Quanhecheng Files IPO Prospectus: Pioneering Domestic Niche in Oligonucleotide Therapeutics with Integrated Small Molecule API and Nucleic Acid Drug Ingredient Portfolio

Nucleic acid drugs are a class of therapeutics that exert regulatory effects at the post-transcriptional and pre-translational stages, targeting the upstream processes of protein synthesis. Compared with traditional small-molecule drugs, nucleic acid drugs offer advantages such as simplified design, shorter development cycles, high target specificity, and prolonged duration of action. They are currently widely used in the treatment of genetic disorders, tumors, viral infections, and metabolic diseases, and are poised to become the third major category of pharmaceuticals, following small-molecule drugs and antibody-based therapies.

As the structures and functions of nucleic acid molecules continue to be elucidated, advances in nucleic acid synthesis technologies and declining drug costs have made nucleic acid research and pharmaceutical innovation increasingly central to precision medicine and disease treatment. The successful commercialization of small nucleic acid drugs and mRNA vaccines has spurred a surge in the development of nucleic acid therapeutics in China.

According to analyses by Evaluate Pharma and BCG, the global small nucleic acid market is projected to reach $8.6 billion in 2024. In China, the development of small nucleic acid therapeutics remains in its early stages, primarily due to significant technical challenges in the research and development of delivery systems and the localization of core raw materials.

Tianjin Quanhecheng Technology Co., Ltd. (hereinafter referred to as “Quanhecheng”), established in 2010, has chosen this high-growth, popular sector: the research and development, manufacturing, and technical services for nucleic acid-based therapeutics.

China’s nucleic acid drug R&D urgently needs to resolve critical technological bottlenecks; however, key technologies are still in their infancy, and both innovative R&D and industrial commercialization require concerted efforts to overcome challenges and achieve technological breakthroughs.

The entry ticket to the small nucleic acid drug field is Quanhecheng’s twelve years of technical accumulation in the biopharmaceutical sector, a pipeline of over 1,500 innovative products, the establishment of a universal technology platform, and an interdisciplinary team. Leveraging this foundation, Quanhecheng built a nucleic acid drug R&D and manufacturing service platform within two years.

“Our Technical Committee and Scientific Committee bring together top experts in scientific theoretical innovation and industrialization technologies. We aim to achieve import substitution, address critical technological bottlenecks, and truly provide one-stop services for innovative biologics,” said Song Yanmin, founder of Quanhecheng. By engaging in comprehensive industry-academia-research collaborations with leading universities and research institutes, Quanhecheng can consistently maintain a commanding position in its technological reserves.

On June 16, the “Peking University–Quanhecheng” Joint Laboratory was successfully signed and officially launched in the Binhai New Area of Tianjin. Serving as a strategic hub, the joint laboratory will unite multi-party resources to provide solutions for technical challenges at the upstream end of the industrial chain, optimize resource allocation, and promote collaborative development among industry, academia, and research institutions, as well as the translation of scientific and technological achievements.

“Peking University-Quanhecheng” Joint Laboratory Signing Ceremony

“The industrialization breakthrough of small nucleic acid drugs lies in targets, delivery systems, and innovative therapeutics. Each of these areas represents a hot niche sector, demanding exceptional teams and innovative approaches. Therefore, talent reserves and strategic layout, technological iteration and breakthroughs, as well as sustainable revenue generation and operational stability, are particularly crucial,” said Song Yanmin.

On one hand, Quanhecheng will steadily expand production capacity for its already commercialized products to generate internal cash flow for corporate development and support innovative R&D. On the other hand, Quanhecheng will continue to invest heavily in innovative R&D to achieve product iteration, technological upgrades, and a robust pipeline of commercial-ready products.

Leveraging resources from universities and national key laboratories, combined with its own cutting-edge equipment and standardized R&D and production qualifications, Quanhecheng will provide Biotech companies with service platforms for drug discovery, screening, and validation, as well as delivery system platforms and drug analysis and testing platforms. Meanwhile, as a core raw material supplier, Quanhecheng will supply high-quality key materials to Biotech companies, safeguarding the research and development of nucleic acid therapeutics.

“When a biotech company has an idea, its greatest desire is to quickly obtain the relevant products for drug screening and validation. The role of chemists is to help biologists carry out the preliminary work in drug development. What we need to do is enable biotech companies to rapidly acquire these drug raw materials,” introduced Song Yanmin.

Currently, Quanhecheng has launched key production raw materials, including high-purity dNTPs, standard and modified phosphoramidite monomers, pseudouridine, N1-methylpseudouridine triphosphate, NTPs, and cap analogs, thereby overcoming the challenge of domestic substitution for core raw materials.

Meanwhile, the nucleic acid drug discovery, screening, and validation platform will provide biotech companies with a venue for validating source innovations and translating ideas into reality. “The key to small nucleic acid drugs lies in the theories and concepts underlying their initial design; this foundational logic is indispensable for all nucleic acid therapeutics,” said Song Yanmin. “Furthermore, the quality stability and manufacturing consistency of nucleic acid drugs are critical to downstream drug development professionals.”

Leveraging the advantages of the State Key Laboratory, Quanhecheng is capable of conducting high-quality product quality verification, which differs significantly from the quality control of small-molecule compounds. Built on years of integrated R&D and manufacturing services, Quanhecheng can facilitate the industrial implementation of technologies and minimize batch-to-batch variability.

Delivery system technology is key to ensuring the efficacy and safety of nucleic acid drugs, playing a critical role in protecting RNA structure, enhancing targeting capability, reducing administered doses, and minimizing toxic side effects. Among clinical-stage pipelines, lipid nanoparticles (LNPs) are the most common delivery system for mRNA therapeutics.

Delivery systems with independent intellectual property rights are the cornerstone of mRNA drug development. The patent layout and technological accumulation of LNPs can rapidly advance the industrialization of mRNA drugs.

Quanhecheng is currently collaborating with Zhejiang University to develop LNP drug delivery systems, aiming to address the bottleneck posed by domestic LNP patents in China and fill market gaps. The research team has already synthesized over 100 ionizable cationic lipid compounds, achieving technological breakthroughs and mass production of multiple core components. Leveraging specialized purification techniques for unique compounds and years of accumulated expertise, Quanhecheng will accelerate the development of LNP delivery technologies and secure patented technological achievements.

On its analytical testing platform, Quanhecheng has achieved differentiated technological innovation and mass production of core raw materials, including fluorescent probes, dNTPs, and Tris. Meanwhile, the company has expanded the application scope of its fluorescent probes by deploying them in gene sequencing, visualized real-time quantitative PCR (qPCR), in vitro diagnostics, drug screening, and in vivo imaging in small animals.

Currently, Quanhecheng is undertaking the 2022 Tianjin Central Government-Guided Local Science and Technology Development Fund project titled “Research and Application of Biofluorescent Probes in Life Sciences.”

Unlike small-molecule chemical drugs, which have reached maturity in China, oligonucleotide therapies face significant technical barriers in source innovation, drug development and manufacturing, analytical testing, and validation. This potential blue-ocean market is accompanied by complex R&D risks and substantial capital investment. To address these challenges, Quanhecheng’s key competitive advantage lies in its 12 years of deep expertise in nucleic acid-based small-molecule pharmaceuticals.

Distinct from traditional small-molecule CDMOs, Quanhecheng has long centered its operations on customized and innovative services, pursuing an integrated one-stop solution that combines R&D, manufacturing, and process innovation.Leveraging the company’s patented chemical synthesis technology, Quanhecheng remains committed to the production of chemical pharmaceutical intermediates, providing customized R&D and manufacturing services for diverse product categories. Its Quality Control Center has obtained CNAS accreditation.

Quanhecheng possesses unique custom R&D advantages in small-molecule chemical drugs featuring alicyclic and aliphatic chain structures. Its core business focuses on route development and process package supply for small-molecule chemical drug intermediates at gram, kilogram, and ton scales. The downstream derivatives are primarily utilized in the research, development, and production of innovative drugs.

In 2020, Quanhecheng’s revenue from small-molecule chemical drug intermediates exceeded RMB 100 million, marking a new milestone in its business development. In October 2021 and September 2022, Quanhecheng completed its Series A and Series A+ financing rounds, respectively, with a combined total exceeding RMB 100 million. Following the completion and commissioning of its production base, Quanhecheng launched commercial product manufacturing operations, primarily focusing on route scouting for generic drugs, process optimization, and pilot-scale product delivery.

A robust product pipeline and multi-scale manufacturing layout have established Quanhecheng’s self-driven development ecosystem. Entering its third five-year plan, Quanhecheng will integrate industry-academia-research collaboration, technical support, raw material supply, and active pharmaceutical ingredient (API) approval to construct a four-tiered pyramid strategic framework.

Quanhecheng’s Self-Driven Development Strategic Layout

The Small-Molecule Chemical Drug Intermediate and API Innovation Platform serves as the core revenue driver and vital operational engine of the Quanhecheng system, continuously iterating its product portfolio to support the future commercialization and technical implementation of all pipeline assets.

Nucleic Acid Drug Modification and Process Optimization Platform: Covering starting materials for in vitro diagnostics, small nucleic acid drugs, and mRNA drugs, with early engagement and deep integration to build robust reserves for the iteration of commercial production platforms, enhance Quanhecheng’s competitiveness, and create higher output value and profits from limited capacity.

The establishment of platforms for nucleic acid drug discovery, screening and validation, delivery technologies, and analytical testing has enabled the accumulation of iterative technological capabilities. First, it ensures quality control and validation of products on commercialization-ready platforms; second, it provides platform-based services for nucleic acid drug R&D, leveraging accumulated chemical technologies to accelerate the development process of biologics, extending through to the pre-IND stage.

“On the foundation of platform-based basic services, our horizontal expansion boundaries are virtually limitless; chemical synthesis and related product R&D are both areas we can expand into, and we can also extend deeply along the value chain,” introduced Song Yanmin. Through the complementarity of self-driven development and R&D innovation, Quanhecheng has established a strategic layout for sustainable growth.

“Overseas nucleic acid drugs are booming, and the domestic industry has also entered a period of rapid growth.” Song Yanmin noted that COVID-19 brought nucleic acid testing into the public eye, causing nucleic acid therapeutics to suddenly “gain prominence.” Globally, nucleotide raw materials are generally in short supply and remain scarce products. Domestic enterprises should focus on advancing R&D for innovative nucleic acid therapeutics and enhancing their self-sufficiency in production and sales.

Unlike Suzhou’s biomedical innovation cluster, which gathers numerous biotech companies, Tianjin, where Quanhecheng is located, has formed a natural pharmaceutical industrialization cluster.This industrial cluster brings together multiple large-scale domestic manufacturing enterprises, spanning upstream players such as Quanhecheng and Xingborun, midstream CRO WuXi AppTec and CDMO Asymchem, to downstream companies that have achieved industrialized delivery, including Jiankai, CanSino Biologics, and Ringpu Biology.

Following the successful outcomes from Quanhecheng, Innovative Pharma seeks to rapidly achieve industrial scale-up and commercial manufacturing, for which Tianjin offers comprehensive, end-to-end industrial service advantages.

As one of the founding chair entities of the Tianjin Nucleic Acid Alliance, Quanhecheng jointly established the Tianjin (Economic-Technological Development Area) Nucleic Acid Industry Alliance with CanSino Biologics, Ribobio, Xingborun Biotechnology, Asymchem, the State Key Laboratory of Medicinal Chemical Biology, the National Pesticide Engineering Research Center, and Tianjin University of Science and Technology.The secretariat units of the alliance are the Tianjin Economic-Technological Development Area Bureau for the Promotion of the Pharmaceutical and Health Industries and the Tianjin International Joint Academy of Biomedicine.

This Nucleic Acid Industry Alliance comprises four major components: the Information Resources Committee, the Operation Center of the Intellectual Property Committee, the Financial Resources Committee, and the Project Committee. By facilitating information collection, patent layout, and alignment across the demand chain, the Alliance will integrate the upstream and downstream segments of the nucleic acid therapeutics sector, establishing authoritative patent navigation and industry guidance. Leveraging the collaborative platform built by the Alliance, Tianjin’s nucleic acid industry will adopt an open competition mechanism to tackle key challenges, thereby accelerating the industrialization of nucleic acid therapeutics.

“Tianjin currently lacks nucleic acid drug R&D enterprises at the fourth tier. Quanhecheng is striving to fill this gap, dedicated to providing end-to-end technical services for nucleic acid drug discovery, delivery, analysis, and validation,” said Song Yanmin.

Challenges have emerged one after another. Within the natural industrial closed-loop system, there is a severe shortage of R&D talent for oligonucleotide drugs, as well as a critical lack of industrialization technologies, resulting in numerous bottlenecks that need to be addressed. Therefore, Quanhecheng has established industry-academia-research collaborations with universities, partnerships with national key laboratories, and cooperation with upstream and downstream enterprises. Within the year, Quanhecheng will establish its R&D and marketing departments in Shanghai, initiating services and collaborations with more renowned pharmaceutical companies and expanding into overseas markets.

In a 2021 interview with VCBeat, Song Yanmin stated, “Going forward, Quanhecheng will achieve early involvement and deep integration with innovative pharmaceutical projects, keeping key core technologies in our own hands, and making sustained efforts to facilitate the rapid and stable development of the biopharmaceutical industry.”

Over the past three years, Quanhecheng has successfully implemented its raw material layout strategy for “small-molecule chemical drugs + small nucleic acid drugs,” advancing from raw material supply to the synthesis of biologics and active pharmaceutical ingredients (APIs) for small-molecule chemical drugs. Technologically, Quanhecheng has been recognized as a national “Specialized, Refined, Differential, and Innovative” (SRDI) Little Giant enterprise. In terms of business development, it has evolved from a CRO laboratory into a leading enterprise deeply entrenched in its niche sector. Industrially, Quanhecheng has continued to accumulate resources and reserves, expanding from a linear layout based on single pipelines and single technologies to a self-driven, pyramid-shaped ecosystem.

In the face of the dawn of the gene therapy era, Quanhecheng will continue to explore and advance, growing into a significant force in the field of biopharmaceutical research and development.