ZeZheng Pharma: A Rising Leader in Advanced Drug Delivery Systems with Hundreds of Industry Collaborations and Hundreds of Millions in Funding

At a conference held several years ago, the China Pharmaceutical Industry Association for Chemical Drugs presented a report on China’s pharmaceutical formulation sector. The report indicated that among the more than 6,000 pharmaceutical formulation products available in China at the time, only 100 were classified as high-end formulations. Furthermore, approximately 70% of these 100 high-end formulations were relatively simple types, such as sustained-release tablets, sustained-release capsules, and sustained-release granules.

“At that time, there were virtually no truly high-end formulations such as nanocrystals, liposomes, or in situ gels available in China,” Mr. He Dunwei admitted. “It was not until 2015, when relevant laws and regulations were successively promulgated in China, that the industry began to focus on the field of high-end formulations. Later, with the implementation of the volume-based procurement (VBP) policy, prices for conventional formulations were squeezed, prompting domestic pharmaceutical companies to gradually recognize the differentiated clinical and market value of high-end formulations.”

At that time, He Dunwei was employed at the Johnson & Johnson Pharmaceutical R&D Center for the Asia-Pacific region, where he was primarily responsible for leading his team in formulation development and assisting Johnson & Johnson in identifying innovative pharmaceutical companies in China for collaboration. However, China’s innovative pharmaceutical industry was still on the eve of its explosive growth, and standout companies within the sector were exceedingly scarce.

“This is also why I conceived the idea of establishing a CRO company rather than a pharmaceutical enterprise. By running a pharmaceutical company, I might only be able to address industry pain points for that single entity; however, as a CRO, we can collaborate with various pharmaceutical companies, helping more enterprises in the industry resolve technical challenges, improve quality standards, meet the benchmarks of international pharmaceutical companies, and ultimately expand into the global market,” said Mr. He Dunwei, Founder and CEO of HQ PHARMA, sharing his original entrepreneurial motivation with VCBeat.

In 2005, He Dunwei joined the GSK Research Centre, where he was responsible for formulation development and process optimization of various dosage forms.

In 2008, He Dunwei joined the Johnson & Johnson Asia Pacific R&D Center, where he led his team to successfully launch several products and establish external innovation partnerships with multiple companies worldwide.

In 2016, He Dunwei seized the opportunity to establish HQ Pharma Co., Ltd. in the High-Tech Zone of Zibo City, Shandong Province. To raise capital, he sold his house and invested all his savings accumulated over 11 years of previous employment, marking a difficult start for the company.

When asked why he gave up a high-paying job at a Fortune 500 company to start his own business, He Dunwei said:“If you open the book Pharmaceutics, you will find that, apart from pills, pellets, ointments, and powders—which were invented by the Chinese—almost all other dosage forms originate from the West.”“I believe China is well-positioned to advance pharmaceutical formulations and possess world-leading delivery technologies. Therefore, I have set the industry goal for myself and HQ PHARMA to strive to become a ‘global leader in the research and development of Drug Delivery Systems (DDS).’ We hope that HQ PHARMA will continuously develop novel delivery technologies, helping Chinese pharmaceutical companies stay at the forefront of global R&D.”

To accelerate the company’s rapid growth, in 2019 Mr. He Dunwei decided to relocate HQ PHARMA’s headquarters to Shanghai. Leveraging the strengths of its team and technology,The company quickly garnered interest from Morningside Venture Capital and Renhe Capital. In 2021, HQ PHARMA completed its Series A and Series B financing rounds successively, raising a total of hundreds of millions of RMB.

To date, HQ PHARMA has grown into a team of approximately 400 employees, with R&D and technical personnel accounting for about 80%. Its core management team has previously held positions at renowned pharmaceutical companies such as Merck & Co., GSK, Johnson & Johnson, Roche, and Fosun. Currently, HQ PHARMAHeadquartered in Jiading, Shanghai, with wholly-owned subsidiaries in Zibo and Jinan, Shandong, large-scale laboratories and offices (including pilot plant workshops, advanced formulation laboratories, and high-potency drug laboratories) have been established in the three locations respectively,and jointly operated the “Pilot-Scale Technical Service Platform for Advanced Drug Formulations” in Zhangjiang with the Shanghai Biomedical Science and Technology Development Center.The company is committed to providing domestic and international enterprises with compliant and efficient R&D and regulatory submission services for modified new drugs, pediatric medicines, and high-end formulations.

As China’s first one-stop solution service platform dedicated to the R&D and manufacturing of drug delivery systems, HQ PHARMA aims to emulate industry leaders such as ALZA in formulations and Catalent in CDMO services.Eight major technology platforms have been established, including pediatric formulations, oral sustained- and controlled-release systems, nanocrystals, drug-device combinations, in situ gels, oral peptides, and nucleic acid delivery.

Based on the aforementioned technology platform, HQ PHARMA currently primarily featuresThree Major Business Models(1) Including high-end formulations, pediatric formulations, complex formulations, and active pharmaceutical ingredients (APIs), etc.Contract Research and Development Services; (2) improved new drugs, high-end formulations, complex formulations, and first-to-market generic drugsTechnology Achievement Transformation and Equity Sharing; (3)Clinical Contract Services.

Upholding the corporate mission of “empowering human health with pharmaceutical technology,” HQ PHARMA initiates all product projects by addressing unmet clinical needs, evaluates their commercial value in light of actual market conditions, and achieves strategic business goals through co-creation with clients. Leveraging its eight major technology platforms, the company translates clinical medication needs into tangible solutions. Finally, through its integrated CRMDO model, it provides one-stop services for process development and technology transfer in manufacturing.

“Although it was tough at the time, looking back now, it was also a form of refinement,” recalled He Dunwei.

Having weathered early challenges and honing, HQ PHARMA’s various business lines are now bearing fruit.Not long ago, two new drug candidates independently developed by HQ PHARMA—a Class II novel drug and a complex formulation product—successively received approval to initiate clinical trials. Additionally, a liposomal product supported by the company’s clinical team successfully completed dual regulatory submissions in both China and the United States. This month, another product challenging existing patents will also undergo dual submission in China and the U.S.

Amid the recent pharmaceutical winter, HQ PHARMA has emerged as a “warm current,”“Due to the rapid growth of our business, we are currently making significant efforts to expand our team.”He Dunwei told VCBeat, “Order Value in the First Half of This Year Matches That of the Entire Previous Year，A relatively rapid growth is expected this year,"We are also deeply grateful to the industry for its recognition and trust in HQ PHARMA."

As of now,HQ PHARMA has engaged in multiple collaborations with over 180 pharmaceutical companies.Among the Top 100 Chinese Pharmaceutical Companies, nearly half have established cooperative relationships with HQ PHARMA. Additionally, approximately one-third of the nearly 300 listed pharmaceutical companies are partners of HQ PHARMA. Furthermore, HQ PHARMA has formed strategic partnerships with numerous universities and research institutions, including Fudan University, Shandong University, Ocean University of China, Yantai University, Shandong Institute for Drug Control, Qianfoshan Hospital, Zhejiang Hospital, Jinan Central Hospital, and the Affiliated Hospital of Qingdao University.

Looking to the future, He Dunwei stated, “When HQ PHARMA celebrated its fifth anniversary, I shared with our team members and investment partners that I divide the company’s development into two decades. During the first decade, our goal is to become a leading R&D player in drug delivery systems in China; we can quantify our progress by the number of projects completed, and HQ PHARMA is currently advancing toward this objective. In the second decade, we will focus more intently on developing truly innovative drug delivery systems, such as nanocrystals and nucleic acid delivery, striving to become a globally recognized leader in drug delivery system R&D.”