Zhidao Bio Completes Over RMB 100 Million Series C Financing to Advance Innovative Protein Design and Manufacturing Platform

Recently, Leto Laboratories (hereinafter referred to as "Leto Laboratories") announced the completion of its Series C financing, with a funding scale exceeding RMB 100 million.This funding round was led by Zhongguancun Science City Company, with participation from Infinity Capital and Hibiscus Capital. The proceeds will primarily be used to support the clinical development of Leto Laboratories’ next-generation anti-tumor cytokine drug, LTC004, and to make early-stage investments in the company’s GMP manufacturing platform.

Previously, Leto Laboratories had received investments from institutions including Sherpa Capital, Mofang Capital, Qirong Venture Capital, and Huaige Capital. In October 2020, the company completed an over RMB 100 million Series B financing round jointly invested by Yijing Capital and Qiaojing Capital, while also securing strategic investment from industry player Junshi Biosciences. Subsequently, in July 2021, it obtained nearly RMB 100 million in exclusive Series B+ financing from China Securities Co., Ltd.

Founded in 2014, Leto Laboratories is a biotechnology company dedicated to foundational technologies in protein engineering, building an efficient, high-quality, and high-market-value platform for biomacromolecule design, as well as a unique prokaryotic biomacromolecule manufacturing technology platform.

In terms of biomacromolecule design platforms, Leto Laboratories has establishedFour Core Technology Platforms: Target Discovery and Protein Molecular Engineering Design, High-Throughput Protein Screening and Activity Characterization, Druggability Optimization of Protein Therapeutics, and Clinical Development. The platform-based development strategy has endowed Leto Laboratories with robust capabilities in product and pipeline expansion. Advanced molecular design concepts, combined with rapid and powerful protein screening and manufacturing capabilities, enable Leto to quickly validate innovative protein molecular design hypotheses and bioactivity, break through existing patent barriers, and effectively reduce R&D project costs.

The construction of platform capabilities and an R&D philosophy driven by market and industrialization needs have established Leto Laboratories’ core competitiveness in developing a pipeline with high commercial value and high druggability. Currently, Leto Laboratories has entered into collaborations with more than ten drug development pipelines with renowned pharmaceutical companies such as Tonghua Dongbao, Junshi Biosciences, Hansoh Pharmaceutical, and Qilu Pharmaceutical, generating recurring revenue through milestone patent licensing fees and royalties based on post-launch sales.

Recombinant protein production is the foundation and core competitiveness of the modern biopharmaceutical industry, with self-reliance and controllability being a crucial aspect of national strategic security. In terms of manufacturing process development platforms, Leto Laboratories has creatively developed a directed protein refolding technology based on prokaryotic cells (such as Escherichia coli) to address the issues of low yield and high production costs in current commercial protein production. This technology first expresses recombinant proteins as inactive inclusion bodies in prokaryotic cells, and then uses Leto Laboratories' proprietary directed protein refolding technology to refold the proteins into their active forms.

Leto Laboratories is one of the very few companies in China capable of developing and scaling up protein denaturation and refolding technologies, boasting significant technical barriers. It has established an independent and controllable technology system, achieving self-sufficiency and domestic production for all upstream strains and downstream materials and enzyme raw materials related to manufacturing. By the end of 2022, Leto had collaborated with multiple renowned pharmaceutical companies on the development of prokaryotic directed refolding processes for nine new drug pipelines, with some of these pipelines already entering clinical trial stages.

Furthermore, Leto Laboratories’ protein manufacturing technology system possesses unparalleled inherent advantages in addressing high-value protein raw materials that have been subject to foreign industrial restrictions within the industry. Over the past two years, Leto has proactively developed a portfolio of high-quality, high-activity raw material proteins and production enzymes. Large-scale industrial production has already been achieved, with a commitment to helping domestic industry players break their dependence on these imported protein raw materials and aiming to further replace foreign products in the international supply chain. Currently, the promotion and investment attraction for these related protein raw material products are progressing steadily.

Notably, in 2022, Leto Laboratories entered into a strategic partnership with Huaguan Biology to jointly develop a new platform for the manufacturing of green chemicals. This initiative marked Leto’s first foray into the field of synthetic biology, leveraging its proprietary platform technologies. Both parties are committed to addressing critical bottlenecks in enzymatic chemical synthesis through robust inter-enterprise collaboration, thereby driving further technological innovation with the aim of propelling China’s biomanufacturing industry from a position of catch-up to one of global leadership.

In advancing its proprietary pipeline, the Leto Laboratories team has been deeply committed to the cytokine sector, leveraging over a decade of experience in designing cytokine-like proteins and its robust capabilities in high-efficiency protein engineering design and molecular validation.Within just two years, secured licensing and collaborative development deals worth billions of yuan for two cytokine products, and obtained clinical trial approval for an independently advanced cytokine pipeline.

Among these, the project with the most rapid progress is LTC004, a cytokine pipeline candidate that was approved in September 2022 for Phase I clinical trials in China. The approval permits clinical trials evaluating LTC004 as a monotherapy administered intravenously for the treatment of malignant tumors. This molecule is a novel cytokine design that diverges from conventional engineering strategies. Leto Laboratories has pioneered an alternative approach, developing the LTC004 molecule based on its proprietary understanding of cytokine biology and unique design principles. Owing to this innovative design, LTC004 demonstrates efficacy several times greater than that of wild-type interleukin-2 (IL-2), while its toxicity is less than one percent of that reported for NKTR-214, an IL-2 pipeline candidate. The clinical performance of LTC004 is highly anticipated.

Dr. Wei Zhang, Founder of Leto LaboratoriesLeto Laboratories stated: “Leto Laboratories is a biotech company dedicated to foundational technologies in protein engineering, showcasing its robust capabilities in macromolecular design and manufacturing through a platform-based approach. Our unwavering goal is to narrow the gap between China and the global forefront of life sciences with advanced protein technologies, positioning ourselves as a global leader in protein science research. The diversified, platform-driven development strategy enables Leto Laboratories to achieve more stable growth.”

In the field of drug development, particularly in oncology, there is a pressing need for novel, breakthrough therapeutic modalities. Immunomodulatory strategies centered on cytokines, which combat cancer by activating the patient’s own immune system, represent a genuine approach to enhancing anti-tumor immunity and hold significant potential for curing cancer. This explains why multinational pharmaceutical companies (MNCs) have been heavily investing in this sector in recent years. While this strategy offers advantages such as broad-spectrum anti-cancer activity and durable efficacy, its druggability is constrained by concomitant immune-related toxicities. Therefore, engineering cytokines to achieve a wider therapeutic window has become a key objective for many pharmaceutical companies. Currently, LTC004 has demonstrated encouraging anti-tumor effects in experimental data, both as monotherapy and in combination regimens. Based on current efficacy and toxicity profiles, LTC004 stands out as one of the few molecules with the potential to deliver breakthrough achievements in the cytokine agonist space.

Zhu Ping, General Manager of Zhongguancun Science City CompanyIndicates“Leto Laboratories is a national high-tech enterprise that has mastered core technologies in recombinant protein design and production, as well as manufacturing processes, enabling high-efficiency design and low-cost production of protein-based therapeutics, raw materials for diagnostic reagents, industrial enzymes, and other products. The investment in Leto Laboratories represents a strategic move by Zhongguancun Science City to strengthen its layout in the biopharmaceutical industry, particularly in the biomacromolecule sector. Characterized by environmental sustainability and high revenue per unit area, the biomacromolecule industry will be a key focus for future development, leveraging Leto Laboratories’ design and production capabilities. As patient capital, Zhongguancun Science City is committed to partnering with Leto Laboratories to forge ahead and create a brilliant future together!”

Zhong Xiangzhang, Investment Director at Infinity Capital“It is stated: ‘Leto Laboratories is an innovation- and R&D-driven high-tech biotechnology platform company. Its R&D team, led by Dr. Wei Zhang, specializes in foundational technologies in protein engineering, which are applied to the development of recombinant protein therapeutics, including peptides, cytokines, and enzymes. The company boasts several technology platforms with international competitive advantages. Multiple innovative drug pipelines have been licensed out to numerous large pharmaceutical companies both domestically and internationally, generating substantial upfront and milestone payments. We are delighted to partner with Leto Laboratories and hope that its innovative drug candidates will progress smoothly through clinical trials, achieve market approval as early as possible, and benefit more patients at the earliest opportunity.’”

Cai Yaoting, Partner at Hibiscus Capital“Leto Laboratories is an innovation- and R&D-driven, high-tech biotechnology platform company. It has independently developed a high-throughput protein refactoring screening and purification technology platform that addresses key bottlenecks and barriers in biopharmaceutical development. The company has a proven track record of successful license-out deals, and its pipeline candidates hold significant market potential.”

Beijing Zhongguancun Science City Innovation Development Co., Ltd. (hereinafter referred to as “Zhongguancun Science City Company”) was established in May 2019. It is a market-oriented operational platform funded by the Haidian District Committee of the Communist Party of China and the Haidian District People’s Government, dedicated to supporting the development of the industrial ecosystem in Zhongguancun Science City through service provision and investment. With a registered capital of RMB 6 billion, the company focuses on core businesses including industrial platform services, industrial investment services, and international cooperation services. Leveraging market-based mechanisms and collaborating with third-party resources, the company provides specialized, multi-dimensional services to innovation entities in Zhongguancun Science City, thereby promoting the optimization of its industrial ecosystem.

Infinity Capital Management Co., Ltd. (hereinafter referred to as “Infinity Capital”) is an equity investment platform under Huafa Group, a leading state-owned enterprise in Zhuhai and one of China’s Top 500 Enterprises. It also serves as the core entity for the Greater China operations of Infinity Group, a renowned investment management firm originating from Israel. The company primarily manages onshore RMB funds and cross-border M&A activities, with a presence in more than ten cities across China and abroad. It has established five major business regions: North China, East China, South China, Southwest China, Hong Kong, and Overseas. Infinity Capital has made strategic investments in key sectors including TMT (Technology, Media, and Telecommunications), healthcare and life sciences, energy conservation and environmental protection, advanced manufacturing, and new materials. Notably, it has successfully facilitated the listings of Digital China (HK0861), Digital China Information Service (SZ000555), Will Semiconductor (SH603005), Lianluo Interactive (SZ002280), and Baozun Inc. (BZUN) on the Hong Kong Stock Exchange, A-share market, and U.S. stock market. In recent years, the company has achieved sustained and stable investment performance, with ten portfolio companies successfully going public: Yongsheng Medical (HK01612), Asymchem (002821), Huati Technology (603679), Liancheng Precision (002921), Lihu Shares (300694), Lanjian Intelligence (688557), New Fengguang (688663), Chuangyao Technology (688259), Silinjie (688115), and Haichuang Pharma (688302). Additionally, Hongtu Separator and IOPtima were acquired by listed companies Kingwon Electric (300510) and Kanghong Pharmaceutical (002773), respectively.

Hibiscus Capital is a professional venture capital firm composed of successful entrepreneurs and financial professionals, dedicated to investing in high-growth, high-tech enterprises. The firm primarily focuses on investments from Series A to Pre-IPO rounds, leveraging its team’s extensive experience in growth-stage projects to target companies in rapidly expanding industries. Its investment strategy centers on the technology and healthcare sectors, with notable healthcare portfolio companies including Pillars and Laekna Therapeutics. Additionally, Hibiscus Capital empowers its portfolio companies by leveraging its robust network of strategic partnerships.