PackGene Biotech Completes Pre-C Round Financing of Several Hundred Million RMB to Accelerate Scalable rAAV Manufacturing Capacity Expansion

Recently, PackGene Biotech (“PackGene”), a leading domestic CDMO in gene therapy, announced the completion of its Pre-C round financing, amounting to hundreds of millions of RMB. The round was led by China Merchants Bank International, with Guangzhou Juguan, under the Guangzhou High-Tech Industrial Development Zone Investment Group, participating as a co-investor. Existing investors, including HongShan, Cathay Capital, Oriza Holdings, Decheng Capital, and Kaitai Capital, continued to increase their stakes. Joywise Capital served as the exclusive financial advisor for this financing round. The proceeds will be used for team building, constructing new production lines and facilities, and continuously expanding the production capacity of recombinant adeno-associated virus (rAAV) vectors for gene therapy.

PackGene Biotech, established in 2014, is a leading gene therapy CDMO in China. Highly focused on the field of rAAV production and with years of dedicated expertise, PackGene has served over 200 renowned gene therapy pharmaceutical companies and research institutions both domestically and internationally, with its service coverage extending to 15 countries and regions. The founding team possesses extensive experience in the gene therapy sector, while the core team brings decades of experience in GMP and commercial-scale manufacturing. The company provides a comprehensive, one-stop solution covering the entire industry chain, including vector construction, process development, GMP manufacturing, and IND filing support. Last October, PackGene’s 1,500-square-meter GMP-compliant AAV production facility became fully operational, and the company was successfully selected as one of the “Rising Stars of Chinese Biopharmaceutical CDMOs in 2020.” In February 2021, PackGene signed a strategic cooperation agreement with Pall Corporation (part of Danaher Group) to jointly advance upgrades in gene therapy processes, accelerating the enablement of gene therapy CMC processes and large-scale rAAV production. Furthermore, PackGene operates an internationally advanced 8,000-square-meter AAV production base that complies with the standards of China’s NMPA, the U.S. FDA, the European EMA, and Japan’s MHLW. This facility is nearing completion and is expected to commence formal operations in the second quarter of this year. With the largest total AAV production capacity in China and industry-leading delivery speeds highly praised by customers worldwide, PackGene continues to solidify its leading position in the gene therapy industry.

Gene therapy can compensate for or edit genetic defects and abnormal genes at the DNA or mRNA level, thereby achieving therapeutic effects. Compared with traditional drugs, gene therapy holds immense application potential for diseases caused by specific genetic factors. In the future, disruptive drugs are expected to emerge in the fields of central nervous system (CNS) disorders, metabolic diseases, and oncology, making gene therapy a curative option for many conditions. According to foreign research reports, the global market size for gene therapy will exceed $10 billion in 2024. After decades of exploration, the era of gene therapy is imminent.

Recombinant adeno-associated virus (rAAV) vectors are regarded as one of the most promising gene therapy vectors due to their superior safety profile, ability to sustain long-term stable expression of therapeutic genes, capacity to target the majority of tissues and organs, and suitability for both local and systemic administration. However, rAAV vector production remains a bottleneck in the global development of the gene therapy industry, owing to the high technical barriers and complexity of viral vector manufacturing processes, challenges in large-scale GMP production, limited manufacturing capacity, and lengthy preparation cycles.

As a leading domestic CDMO provider for gene therapy, PackGene Biotech has always adhered to its core mission of “making gene therapies affordable for the general public,” striving to break through industry bottlenecks and accelerate the rapid development of the entire sector. PackGene possesses scarce large-scale rAAV manufacturing capabilities, with its batch production capacity, delivery quality, and turnaround time ranking first in China and among the top globally. Furthermore, PackGene’s proprietary technologies significantly reduce the production costs of viral vectors, further empowering innovative pharmaceutical companies in China and fueling the takeoff of the gene therapy industry.

Dr. Li Huapeng, Founder and Chairman of the BoardPackGene Biotech stated that, from a global market perspective, AAV gene therapy continues to face challenges such as high process complexity, capacity shortages, and lengthy manufacturing cycles. PackGene Biotech aims to elevate solutions to these challenges to new heights, providing comprehensive support for domestic and international AAV gene therapies across all stages—from early discovery and investigator-initiated trials (IITs) to investigational new drug (IND) applications and Phase I–III clinical-grade rAAV production. By addressing the urgent need for scalable AAV manufacturing, the company strives to fulfill its mission of “making gene therapies affordable for the general public.”

Zhou Kexiang, Managing Director of China Merchants Bank InternationalPackGene Biotech is a company with years of technological innovation and industrialization experience in the AAV field. Its advanced production system has significantly reduced AAV production costs, while its quality control standards are among the highest in the industry. The company enjoys a strong reputation both domestically and internationally. Under the leadership of founder Li Huapeng, PackGene has fostered a corporate culture characterized by diligence, continuous improvement, and pursuit of excellence, enabling it to provide outstanding end-to-end CDMO solutions for gene therapy companies worldwide.China Merchants Bank International (CMBI) is delighted to partner with PackGene Biotech. Through this collaboration, CMBI aims to attract more top-tier talent and provide them with broader development opportunities, jointly driving progress in the gene therapy CDMO sector. Leveraging its advantages as a comprehensive financial institution and its extensive social resources, CMBI will continue to support PackGene Biotech, assisting the company in becoming an internationally influential gene therapy CDMO enterprise.

Guangzhou Juguan FundIt was stated that the High-Tech Zone Group is rooted in Huangpu District and Guangzhou Development District, with its positioning focused on the development and construction of the biopharmaceutical industry. As a frontier sector within the biopharmaceutical industry, gene therapy has experienced explosive growth in recent years, demonstrating its clinical potential as next-generation therapeutics. As a key link in the industry chain, PackGene Biotech has been deeply engaged in AAV vector technology for many years, developing highly competitive vector technologies that have gained high recognition from customers both domestically and internationally. The company will continue to empower customers and drive clinical progress in the field of gene therapy. The High-Tech Zone Group will intervene from the perspective of the full industrialization lifecycle, fostering mutual benefit and common development.

Cao Yibo, Managing Director of HongShan“AAV, as a critical delivery vector in gene therapy, boasts broad application prospects and is one of the areas HongShan is most bullish on. PackGene Biotech has a team imbued with craftsmanship spirit, which has earned high recognition from clients in the scientific research services sector. We believe this spirit will help the company better operate its upcoming GMP production line and continuously drive its growth, which is why we continue to increase our investment.”

Cathay Capital Managing Partner Duan LanchunStating that gene therapy, as a new frontier in disease treatment, represents the most promising direction for life sciences and healthcare in recent years, the speaker noted that the primary challenge currently facing the industry is how to effectively deliver exogenous genes into human cells. PackGene Biotech has remained focused on the research, development, and innovation of AAV technologies, successfully developing highly competitive viral vector processes and packaging technologies that have garnered widespread recognition from leading gene therapy companies both in China and abroad. Furthermore, the R&D and production capabilities of the founding team, coupled with their entrepreneurial spirit, are the key reasons for our firm belief in and continued increased investment in the company. We will continue to support and accompany PackGene Biotech, working alongside Cathay Capital’s global ecosystem partners, such as Sanofi, to drive the continuous advancement of the gene therapy field and bring hope to patients worldwide.

Yang Aiying, Partner at Oriza Holdings (South China)stated, “With the completion of the GMP production line and other significant business milestones, this marks our third consecutive round of additional investment in PackGene Biotech. We are delighted to see PackGene Biotech continuing to advance toward its goal of becoming the most specialized developer and manufacturer of gene therapy AAV vectors, thereby helping more gene therapy companies better develop genetic therapies that benefit ordinary patients.”

Dr. Cui Xiangmin, Founding and Managing Partner of Decheng Capitalstated, “It is a great honor to continue supporting the company in its Pre-C financing round. We are optimistic about the company’s prospects in the gene therapy CDMO sector and have strong confidence in its growth trajectory since its establishment.”

Mr. Chang Nannan, Partner at Kaitai CapitalWe are honored to have served as PackGene Biotech’s first institutional investor, witnessing the team overcome numerous challenges to build a gene therapy CDMO platform. We also extend our heartfelt gratitude to the friends who have consistently supported the team, and to the team members for their dedicated efforts.

Li Yishi, Partner at Hylink Capital“We are honored to have assisted PackGene Biotech in completing this round of financing. As a groundbreaking technology, gene therapy boasts broad and highly attractive application scenarios. However, due to the significant technical barriers associated with vector optimization and large-scale manufacturing, viral vector production has become a bottleneck for industry development, with most domestic companies still in their early stages. As a leading gene therapy CDMO in China, PackGene Biotech will leverage its robust large-scale manufacturing capabilities to empower innovative pharmaceutical companies in China and drive the rapid development of the entire gene therapy sector. We are privileged to grow alongside PackGene Biotech and witness the industry’s leap forward.”

CMB International is a wholly-owned subsidiary of China Merchants Bank, tasked with leveraging the vast emerging financial market in China through dual linkages between onshore and offshore operations, as well as between investment banking and commercial banking. CMB International has established a comprehensive business layout in private equity investment, investment fund management, mezzanine fund management, cross-border capital operations, and other innovative financial services. It is committed to building a high-quality integrated investment platform and alternative asset management platform under China Merchants Bank through development, transformation, and innovation. Since its establishment, CMB International has accurately grasped industry trends and led or participated in numerous prominent investment cases, establishing itself as a leading private equity investment institution in China.

Guangzhou Juguan was established on November 12, 2020. It is a fund company invested and set up by Guangzhou Guoju Venture Capital Co., Ltd., a subsidiary of Guangzhou High-Tech Industrial Development Zone Investment Group Co., Ltd.Founded in 1984, Guangzhou High-Tech Industrial Development Zone Investment Group Co., Ltd. is one of the earliest state-owned enterprises directly affiliated with the Guangzhou Development District. It has since developed into a large-scale state-owned enterprise integrating investment in biopharmaceuticals and life sciences, industrial park investment and operational management services, urban renewal services, modern service industries, technology finance, as well as inspection, testing, and manufacturing. The group oversees nearly 30 wholly-owned direct subsidiaries, including Guangzhou International Bio Island Co., Ltd., Guangzhou Institute of Microbiology Co., Ltd., Guangzhou High-Tech Zone Investment Holding Co., Ltd., Guangzhou Gaoxin Construction and Development Co., Ltd., and Guangzhou State-Owned Huangpi Agricultural, Industrial and Commercial United Company. It has also made equity investments in companies such as Akeso Biopharma, Ribes Pharma, Bostong Therapeutics, Guangzhou Biomanufacturing Training Academy, and South China Center for Innovative Pharmaceuticals. Additionally, it acted as the purchasing and construction agent for Lonza, the global CDMO leader, in the development of the Guangzhou Bio-industry Park. By the end of 2020, the group’s total assets amounted to nearly RMB 40 billion, with its asset scale, economic performance, and comprehensive strength ranking among the top state-owned enterprises in the Guangzhou Development District.

Sequoia has always been committed to helping entrepreneurs build enduring, great companies, bringing rich global resources and valuable historical experience to its portfolio companies. Over the past 49 years, Sequoia has invested in numerous innovative enterprises and leaders shaping industry trends. As “the entrepreneur behind the entrepreneurs,” HongShan focuses on investment opportunities in three key sectors: TMT, healthcare, and consumer goods/services. Over the past 16 years, HongShan has invested in nearly 600 companies characterized by distinct technological advantages, innovative business models, and high growth potential.

As a professional investment institution with the most extensive global industrial resources, Cathay Capital shares knowledge and business opportunities through its unique global ecosystem. Established in 2006, Cathay Capital currently manages over USD 4 billion in assets and has invested in more than 180 companies across four continents. It primarily focuses on highly innovative companies with strong growth potential in sectors including consumer goods, TMT (Technology, Media, and Telecom), healthcare, automotive and mobility, energy, fintech, and high-end manufacturing. The firm has identified and invested in dozens of high-quality enterprises such as Suofeiya Home Collection, Zbom Home Collection, Meinian Onehealth Healthcare, Moncler, Botian Environment, AiHuiShou (Aihuishou), JD Logistics, Deerma, and Zongteng Network, as well as star unicorn projects like Momenta, Pinduoduo, Chime, Genki Forest, Drivy, Glovo, and Sidecar, accompanying them as they grow into industry leaders.Over its 15-year history, Cathay Capital has received continuous support from a diverse base of global investors, including sovereign wealth funds from China, Europe, Southeast Asia, and the Middle East; Fortune Global 500 companies; established family offices; and mainstream financial institutions such as banks and insurance companies. Nearly half of the companies listed in France’s CAC 40 Index are long-term investors in Cathay Capital.Cathay Capital maintains offices in Paris, Shanghai, Beijing, New York, San Francisco, Munich, Tel Aviv, and Singapore. Its global team of over 100 investment professionals leverages multicultural perspectives and a global vision, combining unique business models, value-added strategies, and deep local networks and resources to serve both investors and portfolio companies, identifying and nurturing the next generation of world-class enterprises.

Decheng Capital, established in 2012, is a venture capital firm dedicated to the healthcare and medical sectors. Seizing the historic opportunity presented by the rapid growth of China’s healthcare industry and the revolutionary innovations in global life sciences, Decheng Capital provides financial and strategic support to entrepreneurs, founders, and inventors. The firm maintains offices in Silicon Valley and New York in the United States, as well as in Shanghai, China.

Oriza Holdings is a market-oriented, specialized early-stage equity investment platform that focuses on investment opportunities in start-up and growth-stage enterprises within the TMT and Healthcare sectors. Its six funds have a total scale of approximately RMB 3.4 billion, comprising both VC funds and angel funds targeting the six major regions of Beijing, Shanghai, Guangzhou, Shenzhen, Suzhou, and Hangzhou. By the end of 2019, Oriza Holdings had invested in and managed over 100 innovative companies, including Tianzhun Technology (688003), Jiangsu Beiren Robot (688218), Cambricon Technologies (688256), Topway, Boluo Bao Light Novels, Ascentage Pharma (06855), CStone Pharmaceuticals (02616), Biocytogen, Ideallab, JW Therapeutics, BioCytoGen, Osida, KeBang Gene, iSmile, Ruipai Medical, Dingke Medical, Huihe Medical, RootPath, AnjiSheng, and PackGene Biotech.

Kaitai Capital, established in 2009, is a professional venture capital management firm primarily engaged in innovation investment, industrial investment, and wealth management. Currently, Kaitai Capital manages assets exceeding RMB 50 billion, with four core investment sectors: pharmaceuticals and biotechnology, digital health and digital medicine, artificial intelligence and the digital industry, and community innovation and consumption upgrading.

Tengye Venture Capital focuses on early-stage investments in high-tech innovative enterprises. It manages six funds and has invested in over 30 companies. Tengye Venture Capital boasts a professional investment management team with deep industry expertise, dedicated to identifying outstanding teams and startups with core technologies and product accumulation in emerging industries, while leveraging extensive industry resources to support corporate growth. Its investment sectors include biopharmaceuticals and healthcare, TMT (Technology, Media, and Telecom), new energy and environmental protection, as well as advanced manufacturing and high-end equipment. Notable portfolio companies in the healthcare sector include Gan & Lee Pharmaceuticals, Liuhe Ningyuan, PackGene Biotech, Jiabao Renhe, Jinshi Biology, Yudao Biology, Ketu Medicine, Guangwei Pharma, Zhongjing Pukang, TrueOmics, and Northland Biosciences.

Haoyue Capital was founded in January 2014, dedicated to serving as a bridge connecting China’s healthcare sector with capital. Its research and transaction coverage spans multiple sub-sectors, including biopharmaceuticals, innovative medical devices, in vitro diagnostics (IVD) and precision medicine, healthcare services, and smart healthcare. The Haoyue Capital team comprises senior investment bankers with extensive experience in China’s healthcare industry. By closely monitoring market dynamics and investment trends in the healthcare sector over the long term, the firm releases weekly healthcare investment newsletters and thematic research reports, offering Haoyue’s perspectives on new policies and emerging frontiers.

Grandall Law Firm (Shanghai) provided full-process legal services for this financing.