Shenzhen and Fosun Pharma Launch RMB 5 Billion Biopharmaceutical Industry Fund

On the evening of March 12, Fosun Pharmaceutical announced that its controlled subsidiaries/entities—Fuxin Shenyao, Fosun Pharmaceutical (Shenzhen), and Fojian Fund Management Company—along with the Shenzhen Guiding Fund and seven other investors, intend to jointly contribute capital to establish a target fund.The target fund plans to raise RMB 5 billion, with the Shenzhen Guiding Fund committing to 50% of the capital.

It is reported that this investment aims to further deepen the sharing of resource advantages and cooperation between Fosun Pharmaceutical and Shenzhen, enrich the channels for cultivating enterprises in Shenzhen’s big health sector (primarily biopharmaceuticals), and strengthen the reserve and strategic layout of innovative technologies and products.

The announcement stated that the target fund willWith Shenzhen as the core focus, all raised funds will be invested in fields such as biopharmaceuticals, cell therapy, and gene therapy, with no less than 70% of the target fund's investable amount allocated to the biopharmaceutical sector.Furthermore, unless approved by the partners’ meeting, the Target Fund’s investment in any single enterprise or project shall not exceed 20% of the total committed capital of the Target Fund.

Fuxin Shenyao (as GP), Fosun Pharmaceutical (Shenzhen) (as LP), and Fosun Health Capital Management Company (as LP) intend to subscribe to equivalent property interests in the target fund with cash contributions of RMB 20 million, RMB 1.43 billion, and RMB 50 million, respectively. Shenzhen Guiding Fund, Pingshan District Guiding Fund, Futian District Guiding Fund, Huitong Jinkong, Longgang District Guiding Fund, Guangming District Guiding Fund, and Dapeng New Area Guiding Fund all subscribe as LPs to the capital contributions of the target fund.

Upon establishment, the Target Fund will become an associate of Fosun Pharmaceutical, and its controlling subsidiary, Fosun Health Capital, intends to accept engagement by the Target Fund to serve as its fund manager. The estimated annual caps on management fees for the Target Fund from 2024 to 2026 are RMB 27.5 million, RMB 75 million, and RMB 100 million, respectively.

The Target Fund’s investment strategies include equity investments in non-listed companies and participation in private placements of listed companies, with the total amount invested in private placements not exceeding 20% of the Target Fund’s investable capital.

The announcement shows,The target fund is registered in Pingshan District, Shenzhen City, Guangdong Province.. In March 2023, the Shenzhen Biomedical Industry Fund, with a scale of RMB 5 billion, announced its establishment in Pingshan, committing to invest 100% in sectors such as biomedicine, cell and gene therapy, medical devices, and general health. In September, Fosun Health Capital, initiated by Fosun Pharmaceutical as the controlling shareholder, was selected as the target fund management institution.

At the Shenzhen Global Investment Promotion Conference held in late 2023, Fosun Pharmaceutical signed an agreement to establish its “Fosun Pharmaceutical Greater Bay Area Headquarters” in Pingshan. Selected production lines of its subsidiaries, Henlius and Fosun Kite, will be among the first projects to settle there, thereby creating Fosun Pharmaceutical’s second global headquarters for innovative drugs. At the conference, Guo Guangchang, Chairman of Fosun International, who was awarded the title of “Shenzhen Investment Promotion Advisor,” stated that Shenzhen is currently full of opportunities and provides a platform well-suited for the development of outstanding global enterprises. Fosun will collaborate with Shenzhen to build a global highland for the clustered development of innovative pharmaceuticals.