Junheng Medicine Completes Tens of Millions RMB Angel Financing to Advance Quality Marker-Based Innovative Traditional Chinese Medicine Development

VCBeat has learned that Hangzhou Junheng Pharmaceutical Co., Ltd. (hereinafter referred to as “Junheng Pharma”) has officially announced the completion of its angel financing round, amounting to tens of millions of yuan. This round was exclusively funded by Huafang Capital and will be primarily used to build an innovative traditional Chinese medicine (TCM) development platform aligned with modern clinical needs and to expand its talent pool.

Junheng Pharmaceutical, headquartered in Hangzhou, is a technology-leading CXO company specializing in traditional Chinese medicine (TCM). In February 2021, its subsidiary, Junheng Pharmaceutical (Shanghai) Co., Ltd., was established. As a high-growth startup, Junheng Pharmaceutical has been designated as a functional platform unit for biomedical R&D and translation in Shanghai. Leveraging its proprietary quality marker activity tracking platform and multi-target efficacy screening platform, the company provides services including TCM material basis research, pharmacodynamic evaluation, quality and process studies, mechanism of action research, and new drug registration filings. Currently, Junheng’s R&D center spans over 2,000 square meters and is equipped with domestically advanced formulation production and testing instruments, demonstrating significant technological advantages and strong development potential.

The traditional Chinese medicine (TCM) sector, a key focus of Junheng Pharmaceutical, has undoubtedly emerged as a powerful new force within the CXO industry, experiencing explosive growth in recent years. According to data from the Ministry of Industry and Information Technology and the National Bureau of Statistics, China’s TCM market reached a total size of RMB 886.4 billion in 2021, approaching the trillion-yuan mark. The year 2023 served as a pivotal connecting link in the implementation of the “14th Five-Year Plan” for Pharmaceutical Industry Development. Based on forecasts by Menet, the overall scale of China’s TCM market is expected to remain above RMB 1 trillion after 2023. Given the average annual growth rate of 12% for the TCM industry during the “14th Five-Year Plan” period, the total market size is projected to exceed RMB 1.5 trillion by 2026.

Junheng Pharmaceutical has rapidly established a traditional Chinese medicine (TCM) development technology platform by assembling an excellent research team and integrating multi-party resources. It offers one-stop TCM CRO services, providing professional pharmacodynamic services, production process optimization, quality standard research, TCM medicinal material resource assessment, and specialized TCM clinical trial CRO services for the development of innovative TCM drugs and hospital preparations. Its main business areas include: preclinical research and clinical trial services for innovative TCM drugs (Class 1 new drugs) to address contemporary clinical needs; secondary development of major TCM products to research and develop improved new drugs with enhanced efficacy and reduced toxicity (Class 2 new drugs), creating exclusive TCM varieties; development of classic TCM prescriptions (Class 3 new drugs), particularly specialty varieties for indications such as oncology and gynecology; development of same-name, same-formula TCM products with clear clinical value (Class 4 TCM) to enhance the competitiveness of major TCM brands; and third-party quality testing of TCM medicinal materials to control drug quality at the source.

Dr. Cheng Wei, Co-Founder of Junheng Pharma, on the Completion of This Round of FinancingStatement: We sincerely appreciate Huafang Capital’s recognition and support. We have assembled an international technical team comprising experts in the cultivation and processing of traditional Chinese medicinal materials, specialists with backgrounds in the analysis and industrialization of traditional Chinese medicine (TCM) formulations, and researchers with expertise in botanical drug and natural product development from Harvard University. Junheng Pharma will collaborate with partners across the upstream and downstream segments of the TCM industry chain to optimize operations and strategically position itself in advance to provide comprehensive services covering all aspects required for the high-quality development of modern TCM. These services include the cultivation and processing of TCM materials, efficacy research, discovery of quality markers, quality analysis, production processes, clinical trials, and manufacturing. Looking ahead to industry trends in modern TCM innovation over the next five years, Junheng Pharma aims to further strengthen its advantages in efficacy research and quality marker studies, while continuing to value human-use experience derived from folk remedies and hospital preparations, as well as the secondary development of major TCM products. By driving industry progress through continuous innovation, enhancing our R&D capabilities, and strengthening our industrialization capacity, we strive to become a leading enterprise in the field of TCM innovative research and development.

Dr. Luo Wangqian, Partner at Huafang CapitalStatement: In recent years, the Chinese government has implemented a strategy for the inheritance and innovation of Traditional Chinese Medicine (TCM), encouraging the use of modern science and technology to promote its development, which has led to a gradual rise in market enthusiasm for TCM. We remain firmly optimistic about the long-term investment value of the TCM industry, while also keenly recognizing the short-term explosive opportunities for TCM CROs (Contract Research Organizations) that may arise from industry reshuffling driven by recent policy catalysts. The Junheng Pharmaceutical team is an R&D group that combines traditional TCM expertise with modern technological support, possessing strong industry insight and business acumen. This leads us to believe that Junheng is well-positioned to seize industry opportunities and achieve rapid growth. By adhering to a path of faithful innovation and inherited development that deeply integrates the essence of TCM theory with modern technology, and by targeting contemporary clinical needs while using quality markers as standards to control TCM efficacy, Junheng will enhance the international competitiveness of modern TCM, thereby extending its benefits to more patients worldwide.

Currently, the four companies under Junheng Pharmaceutical Group operate with refined management based on business modules: the parent company, Hangzhou Junheng Pharmaceutical Co., Ltd., specializes in the production of modern traditional Chinese medicine (TCM) active pharmaceutical ingredients (APIs) and formulations; its wholly-owned subsidiary, Junheng Pharmaceutical (Shanghai) Co., Ltd., serves as the R&D center responsible for TCM project development; its controlling subsidiary, Jiangxi Junbiao Testing and Certification Co., Ltd., functions as a platform for quality testing and quality control of TCM materials; and its wholly-owned subsidiary, Junheng Pharmaceutical (Taizhou) Co., Ltd., provides a comprehensive high-quality screening and supply system for TCM materials.

Huafang Capital, established in 2017, is a fund manager specializing in early-stage investments in the biopharmaceutical and advanced manufacturing sectors. Its core team members have over two decades of deep experience in the pharmaceutical industry, possessing profound insights into industrial dynamics, project innovation and differentiation, and the development of entrepreneurial teams. To date, Huafang Capital has completed investments in more than 50 projects. Leveraging the extensive industrial resources of Holley Group, including multiple listed companies in the biopharmaceutical and advanced manufacturing fields, it provides comprehensive empowerment to its portfolio companies, helping them rapidly grow into leading enterprises in their respective niche markets.