Qiming Venture Partners in Dialogue with Jacobi Pharma and CANbridge Pharmaceuticals: How Innovative Biopharma Companies Grow from 0 to 1 and from 1 to 100

December 30-31, 2021: Qiming Venture Partners CEO Cloud Summit Successfully Held.

At the summit, Wang Yinxiang, Founder, Chairman, and CEO of Jacobio Pharmaceuticals; Xue Qun, Founder, Chairman, and CEO of CanSino Biologics; Tang Yanmin, Investment Partner at Qiming Venture Partners; and Chen Kan, Executive Director at Qiming Venture Partners, engaged in an in-depth discussion and exchange on the theme “Innovative Drug Companies: From 0 to 1, From 1 to 100.” Focusing on the challenges faced by innovative drug enterprises during their growth and expansion, they shared insights from both industrial and investment perspectives.

From their sharing, we have summarized the following points:

1. Stay true to your core convictions. The journey of entrepreneurship and business growth is fraught with temptations and challenges; remaining steadfast in your original mission is a prerequisite for success.

2. Only by keeping a close eye on core objectives can one reach the key priorities. While focus may vary slightly across different stages, it is essential to advance toward the originally envisioned endpoint.

3. A team is united by consensus and shared goals. Many startups founded by friends may not go far, but teams built on consensus and common objectives will definitely have cohesion and combat effectiveness.

4. Do not deliberately chase trends. Unlike the internet industry, the life sciences sector does not exhibit exponential growth characteristics; avoid blind bandwagoning, and instead proceed with steady, solid steps to ensure sustainable long-term success.

The complete transcript of the conversation is as follows.

Chen Kan, Executive Director at Qiming Venture Partners:We would like to invite both of you to draw on your own experiences and share some of the challenges you have encountered in scaling up your businesses.

Jacobio’s Founder, Wang Yinxiang: I completed my postdoctoral fellowship in 2003 and returned to China to found Beta Pharma, starting from scratch with a leased 30-square-meter laboratory. As we advanced into the clinical development phase, we had to establish our own manufacturing capabilities, since China did not yet have a Marketing Authorization Holder (MAH) system at that time, requiring all start-up pharmaceutical companies to handle production themselves. In 2006–2007, during Phase II clinical trials, we began building our own production facilities. By 2010, as our product was approaching Phase III clinical trials, we decided to establish our marketing and sales teams.

This is a process of learning by doing, representing the transformation of an enterprise from R&D to production and then to market sales. For pharmaceutical companies, the journey from 0 to 1 is relatively pure and relies primarily on R&D. However, in the phase from 1 to 10, functions such as production and sales come into play, leading to significant differences in internal controls, including management approaches, incentive mechanisms, and performance evaluation metrics.

Since its establishment in 2015, Jacobio has been undergoing a process of building its foundation from the ground up. In terms of internationalization, differences in operational mindsets between China and foreign markets, along with challenges in managing cross-border personnel, have previously presented us with new hurdles.

Xue Qun, Founder of CanSino Biologics:For a startup building from scratch, I believe the greatest challenge lies not in deciding what to do, but in determining what not to do. Before the strategic direction is clearly defined, companies must resist market temptations.

Making decisions about tomorrow and the future based solely on today’s circumstances is often inaccurate; this requires steadfastness. Moreover, securing a strong investor is crucial, as they serve not only as a source of capital but also as like-minded advisors and supporters on the journey of growth.

Chen Kan, Executive Director at Qiming Venture Partners:As an Investment Partner at Qiming Venture Partners, could you share your perspective on these companies from an investor’s viewpoint?

Yanmin Tang, Investment Partner at Qiming Venture Partners:Having been an investor for nearly two decades, I have witnessed the cycle of China’s investment industry from its inception to maturity, and from weakness to strength. From an investment perspective, we maintain specific profiles when selecting projects, with several factors being particularly critical.

First and foremost is the team, with founders holding a substantial stake. The company’s growth trajectory is closely tied to their involvement.

From a personal perspective, entrepreneurs need to have a strong mindset. Entrepreneurship is challenging; from early-stage scientific research and team building to the most difficult issue of commercialization, including the impact of changes in the national policy environment, scientists and founders must possess indomitable willpower, stay committed to their direction, and forge ahead with determination.

Secondly, the technology is advanced. Compared with other companies, Jacobio has a first-mover advantage, having entered the path of first-in-class projects earlier and focusing on the research and development of allosteric inhibitors, ranking among the top three globally. This not only differentiates the company but also serves as one of the prerequisites for reaching agreements with multinational corporations.

Yanmin Tang, Investment Partner at Qiming Venture Partners:What were the biggest challenges during the transition from “researcher” to “entrepreneur,” as well as the company’s growth from a small startup to a larger enterprise?

Jacob Wang, Founder of Jacobio:Team building and management pose the greatest challenges. Although R&D is difficult, it is a field with which we are familiar. In contrast, we have less experience in production and marketing/sales. Fortunately, the overall business environment in China is favorable. For instance, in terms of production, we adopt a hybrid approach—combining in-house manufacturing with partial outsourcing—which provides a buffer zone. However, after expanding overseas, companies face low brand recognition, difficulties in recruiting talent, and significant challenges in sales.

From my personal experience, the leaders of marketing and sales teams are crucial, as they can bring an entire team with them, helping the company get up to speed quickly.

Tang Yanmin, Investment Partner at Qiming Venture Partners:For those who left large pharmaceutical companies to return to China and found small biotech startups, what do you find most challenging to adapt to? And how have you addressed these issues?

Xue Qun, Founder of Canaan Healthcare:This is an excellent question, and we have numerous cases to analyze. From Genzyme to Canbridge Pharmaceuticals, I built a team in China over the past four years. When I returned to China in 2004, Genzyme had low brand recognition in the country, and rare diseases were even less known. It goes without saying that attracting outstanding management talent from multinational corporations to join a relatively obscure company like Genzyme was extremely challenging. Therefore, I have always believed that team building is the most critical core competency for a founder.

At the time, I found it challenging to identify the right entry point. To address this issue, our approach was to pinpoint the appropriate indications and work backward from them—first raising the relevant questions and then seeking solutions, with a focus on the disease itself.

Throughout our collaboration with Canbridge Pharmaceuticals, we have been cultivating an ecosystem and driving the advancement of various policies. For instance, during the drafting of the Drug Administration Law of the People’s Republic of China, we participated in formulating provisions related to rare diseases. I also contributed to the development of the Center for Drug Evaluation (CDE) of the National Medical Products Administration’s clinical guidelines for rare diseases. This represents a highly significant and innovative endeavor for us, one that would be virtually impossible in the United States.

Jacob Wang, Founder of Jacobio:"The true test comes from within, as one cannot be entirely certain of their choices when founding a company."

When we first embarked on our entrepreneurial journey in innovative drug development, even some well-known companies in the industry had not yet taken action, which caused us to waver and feel hopeless. Fortunately, none of us gave up.

When we founded Jacobio, we boldly proclaimed our ambition to become one of the top three companies globally, although we did harbor some initial reservations. Subsequently, we remained steadfast in our strategy of selecting first-in-class projects. In 2022, multiple projects will enter clinical development, with approximately half expected to rank among the top three globally at the Investigational New Drug (IND) stage.

Chen Kan, Executive Director at Qiming Venture Partners:As two seasoned entrepreneurs, with Amy being a highly experienced founder, could you share some advice from your perspective for those biotech founders who are still struggling through the 0-to-1 phase or striving to build their companies?

Jacob Wang, Founder of Jacobio:For founders, it is essential to focus on areas within their expertise. Entering an unfamiliar industry is akin to scaling a mountain; opportunity-driven entrepreneurship carries significant risks. Perceiving an opportunity without possessing domain expertise is a precarious position.

Xue Qun, Founder of Canbridge PharmaceuticalsFirst, exercise caution when dealing with capital during the fundraising process. The influx of hot money often comes with various temptations. Non-professional funds frequently have objectives that diverge from those of the founders; mishandling such discrepancies can lead to significant troubles, as it is easier to invite investors in than to remove them.

Second, biomedical teams undergo significant fluctuations and adjustments at different stages of a company’s development; founders must be psychologically prepared for this. The fact that close friends co-found a venture does not guarantee they will stay together throughout the entire journey. If one prioritizes the comfort of familiarity over timely adjustments and iterations, it will become a bottleneck to the company’s growth.

Lastly, you must do what you truly believe in. Do what you believe; without this conviction, it is difficult to persevere.

Tang Yanmin, Investment Partner at Qiming Venture Partners:Let me share my perspective as an investor. Our fund previously included teams specializing in both IT and BT (biotechnology), and we often compared these two groups. In terms of explosive growth, IT companies can frequently reach a valuation of hundreds of billions within one to two years, whereas biotech firms do not typically scale up to such magnitudes so rapidly.

Meanwhile, the results show that while BT companies rarely experience overnight success, their failure rate is significantly lower than that of IT companies. This highlights an important point: many companies face a tortuous development path, but if they can persevere just a little longer—doing what you believe, as the two speakers mentioned—and overcome this hurdle, they will open up new horizons. This scenario occurs in 70–80% of biotech companies, which is something I particularly want to share with entrepreneurs.

Secondly, as both of you just mentioned, it is essential to operate within your area of expertise. Avoid frequently switching tracks or blindly following trends. Many investors chase so-called emerging technologies despite having only a superficial understanding of them; they often invest in domestic copycat versions merely because similar projects exist abroad. The quality of investments made through such herd behavior is significantly compromised.

Another critical point is the importance of policy. The external environment is a highly complex and ever-evolving landscape. I advise that during periods of relative ease, companies should not fixate too rigidly on valuations; instead, they should strive to build sufficient cash reserves and remain vigilant against potential risks in times of stability.

Finally, we need to take a long-term view and allocate funds reasonably. Even for companies that are already publicly listed, it is essential to look several years ahead. If our business capabilities are insufficient to achieve break-even and establish a virtuous cycle, fundraising will always remain the most critical issue facing the CEO.