Anaerobe Biosciences Secures RMB 100 Million Series A Funding Led by Daotong Investment and Chengdu Sci-Tech Venture Capital

Recently, VCBeat learned that Sichuan Yanyang Biotechnology Co., Ltd. (hereinafter referred to as “YANYANG”) has announced the completion of its RMB 100 million Series A financing round. This round was co-led by DaoTong Investment and Chengdu Sci-Tech Innovation Investment, with participation from Chuang Dongfang Investment and Zhongxi Fund. The funds will be primarily used for talent team building, Phase II clinical trials of live biotherapeutic products, research and development of candidate drug pipelines, and the establishment of a bacterial drug production platform.

Leveraging the Key Laboratory of Anaerobic Microbiology under the Ministry of Agriculture, the earliest of its kind established in China, YANYANG has built a proprietary high-throughput screening platform for anaerobic microorganisms (with a monthly isolation throughput of tens of thousands of strains). It has constructed a human anaerobic microbial strain bank covering multiple regions across China (comprising over a thousand species) and established a high-throughput druggability evaluation system for anaerobic microorganisms. Additionally, YANYANG has developed platforms for live bacterial fermentation, concentration, freeze-drying, formulation, and quality control that comply with Good Manufacturing Practice (GMP) requirements. YANYANG now possesses comprehensive capabilities in strain discovery, live bacterial evaluation, process development, clinical trial application, and clinical research, and will continue to focus on the R&D of innovative live biotherapeutic products targeting the human microbiome.

KAL-001, a Class I innovative biologic drug independently developed by YANYANG, “Live Lactobacillus Quadruple Capsules for Vaginal Use,” was obtained through rigorous screening and evaluation from thousands of Lactobacillus strains with independent intellectual property rights. The product has received clinical trial approval for two indications: bacterial vaginosis and postmenopausal atrophic vaginitis. It is primarily used to treat inflammatory diseases of the female vagina, covering most common inflammatory conditions in women. Currently, this candidate has entered Phase II clinical trials, with the first patient enrolled in June of this year. The company has completed pre-IND consultations with the U.S. FDA and plans to formally submit an IND application for KAL-001 within the year. Meanwhile, YANYANG has established a pipeline spanning intestinal inflammation, metabolic diseases, oncology, and other areas. Its first gut microbiome formulation drug is expected to file an IND application in the first half of 2023.

YANYANG places great emphasis on building a multidisciplinary talent team, which has grown to over 100 members, with more than 70% of its R&D staff holding graduate degrees. Following the completion of this financing round, YANYANG will seize the opportunity presented by the rapid global development of the microbiome industry, continue to deepen its expertise in the research and development of innovative live biotherapeutic products, steadily enhance its R&D and commercialization capabilities, and contribute to the advancement of microbiome-based therapies and innovative drug development.

Dr. Cheng Lei, Founder of YANYANG“Sincere thanks to our investors for their support and trust in YANYANG. Microbiome-based therapy for complex and refractory diseases represents a new frontier in innovative drug development, offering novel pathways for disease treatment and health protection. As a pioneer in formulated microbiome therapeutics in China, YANYANG remains committed to addressing unmet clinical needs by building a robust R&D platform that translates microbiome science into medicines, and by establishing a forward-looking and differentiated pipeline. We look forward to working hand in hand with our investment partners to relentlessly pursue our vision of ‘harmonious human–microbiome coexistence and health for all.’”

Wang Dengshan, Head of Founding Shareholders at YANYANG and Director of the Biogas Science Institute under the Ministry of Agriculture“He stated, ‘Anaerobic Biotech is the first high-tech enterprise established by our institute’s outstanding young scientists through equity investment based on the valuation of their scientific and technological achievements. Over the three years since its inception, the company has advanced the R&D of innovative microbiome therapeutics as scheduled, achieved multiple key milestones, and successfully completed several rounds of financing. This serves as a vivid example of our institute’s acceleration of technological innovation and the commercialization of research outcomes. In the current “winter” of the capital markets, the investors in this round have supported and facilitated the growth of Anaerobic Biotech, which not only affirms the team’s progress but also demonstrates strong confidence in the industrialization of anaerobic microbial technologies.’”

Lead Investor of This RoundHuang Ning, Founding Partner of DaoTong Investmentstated: “We are highly optimistic about the microbiome therapeutics sector. The human microbiota, often referred to as the ‘second genome,’ plays a crucial role in maintaining health and controlling the onset and progression of diseases. Under the leadership of its founder, Cheng Lei, and his team, YANYANG has established a repository of over 1,000 species of human anaerobic microorganisms, backed by more than two decades of rigorous and robust expertise in the isolation, preservation, selection, and application of anaerobic microbes. The company has targeted disease indications with clear unmet medical needs and has initially demonstrated promising efficacy in clinical trials. We believe that the company will secure a significant position in the global microbiome therapeutics industry.”

Daotong Investment specializes in early-to-mid-stage investments and mergers and acquisitions in the healthcare sector. Its core team members hail from the healthcare industry, with a proven track record of incubating early-stage startups and managing publicly listed companies with market capitalizations in the tens of billions. Daotong Investment holds distinct competitive advantages in niche segments such as innovative medical devices, healthcare services, and biotechnology, serving as the earliest institutional investor for multiple segment-leading enterprises. Notable portfolio companies include Landin Medical, Deepwise Medical, Triastek, and YANYANG. Daotong Investment has received numerous accolades, including being ranked among the “Top 100 Best Venture Capital Firms in China” by Zero2IPO.

Chengdu Science and Technology Innovation Investment Group was established in March 2021. It is a science and technology innovation investment group set up by the Chengdu Municipal Committee of the Communist Party of China and the Chengdu Municipal People’s Government to align with the new stage of development, implement the new development philosophy, integrate into the new development pattern, and support the construction of the Chengdu-Chongqing Twin City Economic Circle. The company has a registered capital of RMB 10 billion. Through specialized operations, the company focuses on cultivating three core businesses: fund investment, direct investment, and value-added services. It concentrates on the fields of technological innovation and the new economy, fully leveraging the leading and driving role of venture capital in urban technological innovation. This effort supports the coordinated development of Chengdu’s “Two Zones and One City” and promotes the deep integration of industrial chains and innovation chains.

Chengdu Sci-Tech Innovation Investment Group was successfully listed in CVSource’s “Top 10 Emerging Venture Capital Firms in China for 2021,” making it the only venture capital firm from Sichuan and the entire western region to be included on the emerging firms list.

Shenzhen Chuang Dongfang Investment Co., Ltd. (hereinafter referred to as “Chuang Dongfang”) was established in August 2007. It is a professional institution specializing in equity investments in small and medium-sized science and technology innovation enterprises. The total scale of various investment funds under its management exceeds RMB 23 billion, with over 280 cumulative investment projects. On May 13, 2021, Chuang Dongfang was honored with the “Top 20 Best Chinese Venture Capital Firms of 2020” award by Zero2IPO Research. On October 22, 2021, it received the “Top 50 Venture Capital Firms in China 2021” honor from Zero2IPO Group.

Chuang Dongfang primarily invests in sectors driven by foundational technological innovations or innovative applications, including Big IT (AI, big data), Big Health (biotechnology), Big Consumer (tech-enabled consumer goods), and New Manufacturing (hard-tech new materials). Within the Big Health sector, Chuang Dongfang focuses its investments on innovative drugs, innovative medical devices, and consumer healthcare. Representative portfolio companies include Libpath, Venus Medtech, Yiming Oncology, ClearMed, and Boyun Biopharma.

The co-investment fund in this instance is the “Chengdu Xingchuanghe Medical Aesthetics Industry Investment Partnership (Limited Partnership).” This fund was jointly established by two subsidiaries of Chengdu Xingcheng Investment Group—Chengdu Medical Aesthetics Industry Co., Ltd. and Chengdu Xingcheng Hongye Equity Investment Fund Management Co., Ltd.—along with Chenghua District Zhencheng Xinghua Equity Investment Fund Co., Ltd. and China Oriental Asset Management Co., Ltd. It is an industrial fund focused on investing in the upstream supply chain of the medical aesthetics and general health sector.

Zhongxi Fund focuses on early- to mid-stage investments in the healthcare and wellness sector. Its team comprises seasoned investment banking professionals and experts with pharmaceutical backgrounds, specializing in capital operations such as investment and mergers and acquisitions (M&A). The firm has established offices in Hangzhou, Chengdu, and Chongqing, with its business primarily covering the Jiangsu-Zhejiang-Shanghai region and Southwest China.

Zhongxi Fund has consistently adhered to an industry-oriented approach in selecting investment targets. Leveraging its corporate resources, the fund assists portfolio companies in securing follow-on financing, standardizing business operations, and integrating industrial resources. By doing so, it aims to accompany these enterprises through their rapid growth and establish itself as a value creator in the biomedicine and healthcare sector.