Shanghai Innovation Capital: Three Decades of Commitment to Healthcare Investment, Building a Thousand-Billion-Yuan Ecosystem Blueprint
Biopharmaceuticals are hailed as an ever-rising sunrise industry and one of the key arenas in the new round of technological competition. Accelerating the development of a globally influential innovation hub and a world-class biopharmaceutical industrial cluster is a major mission for Shanghai, China’s economic center. In 2022, 11 biopharmaceutical companies from Shanghai were listed on the STAR Market, with half of them and multiple “firsts” attributed to the “national team” in the venture capital sector.
She has long worked diligently behind the scenes in the development of Shanghai’s biopharmaceutical industry. As one of the earliest investors in China’s biopharmaceutical sector, she is not only a pioneer in full-industry-chain investment but also a shaper of industrial development. She has built an impressive biopharmaceutical investment portfolio, with her influence evident behind such star projects as MicroPort MedBot, iRay Technology, Fudan-Zhangjiang Bio-Pharmaceutical, InnoCare Pharma, Obio Technology, South Model Organisms, Medicilon, and Stmicro Biotech.Shanghai's "Sci-Tech Innovation Group."
The “Sci-Tech Innovation Cluster” in Shanghai is a vast entity, jointly composed of the Shanghai Science and Technology Innovation Group, Pudong Science and Technology Innovation Group, Haiwang Capital, and the Shanghai Haiwang Medical and Health Industry Fund.
In the 1990s, the Huangpu River gave rise to the “twin stars” of Shanghai’s venture capital sector: Shanghai Science and Technology Innovation Group and Pudong Science and Technology Innovation Group. In December 2021, approved by the Shanghai Municipal People’s Government, the two state-owned enterprise groups underwent a joint restructuring, officially giving birth to the new Shanghai Science and Technology Innovation Group. It has become the largest investment and management platform for strategic emerging industries in Shanghai, a main force in building Shanghai into a science and technology innovation center, and a top-tier domestic and world-class venture capital platform that matches Shanghai’s ambition to establish a globally influential science and technology innovation center and represents Shanghai in domestic and international competition.
The Group’s market-oriented reforms are also accelerating. Haiwang Capital, established in December 2020 as a subsidiary of the Group, has rapidly emerged as a leading force in hard-tech investment sectors such as integrated circuits, biopharmaceuticals, aerospace, and high-end equipment. Leveraging its strong foundation, top-tier team, solid performance, and industry reputation, it has raised nearly RMB 20 billion in funds. June 2022Haiwang Medical Health Industry FundOfficially launched, continuing to focus on technological innovation in the biopharmaceutical sector, uncovering sustainable investment value, and building the Group’s market-oriented brand in the biopharmaceutical industry.
The investment history of Shanghai’s “Sci-Tech Innovation Cluster” in the biopharmaceutical sector is also a chronicle of the development of innovative drugs in Shanghai and even across China—a testament to strategic perseverance that capitalized on favorable timing, geographic advantages, and human resources. As early as the late 1990s, Shanghai’s “Sci-Tech Innovation Cluster” invested in a batch of biopharmaceutical companies, including Fudan-Zhangjiang Bio-Pharm, Topgen Life Sciences, MicroPort Scientific Corporation, and Shanghai Model Organisms Center, consistently accompanying and supporting the growth of Shanghai’s biopharmaceutical industry. Subsequently, the entire biopharmaceutical sector underwent a prolonged period of stagnation. Factors such as a scarcity of investable targets, a shortage of talent, and the lack of clear exit channels for biopharmaceutical enterprises led capital markets to adopt an “opportunistic” stance toward biopharmaceutical investments. In contrast, Shanghai’s “Sci-Tech Innovation Cluster” maintained its focused and meticulous approach in the biopharmaceutical field for three decades, investing in over one hundred companies and crafting a comprehensive blueprint for the biopharmaceutical industry, thereby emerging as a leader in sector-specific investment. The introduction of Chapter 18A of the Hong Kong Stock Exchange Listing Rules and the fifth set of listing criteria on the STAR Market opened new avenues for the capitalization of innovative biopharmaceutical enterprises, ushering in significant historical opportunities for industrial development. Thanks to years of persistence, Shanghai’s “Sci-Tech Innovation Cluster” has reaped substantial rewards. In 2022 alone, four companies backed by the cluster were listed on the STAR Market: Obio Technology in January, Shanghai Model Organisms Center in March, Innovent Biologics’ partner Yifang Biopharma (Note: Correct entity is Yifang Biopharmaceutical) in June, and MicroPort EP MedTech in August. Additionally, several other companies are in the process of applying for listings.
By persistently pursuing intensive development and implementing comprehensive layout along the biopharmaceutical industry chain, the Shanghai sci-tech innovation investment community has formed its unique investment philosophy. Its investment scope covers all key segments of the biopharmaceutical industry chain, including upstream life sciences, innovative drugs and related R&D services, and innovative medical devices.
InAt the Peak of Its PopularityCXO Industry, the Shanghai Sci-Tech Innovation ecosystem has built a comprehensive ecosystem for biopharmaceutical outsourcing services, distinguishing itself in China’s biopharmaceutical investment landscape. It has successively invested in a cohort of leading companies in niche sectors, including InnoStar, South Model Biology, Obio Technology, ZhenGe Biotech, Bozhi Yanxin, Medicilon, Viva Biotech, Hanbo Ruiqiang, and Juyi Technology. These investments cover nearly all stages of innovative drug and medical device development, from translational research, model animals, drug discovery, preclinical studies, clinical trials, process development, to contract manufacturing.
These enterprises have become a significant force in serving new drug research and development and production, not only across China but also globally, playing a positive role in industrial development and ecosystem building.Taking InnoStar as an example, the companyHas cumulatively served over 530 pharmaceutical and new drug R&D institutions both domestically and internationally, providing more than 7,300 clinical and non-clinical specialized research services,Becoming a Non-Clinical Research ServiceA shining business card for the field.
InUpstream Raw Materials, Equipment, and Instruments for Life SciencesIn this domain, the Shanghai Sci-Tech Innovation Group has consistently upheld the responsibilities of state-owned enterprises, focusing its efforts on critical “chokepoint” areas to address the need for key raw materials and equipment in the research, development, and production of the biopharmaceutical industry. It has successively invested in a cohort of upstream companies, including Lepu Biotech, Yeasen Biotechnology, EcoCyte Bioscience, BeiAnJi, Hanhai New Enzyme, Titan Scientific, Weiran Technology, iRay Technology, and YuanNeng Equipment.
Against the backdrop of the COVID-19 pandemic and Sino-U.S. trade friction, portfolio companies backed by Sci-Tech Innovation Capital have played a significant role in advancing biomedicine and responding to the pandemic, among whichAs Lepu BiotechAs a leader in single-use bioprocessing solutions in China, it provided critical production equipment for the COVID-19 vaccine manufacturing of Sinovac and Sinopharm, breaking through the blockade and monopoly of imported products and providing important support for vaccine supply assurance.
atInnovative Drugs and Novel Therapeutic TechnologiesIn this field, the Shanghai sci-tech innovation ecosystem has proactively laid out strategies for differentiated innovation and cutting-edge technologies, establishing a comprehensive portfolio spanning small molecules, antibody drugs, and ADCs to cell therapy, mRNA, and CGT. It has successively invested in companies such as SwellBio, InnoCare Pharma (Yifang Bio), Weimu Biotech, Origin Therapeutics, Aikera Biopharma, Yili Pharmaceutical, Hengrundaisheng, Tasly Biologics, Progenic Discovery, Qiyu Biotech, Hejing Medicine, and MicuRx Pharmaceuticals.
With the sudden onset of the COVID-19 pandemic, Stemirna, as Asia’s first innovative company in the mRNA industry, provided a Chinese solution for COVID-19 mRNA vaccines.
InMedical DevicesIn this sector, the Shanghai science and technology innovation ecosystem has established a comprehensive presence in medical devices, high-value consumables, and in vitro diagnostics. It has successively invested in innovative medical device companies such as Peijia Medical, MicroPort EP, MicroPort MedBot, United Imaging Healthcare, Esight Medical, Bodong Medical, Meili Weiye, Raykeen, 3D Medicines (Sizhidi Diagnostics), and Disheng Beiken. Many of these enterprises have achieved import substitution and overtaken competitors on bends within their respective fields, providing domestic patients with high-quality, affordable medical products and creating substantial social value.
Leveraging its in-depth expertise and systematic strategic layout in the biopharmaceutical sector, the Shanghai Science and Technology Innovation ecosystem has secured stakes in leading enterprises across multiple biopharmaceutical subsectors. To date, 26 biopharmaceutical companies have successfully gone public, spanning areas such as chemical pharmaceuticals, cell and gene therapy, medical imaging, high-value consumables, in vitro diagnostics (IVD), contract research organizations (CROs), and contract manufacturing/development and manufacturing organizations (CMOs/CDMOs). Among these, 14 are listed on the STAR Market. Additionally, several other companies are in the pre-IPO stage, and the ecosystem has produced multiple “first-of-their-kind” listings. This track record stands out prominently among the numerous healthcare investment institutions in China.
“The First Gene Therapy CDMO Stock”Obio Technology, it is one of the earliest enterprises in China to lay out its strategy in gene and cell therapy CDMO, and is also known as the “water seller” in the cell and gene therapy industry. The company focuses on viral vector CRO/CDMO services, possessing a GMP-grade viral vector manufacturing facility in China and the country’s first GMP industrialization platform for “gene therapy drugs.” To date, Obio Technology has collaborated on more than 100 CDMO projects, with over 50 CDMO projects currently underway, continuously advancing the industrialization of its R&D technologies.
“The First Listed Company in Model Organisms”Nanmo Biotech— It is one of the earliest enterprises in China to develop and provide model animals, having accumulated a resource library of thousands of genetically modified mouse models, with its business covering the entire industry chain of genetically modified model organisms. From establishing the company’s R&D center and expanding resources in other regions to achieving a successful IPO, the Group assisted the company with scientific site selection, arranged listing-related services, and accompanied it throughout its growth journey.
“The First Stock of the Fifth Set of Domestic Medical Device Standards”——MicroPort EP, with its core business focused on the research and development, manufacturing, and sales of various medical devices and equipment related to cardiac electrophysiology interventional diagnosis and treatment. Notably, MicroPort EP is one of the few manufacturers in the global market that has achieved a comprehensive portfolio of both cardiac electrophysiology equipment and consumables. It is also the first Chinese manufacturer capable of providing a complete solution for three-dimensional (3D) cardiac electrophysiology equipment and consumables. Its independently developed Columbus 3D Cardiac Electrophysiology Mapping System is the first domestically produced magnetic-electric dual-location mapping system to receive marketing approval.
"The First X-ray Detector Stock"iRay Technology——It is the first listed company specializing in core components of medical devices on China’s A-share capital market. From its founding in 2011 to its listing in September 2020, it has now become one of the very few X-ray detector companies worldwide that simultaneously master four major sensor technologies—amorphous silicon (a-Si), IGZO, CMOS, and flexible substrates—and possess mass production capabilities.
"The First KRAS Stock"Yifang Biopharma—InnoCare Pharma is one of the most outstanding emerging innovative pharmaceutical companies in China, dedicated to the research and development of novel drugs with independent intellectual property rights targeting major diseases such as oncology and metabolic disorders, and holding global rights to all its products. Currently, InnoCare’s pipeline includes multiple small-molecule candidate drugs for targeted therapy in disease areas such as lung cancer, breast cancer, and gout.
Behind the countless “first-listed stocks” lies the result of Shanghai Science and Technology Innovation Fund’s decades-long dedication to cultivating industries and tackling the toughest challenges.
Recently, the narrative of a “biopharma winter” has gained significant traction, with entrepreneurs and investors alike feeling the chill as the sector navigates a period of capital cooling. Viewed against the trajectory of China’s biopharmaceutical industry, this is an inevitable stage of development. The Shanghai sci-tech innovation community remains steadfast in its original mission, maintains a strong bullish outlook on the future of biopharma, and is committed to weathering market cycles while supporting entrepreneurs on their journey forward.
Throughout years of practice, the Shanghai sci-tech innovation investment community has adhered to the “Three Mosts” investment principle—investing only in the uppermost reaches of the industrial chain, the highest end of the value chain, and the foundational layer of the technological system. Meanwhile, it uses the “Seven Highs” as benchmarks for evaluating projects: high-caliber teams, high technological barriers, high industry entry barriers, high growth rates, high profitability, large market size, and high R&D investment. Only projects that meet these criteria qualify as genuine sci-tech innovation investment targets.
Standing at a new starting point, the Shanghai Sci-Tech Innovation Investment Group will continue to uphold its original commitment to investing in hard technology, creating new brilliance in the high-quality development of the biopharmaceutical industry:
First, we will increase support for the life sciences sector. While the improvement of China’s biopharmaceutical industry ecosystem is unstoppable, there are still many weaknesses in the industrial chain, such as biological reagents in R&D, and chromatography resins/media and equipment in production—these “chokepoint” areas harbor numerous investment opportunities. As a venture capital firm with state-owned background, we will continue to strengthen our layout in the upstream “chokepoint” segments of the biopharmaceutical industry from the perspective of overall industrial development.
Second, we will continue to closely monitor innovative medical technologies. The development of biopharmaceuticals is closely intertwined with the continuous iteration of medical technologies. For emerging technologies such as cell therapy and gene therapy, we will adopt an industry-chain perspective and place greater emphasis on companies that possess core proprietary technologies in upstream areas, such as gene editing.
Third, there is a greater emphasis on returning to commercial value and identifying companies with genuine product strength. Currently, many fields in China still have unmet clinical and healthcare needs. We will focus on whether products can create social value. Innovation is a means, not an end; ultimately, enterprises must serve patients and society.
Emphasizing post-investment value creation has always been a hallmark of the Shanghai science and technology innovation ecosystem. Underpinning this robust post-investment support is a rainforest-like industrial ecosystem fostered by the Shanghai sci-tech innovation community.
It features both industry leaders and a large number of innovative enterprises;
It boasts resources from hundreds of research institutes, as well as a vast network of financial institutions and service providers;
Not only has it established strategic partnerships with the four major exchanges—the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the Beijing Stock Exchange, and the Hong Kong Stock Exchange—but it has also formed comprehensive collaborations with leading securities firms and investment banks.
It has established a collaborative network with numerous funds, including Qiming Venture Partners, Matrix Partners China, and Northern Light Venture Capital, while also boasting the largest fund-of-funds ecosystem in Shanghai.
It features a technology finance service system that integrates loans, guarantees, and incubation, as well as an extensive government service support network;
It boasts strong industrial and government backing, along with a flexible investment mechanism and a market-oriented investment brand.
Xu Luyuan, CFO and Board Secretary of Obio TechnologyHe stated, “Unlike other market-oriented venture capital firms, Shanghai Science and Technology Innovation Group provides enterprises not only with financial support but also with intangible endorsement and comprehensive empowerment across resources, technology, branding, and policy. This includes recommending technical talent, introducing upstream and downstream supply chain resources, and facilitating access to corporate support policies. Being invested in by Shanghai Science and Technology Innovation Group is a significant advantage for us, enhancing our sense of pride, confidence, and industry standing, both in Shanghai and throughout China.”
Fei Jian, Chairman of Nanmo Biotech“I am deeply appreciative of the substantial assistance provided by Shanghai Science and Technology Innovation Group in coordinating matters between our company and government agencies. As they have increasingly invested in biopharmaceutical companies, they established the Haiwang Technology Innovation Alliance, which has created numerous opportunities for collaboration and networking between our company and other biopharmaceutical enterprises.”
Leveraging these advantages, the innovation and industrial ecosystems cultivated by Shanghai’s sci-tech innovation community are helping an increasing number of Chinese biopharmaceutical companies to continuously expand and strengthen their operations, emerging as industry leaders.
“As wide as the sea is for fish to leap, as high as the sky is for birds to fly.” Standing at the forefront of China’s biopharmaceutical industry and alongside Pudong’s 30 years of reform, opening-up, and development, Shanghai’s sci-tech innovation investment community has quietly completed its own 30-year journey in venture capital. Having weathered market fluctuations, it continues to write new legends in the field of venture investment.
For 30 years, our original aspiration has remained unchanged; for 30 years, we have acted with steadfast dedication. Through persistent effort and excellence in execution, a single blueprint has been transformed into a resounding success. Shanghai Sci-Tech Innovation Group has always adhered toIntegrator of Innovative Resources and Shaper of Industrial Development, seize opportunities and forge ahead with determination in the high-level innovative development of China's biopharmaceutical industry, writing a glorious chapter.
Investing in the Greater Health Sector, Jointly Building the Chinese Dream. Through the biopharmaceutical investment landscape of Shanghai’s science and innovation ecosystem, we see not only a series of legendary investment successes but also a true reflection of the steady and long-term development of China’s healthcare industry.