Behind China's Medical Stars: The Innovation Incubator Powering Pioneers Like InnoCare and Genetron Health Files IPO Prospectus
In 2020, the novel coronavirus spread across China. Affected by the pandemic, many companies adopted remote work models, while others became “first responders” by resuming operations early to combat the virus. Currently, all of the more than 80 high-tech innovative enterprises stationed in the PKU Healthcare Innovation Valley in Changping District, Beijing, have fully resumed operations.
PKU Healthcare Innovation Valley
On the morning of April 7, Cai Qi, a member of the Political Bureau of the CPC Central Committee and Secretary of the Beijing Municipal Party Committee, led a delegation to InnoCare Pharma, located within the PKU Healthcare Innovation Valley, for an inspection tour. He visited the laboratories to gain insights into the progress of research, development, and production. Upon learning that the company had secured eight global invention patents in the treatment of oncological and immune diseases, Cai Qi urged the enterprise to continue strengthening its scientific and technological breakthroughs, produce more original achievements and major innovations, and strive to become a leading biopharmaceutical company. He emphasized that local governments and relevant departments should provide proactive services and policy support, help resolve practical issues, and create a favorable environment for the company’s stable development.
Among the enterprises visited and surveyed by Cai Qi, InnoCare Pharma (HKEX Stock Code: 09969) stands out as a star company. Co-founded by Professor Shi Yigong, a world-renowned structural biologist, and Dr. Cui Jisong, an outstanding executive in the biopharmaceutical industry, the company focuses on the development of Class I novel drugs for the treatment of oncology and autoimmune diseases. Notably, it became the first biopharmaceutical technology stock in 2020 to list on the Hong Kong Stock Exchange through a “cloud roadshow” and “virtual bell-ringing” ceremony. Beijing InnoCare Pharma Technology Co., Ltd., a prominent name in China’s new drug development circle, is located in the southeast corner of the PKU Healthcare Innovation Valley in Changping District, Beijing. Dr. Cui Jisong, Co-founder, Chairman, and CEO of the company, mentioned in an interview that InnoCare Pharma relocated to the PKU Healthcare Innovation Valley in 2017 because the area is a hub for pharmaceutical R&D institutions, gathering companies engaged in cutting-edge technology development, and its laboratory buildings meet the specific requirements for ceiling height and floor area needed for new drug R&D laboratories.
At PKU Healthcare Innovation Valley, there are numerous promising companies worthy of attention. One such example is Genetron Health, a company specializing in precision oncology diagnosis and treatment, which entered into a strategic cooperation agreement with InnoCare Pharma in early 2020. As one of the earliest tenants at PKU Healthcare Innovation Valley, Genetron Health serves as a typical case of an enterprise incubated within the valley.
Genetron Health
In September 2014, on the eve of the opening of the PKU HealthCare Innovation Valley Beijing Park, Genetron Health, after gaining an understanding of the park’s basic conditions, recognized that its infrastructure and available resources were highly aligned with the company’s future development direction. Consequently, in 2015, Genetron Health officially settled into the PKU HealthCare Innovation Valley Beijing Park, where it subsequently established a multi-technology platform R&D center and a medical testing laboratory. Since then, the company has gradually developed numerous internationally leading innovative technologies and products, including the “One-Step Method” and “Mutation Capsule.”
Genetron Health Next-Generation Sequencing Laboratory
Genetron Health has experienced robust and continuous growth. In 2016, it received approval from the National Development and Reform Commission (NDRC) to establish a “Demonstration Center for the Application of Genetron Genetic Testing Technology.” During the same year, it was jointly awarded the “High-Tech Enterprise Certificate” by the Beijing Municipal Science & Technology Commission and other departments, and partnered with Thermo Fisher Scientific to co-establish a Joint R&D Center for Precision Medicine. Subsequently, in 2017, three of its in vitro diagnostic (IVD) products obtained Medical Device Registration Certificates, and its medical laboratory’s next-generation sequencing (NGS) platform successfully achieved dual accreditation from the internationally recognized College of American Pathologists (CAP) and Clinical Laboratory Improvement Amendments (CLIA).
In 2018, Genetron Health achieved significant breakthroughs in basic scientific research, publishing three high-impact papers in the prestigious academic journals *Cancer Cell* and *Nature Communications*. In the first half of 2019, the results of its collaborative cancer early screening research with the National Cancer Center were published in the world-renowned academic journal *Proceedings of the National Academy of Sciences of the United States of America (PNAS)*. This innovative achievement in early liver cancer screening, targeting high-risk populations such as hepatitis B virus carriers, has been recognized in the *Progress and Updates on National Major Science and Technology Projects in the Medical and Health Sector* issued by the National Health Commission. Clinical translation and product commercialization are also being actively advanced.
Amid the widely acknowledged capital winter, Genetron Health has still won the favor of numerous domestic and international investment institutions by virtue of its own strength. At the end of 2019, Genetron Health announced the completion of a new round of financing exceeding RMB 500 million, led by VIVO Capital, CICC Healthcare Investment Fund under CICC Capital, and Alexandria Venture Investments, with participation from Hui Capital and existing shareholders.
Furthermore, leveraging its exceptional translation capabilities, Genetron Health had four IVD products based on the NGS platform approved by the National Medical Products Administration (NMPA) for clinical use between the second half of 2019 and the first half of 2020. To date, the company has built a comprehensive IVD product portfolio across three major technology platforms—NGS, dPCR, and qPCR—with a total of seven IVD products approved, making it the enterprise with the highest number of approved IVD products in the field of tumor molecular diagnostics.
As the industry has matured, Genetron Health has actively participated in the development of industry standards. Recently, in collaboration with regulatory bodies such as the Beijing Clinical Laboratory Center, the company played a key role in formulating China’s first expert consensus on the standardized clinical application of tumor next-generation sequencing (NGS)—the “Beijing Expert Consensus on the Standardized Application of High-Throughput Sequencing Technology in Clinical Laboratory Testing (First Edition: Oncology Section)”—and was listed first in the acknowledgments for its outstanding contributions.
Genetron Health’s series of achievements are attributable not only to its corporate spirit of “Explore, Discover, Apply, Transform,” but also to the support provided by PKU Healthcare Innovation Valley.
When initially selecting PKU HealthCare Innovation Valley, Genetron Health prioritized its infrastructure and technical resources.
Genetron Health’s primary consideration lies in infrastructure. According to Genetron Health, the scientific laboratory spaces provided by PKU Healthcare Innovation Valley meet the company’s requirements for medical testing laboratories and production facilities. The park’s laboratory buildings comply with Good Laboratory Practice (GLP) standards for biomedical research and current Good Manufacturing Practice (cGMP) requirements for pilot-scale production workshops. Each laboratory building is equipped with an independent utility system, including dual-circuit power supply, exhaust ventilation, wastewater treatment, and cooling/heating sources. The park’s high-standard infrastructure satisfies Genetron Health’s comprehensive needs across the entire workflow, from R&D, production, and testing to warehousing and waste liquid disposal.
In addition to infrastructure, Genetron Health also values the technical resources behind the PKU Healthcare Innovation Valley. The Innovation Valley can provide Genetron Health with abundant scientific research resources from Peking University and the Peking University Health Science Center, shared equipment worth hundreds of millions of yuan, and guidance from hundreds of experts. Furthermore, the Innovation Valley can fully unleash its resources through collaboration, offering Genetron Health efficient resource matching to rapidly achieve the transformation of industry-academia-research outcomes.
Entrepreneurs often say that the first few years are the most challenging. When Genetron Health entered PKU Healthcare Innovation Valley, it had been established for only a year and a half, precisely during its most difficult phase. While the hardware facilities at PKU Healthcare Innovation Valley indeed addressed Genetron Health’s essential needs for development, the company still faced numerous challenges, such as how to obtain necessary corporate qualifications, where to recruit technical talent, how to engage with the capital market, and how to build upstream and downstream industry chains.
During the application process for certain corporate qualifications, Innovation Valley assisted Genetron Health in establishing connections with government departments such as fire safety and environmental protection agencies, and provided feasible information and recommendations. This helped secure time for the approval of corporate qualifications and improved the efficiency of the approval process. The industrial park also regularly conducts presentations and interpretations of various government policies to answer enterprises’ questions and clarify doubts, thereby preventing them from falling into policy misunderstandings.
Genetron Health has a long-term need for staff augmentation amid its accelerated development. In this regard, the implementation of the Talent Services Program by PKU Healthcare Innovation Valley has helped the company engage with nearby universities such as China Agricultural University and Tianjin Medical University to connect with outstanding graduates. It has also organized symposiums with students in collaboration with the Peking University Health Science Center, providing additional opportunities to address the company’s staffing needs. As a result, Genetron Health’s talent pipeline during its rapid expansion has been fully secured.
At numerous events within the park, including the Doctoral Salon, entrepreneurship services, talent services, and project roadshows, Genetron Health has engaged in dynamic exchanges with investment institutions, third-party platforms, universities, and research institutes. These interactions have helped identify needs, address development challenges, and facilitate financing, thereby providing significant support to a wide range of small and medium-sized enterprises.
Since its opening in 2014, PKU Healthcare Innovation Valley has accumulated a portfolio of innovative clients and attracted experts and scholars from both China and abroad. The talent pool currently includes 7 academicians from China and the United States, 5 recipients of the Beijing Overseas Talents Aggregation Project, over 100 industry experts, more than 100 overseas-returnee professionals, and over 700 individuals holding master’s or doctoral degrees.
Genetron Health’s needs for upstream and downstream industrial support during its development have been addressed within the industrial ecosystem layout of PKU Healthcare Innovation Valley. Centered on the precision medicine industry chain, PKU Healthcare Innovation Valley has strategically arranged its upstream and downstream sectors, introducing companies with diverse positioning to foster a small-scale innovative enterprise ecosystem within the park. This ecosystem itself serves to promote industrial and corporate development. Along this industry chain, basic scientific research is supported by Peking University Health Science Center; the upstream segment includes high-throughput sequencing technologies, sequencers, and testing kits; the core business focuses on genetic testing services; and the downstream segment encompasses cell therapy, big data interpretation, and other areas, resulting in a well-rounded layout.
Supported by industrial chain incentives spanning the entire process, a series of genetic testing service companies, including Genetron Health, Geneseeq, Kayou Diagnostics, Bestno, and New Horizon Health, have rapidly grown. Meanwhile, these companies each focus on different aspects of testing content, and some products have already been launched, such as Genetron Health’s IDH1/TERT kit and New Horizon Health’s Changweiqing series.
Such a series of advantageous conditions has attracted a cluster of high-quality startups to the PKU Healthcare Venture Valley. The mutual exchanges among these startups within the park have fostered a vibrant entrepreneurial atmosphere. In addition to spontaneous interactions between enterprises, the park regularly brings together industry stakeholders—including companies, physicians, researchers, and investment and financing institutions—to jointly discuss industry policies, address technical challenges, and explore new business opportunities, thereby providing broader spaces for industry exchange and business collaboration for the enterprises within the park.
In recent years, to fully mobilize and stimulate the innovation drive of various enterprises and promote the deep integration of professional incubation services with venture capital, PKU Healthcare Innovation Valley has established incubation and venture capital funds. Leveraging the park’s operational management and project incubation capabilities, and guided by an international perspective and cutting-edge market trends, the initiative focuses on four key sectors: innovative medical devices, biopharmaceuticals, molecular diagnostics, and digital health. It is committed to driving innovation through venture investment, maker incubation, and the commercialization of scientific achievements, with the mission of channeling the most advanced medical technologies back to Peking University and its affiliated healthcare system, as well as benefiting the general public and society. Currently, the venture capital fund has invested in multiple high-potential projects, such as BeiHeng Bio, a pioneer in universal CAR-T therapy representing the next generation of cellular immunotherapy, and XinZhi Medical, which offers innovative drug-coated balloon technologies for cardiovascular treatment. In late 2019, PKU Healthcare Innovation Valley was approved as a national-level enterprise incubator for science and technology enterprises.
From the perspective of Genetron Health, the greatest benefit provided by the PKU Healthcare Innovation Valley, which has garnered numerous honors, lies in its focus on addressing their actual needs. Since the outbreak of the COVID-19 pandemic, PKU Healthcare Innovation Valley has conducted in-depth research into corporate needs and gained a thorough understanding of the practical difficulties faced by businesses in their operations. To better support the development of tenant companies, it has formulated eight preferential policies for enterprises, including partial rent relief during the pandemic, issuance of innovation vouchers, in-depth property management services, and free resource matchmaking, thereby providing comprehensive support to businesses from multiple perspectives.
Not only does it provide diverse benefits to established enterprises to help them weather difficult times, but prospective tenants at the PKU HealthCare Innovation Valley Chongqing Park can also enjoy a range of policy supports. These include clinical subsidies ranging from RMB 3 million to RMB 12 million, RMB 10 million for building innovation platforms, RMB 10 million in rewards for drug industrialization, and RMB 10 million in support for enhancing production technology capabilities. Additionally, tenants can share free resources available across multiple PKU HealthCare Innovation Valley parks in Beijing, Suzhou, Qingdao, Shaoxing, and other locations.
PKU Healthcare Innovation Valley adjusts its policy benefits in a timely manner, based on the external environment and its own development foundation, to better support enterprises within the park. In fact, as early as April 2019, PKU Healthcare Innovation Valley made strategic adjustments focused on “concentration,” centering on incubation services and sci-tech innovation services, leveraging trend-driven technological innovation and venture capital as means, establishing an incubation service center for “innovation + entrepreneurship” in the medical and pharmaceutical fields, creating a collaborative innovation platform integrating “medical-engineering research + industry-academia-research cooperation,” and participating in enterprise growth.
After focusing on sci-tech innovation services, PKU Healthcare Innovation Valley will be built into a technology-oriented professional incubator. To date, PKU Healthcare Innovation Valley has established jointly operated incubators in multiple locations, including Boston, Qingdao, Suzhou, and Chongqing. These incubators serve the functions of expanding project resources and delivering solutions. By making strategic investments leveraging resources such as technology, services, capital, and influence, the ultimate goal is to realize resource monetization, equity conversion of value, and securitization of equity. A core condition for strategic investment is providing services alongside enterprises and growing with them. In terms of incubator development, PKU Healthcare Innovation Valley has established more than ten incubators across China, each with a building area of 5,000–10,000 square meters, aiming to establish itself as the leading brand for medical and pharmaceutical incubation and innovation in China.
PKU Healthcare Innovation Valley has earned the trust of numerous enterprises. Upholding the spirit of “pioneering innovation,” it continuously enhances its value in sci-tech innovation services and is even building a future ecosystem. Meanwhile, Li Haisheng, Assistant President of PKU HealthCare Industry Group Co., Ltd. and General Manager of PKU Healthcare Innovation Valley, articulated his expectations for these enterprises: “I have always hoped that new technologies and therapies developed within the park can be brought to market more rapidly through interaction with hospitals and industrial units under PKU HealthCare Industry Group, thereby truly benefiting society and humanity.”