR method) as an innovative product. Moreover, a batch of globally leading innovative achievements has broken through to market launch. Among them, Zhongke Jihua’s multi-nuclear magnetic resonance imaging equipment for human lungs successfully illuminated the “black hole” of the lungs, becoming the first approved product of its kind worldwide. Chujingling’s real-time diagnostic system for digestive endoscopy is a global first, facilitating early detection, diagnosis, and treatment of gastrointestinal tumors.

New original innovative drugs have received marketing approval. Since 2020, nine Class I new drugs from leading enterprises such as Humanwell Healthcare, Haitai Biological Pharmaceutical, and Jianmin Pharmaceutical Group have been approved for market launch. Biotech companies are also making significant strides; Mengyang Pharmaceutical is conducting Phase II clinical trials of DH001, a Class I new oral cardioprotective agent that is the world’s first drug to prevent doxorubicin-induced cardiotoxicity. Nearly 400 new drugs are under development across Hubei Province, with the number of approved new drugs ranking among the highest in China.

This is not the first time such a government fund has been established. On November 26, 2024, at the Optics Valley Life and Health Industry Investment and Financing Conference, CICC Capital, leveraging the Wuhan New City Science and Technology Innovation Fund of Funds, collaborated with professional investment institutions such as TigerYeah Capital to establish specialized sub-funds focused on niche segments of the life and health sector. This initiative formed a cluster of Optics Valley Grand Health Industry Funds, primarily targeting early- to mid-stage innovative enterprises in biopharmaceuticals, with investments directed toward areas such as medical devices, diagnostics, and innovative drugs.

Meanwhile, the integration of fiscal and financial services has improved in quality and efficiency. Currently, the Hubei Provincial Government Investment Guidance Fund has collaborated with pharmaceutical companies such as Mingde Biology and Daan Gene, as well as professional investment institutions like Jifeng Capital, to establish six life and health industry funds, including Mingjun Hezong. The total scale of these funds has reached RMB 3.72 billion. They have invested in 11 life and health industry projects, with a total investment amounting to RMB 316 million. Additionally, 35 projects have been included in the investment pipeline, involving a potential investment amount of RMB 2.36 billion.

In fact, since the beginning of 2023, numerous mother funds with scales of tens of billions and hundreds of billions of yuan have emerged across various regions. According to incomplete statistics, by August 2023, the total scale of government guidance funds announced in many localities had exceeded RMB 1 trillion. In the following months, local governments remained active, frequently launching major local guidance funds. Notably, on the last day of 2023, Suzhou registered and established the Suzhou State-owned Capital with a size of RMB 50 billion. According to incomplete statistics from VCBeat, in 2023 alone, there were 388 investment cases in China’s healthcare sector directly involving state-owned capital, exactly double the number recorded in 2022.

Admittedly, since the beginning of 2023, the entire capital market has cooled down from its previous fervor. In this context, the participation of state-owned assets or local government funds has played a key role in boosting industry confidence. Focusing further on the healthcare sector, a priority area for state-owned investment, the scale of capital injection has been unprecedented.

It is worth noting that the geographic focus of state-owned capital’s layout in the healthcare industry is highly pronounced. Particularly in first-tier cities, state-owned enterprises have made significant strides in the biopharmaceutical sector, leveraging their substantial financial resources and long-term industrial planning. Typical examples of monoclonal antibody development hubs include Beijing Yizhuang and Shanghai Zhangjiang. Meanwhile, regions with distinct local industrial clusters are also actively promoting growth; for instance, Taizhou in Jiangsu Province has formed a vaccine industry cluster, while Changsha in Hunan Province has attracted relevant enterprises by offering streamlined approval processes for medical devices.

Over the past two years, the biomanufacturing industry has gradually taken shape, not only strengthening the industrial chain but also driving new breakthroughs and innovations in biopharmaceuticals. In parallel, supporting services within the CRO sector have been continuously improved. Looking ahead, the anticipated market recovery is expected to provide significant support to innovative pharmaceutical companies.

Furthermore, emerging fields such as large AI models, and the traditional Chinese medicine (TCM) sector, which embodies the spirit of “innovating while preserving tradition,” are also poised to revitalize amidst the wave of state-owned capital investment. For instance, large AI models have demonstrated unique advantages in target selection and molecular structure design. Benefiting from the vast market potential driven by aging demographics, TCM has become a hot spot for state-owned capital investment in recent years and is expected to evolve into stable consumer-oriented or cash-flow-generating products.

According to an announcement by the Hubei Provincial Development and Reform Commission, Hubei will establish itself as a globally influential hub for the research, development, and intelligent manufacturing of medical equipment, a specialized highland for original innovative drugs, and a center for smart healthcare services. By 2025, the province aims to launch 10 innovative medical devices and 10 national Class I new drugs, transforming technological innovation—the “key variable”—into the “greatest increment” driving breakthrough industrial development.

References:

Hubei’s Life and Health Industry Poised to Surpass the Trillion-Yuan Mark Ahead of Schedule: What Will Be the Next Focus?

State Capital Enters the Arena: How Can the Biopharmaceutical Industry Welcome Its “Spring”?

Tigermed’s Taiyu Phase V Fund Is Launched, with a Total Size of RMB 1 Billion