Suzhou-based CDMO Suqiao Bio: A Capital Darling Thriving in the Investment Winter

At the Zero2IPO Annual Conference, Xu Xiaolin, founder of Huagai Capital—which led the investment in Henlius—joked, “In this chilly winter, if you don’t make an appearance at Zero2IPO’s events, people might think you’ve frozen to death.” Similarly, Yuan Quanhong, a partner at CCB Capital and an investor in InnoCare Pharma, has publicly stated that domestic biopharmaceutical investment has entered a cyclical plateau phase.

The capital winter has already accompanied 2018 through all four seasons.

One man’s poison is another man’s treasure. For Suzhou Bridge Biotherapeutics (“Suzhou Bridge”), 2018 was a year of abundant success. In January 2018, Suzhou Bridge announced the completion of its $38 million Series A financing round; in April of the same year, it closed a $34 million Series B financing round. Notably, Suzhou Bridge is another enterprise invested in by the Suzhou BioBAY since its establishment, the first being Innovent Biologics, which listed on the Hong Kong Stock Exchange in October 2018.Dr. Hu Xiaofang, Managing Director of Chende Capital, the lead investor in the Series B round, believes thatSuzhou Bridge has generated synergies within the overall layout of the biopharmaceutical sector in BioBAY.

Behind the intense capital attraction lies the support of Suqiao’s rapidly expanding business footprint. In June 2017, Suqiao was registered and established in the Suzhou BioBAY (Suzhou Industrial Park Biopharmaceutical Innovation Center); construction began in August of the same year, and operations commenced in January the following year. Since its inception, Suqiao has cumulatively secured contract values exceeding RMB 100 million for biologics CDMO projects, entering the “RMB 100 Million Club” at three times the speed of its peers and setting a new record for order acquisition speed in the biopharmaceutical CDMO sector. Mr. Liang Qibin, the founder, described Suqiao’s achievements over the past year as “unprecedented.” How has Suqiao managed to attract investor favor against the tide? And how has it achieved such remarkable rapid growth? Recently, VCBeat (WeChat ID: vcbeat) visited Suqiao at its location in Suzhou BioBAY.

Mr. Liang Qibin told reporters that Suqiao’s vision is to become a century-old CDMO institution akin to Lonza. This vision is formally articulated as “becoming an internationally leading, one-stop CDMO service platform with highly integrated biopharmaceutical resources, providing customers with high-quality services and robust clinical-stage and commercial manufacturing capabilities.”

Lonza, a pioneer in the industry, spent 100 years honing its craft to become one of the top players. In contrast, Suzhou Bridge Biotech (Suqiao) started from a much higher baseline, bolstered by capital support. Currently, Suqiao’s GMP facilities feature production lines with bioreactors at scales of 50L, 200L, 500L, 1,000L, and 2,000L, along with purification lines and GMP injectable filling lines. These capabilities enable Suqiao to provide CDMO services for Phase I, II, and III clinical production of biologics to pharmaceutical companies worldwide. By 2019, Suqiao is projected to rank among the top three in market share across China.

Specifically, Suqiao’s service portfolio encompasses a comprehensive suite of services for domestic and international biopharmaceutical R&D companies, ranging from cell line development, process development, and analytical method development to GMP manufacturing and regulatory submissions both in China and abroad. In terms of quality control, Suqiao strictly adheres to the quality standards mandated by international and domestic pharmaceutical production regulations, including those of the National Medical Products Administration (NMPA), the U.S. Food and Drug Administration (21 CFR), the European Medicines Agency (Eudralex), as well as the standards set by the WHO, PIC/S, and ICH. During its early stages, Suqiao focused on providing preclinical and clinical (Phase I/II/III human trials) products to clients in China and internationally.

From its inception, Suqiao committed to an internationalization strategy and has established overseas business departments in Hong Kong and Basel. This move facilitates the global deployment of its world-class custom development and manufacturing services for monoclonal antibodies and biologics. Notably, Basel is the headquarters of Lonza, the global leader in biopharmaceutical CDMO founded in 1897. Furthermore, Suqiao has established collaborative mechanisms with three overseas enterprises to introduce mature, advanced technologies, covering areas such as molecular design and cell line development.

According to Mr. Liang Qibin, Suzhou Bridge focuses on the markets for monoclonal antibodies, bispecific antibodies, and antibody-drug conjugates. In anticipation of potential commercialization demands arising from emerging immunotherapies such as CAR-T and gene therapy by Fangxing Future, Suzhou Bridge has already begun building a targeted talent reserve. At this stage, due to unclear commercialization pathways and persistent bottlenecks in quality control, most immunotherapies remain high-risk biopharmaceutical technologies for commercialization platforms. Mr. Liang stated that although Suzhou Bridge will spare no effort in seizing opportunities in new therapeutic areas, it will not incorporate any drug into its business system until the gap between scientific research achievements and commercial manufacturing is fully bridged, as steady development remains Suzhou Bridge’s established policy.

Mr. Liang Qibin is a seasoned veteran in the biologics CDMO industry. Over the past two decades, he has held key positions at numerous domestic and international biologics CDMO companies. While accumulating extensive practical experience in biopharmaceuticals, Mr. Liang has identified the critical success factors for long-term sustainability in the biologics CDMO sector. “I have witnessed many biologics CDMOs evolve from weakness to strength, and others decline from strength to weakness. I have found that technology serves as the foundation. Although the CDMO model may not involve breakthrough innovative technologies, it is an industry characterized by stringent standards and high technical barriers to entry. Meanwhile, a team of experienced professionals and service quality recognized by clients constitute the core competitiveness of an enterprise.”

In our conversation with Mr. Liang Qibin, VCBeat discovered that Suqiao’s rapid development is far from baseless. As Stephen Hawking once remarked, “The present is no more than the past; the result is already inherent in the cause.”

At WuXi Biologics, stringent intellectual property (IP) protection for clients is an ironclad rule. Currently, IP awareness among certain domestic CDMOs remains weak, making robust IP protection WuXi Biologics’ greatest competitive advantage. “We provide services only, operating as a pure-play CDMO,” said Mr. Liang Qibin. He likened the role of CDMOs in drug research and development to selling shovels: the gold mined with those shovels belongs exclusively to the contracting pharmaceutical companies, as they bear nearly all the risks associated with R&D.

A strict prohibition against any involvement in proprietary novel drug development is one of WuXi Biologics’ ironclad rules for intellectual property (IP) protection. In the biopharmaceutical sector, the technical barriers associated with manufacturing process patents are often insufficient to prevent imitation. Once such patents are leaked, new drugs independently developed by pharmaceutical companies face the risk of being preempted by competitors, directly impacting market share distribution during the commercialization phase. As contract development and manufacturing organizations (CDMOs) maintain close collaborations with pharmaceutical companies, they represent a vulnerable point in the protection of these manufacturers’ process-related IP.

The second ironclad rule of IP protection at Suqiao is to embed data protection into business processes from start to finish. Leveraging advanced information technology, Suqiao has established a comprehensive customer intellectual property protection system, including robust data networks, storage and backup systems, and remotely managed office systems, to ensure the fullest possible protection of customers’ intellectual property.

Furthermore, to ensure the integrity of R&D and production data, the security of customer data, and GMP compliance, Suqiao has invested nearly RMB 20 million in building an advanced information technology platform to optimize operations and ensure real-time updates of data across every R&D and production stage. Currently, Suqiao has integrated its Laboratory Information Management System (LIMS), Warehouse Management System (WMS), and Enterprise Resource Planning (ERP) system into this information technology platform.

Suqiao’s second core competitive advantage lies in its strong team capabilities and extensive experience. Suqiao’s senior executives all have prior experience working at CDMOs, with most having worked abroad for over 20 years, primarily in biopharmaceutical-related roles. All employees possess experience in biopharmaceutical development. The Suqiao team has accumulated research experience across more than 100 projects and over 40 targets, and has successfully completed IND filings for 40 innovative biologics in China, the United States, and Australia. Dr. Hu Xiaofang pointed out that Suqiao’s rapid growth not only aligns with the current booming development of China’s biopharmaceutical industry but also reflects the strong execution capability of the Suqiao team.

Mr. Liang Qibin believes that talent is the most critical factor in corporate development. There is a generational gap in the age structure of domestic biopharmaceutical talent, necessitating the large-scale introduction of capable professionals from abroad. During this subtle transition period in talent allocation, fostering a mentorship model where experienced local employees guide newly introduced talent requires not only a comprehensive compensation system but also a distinctive corporate culture.

Suqiao has implemented an employee stock ownership plan. Mr. Liang Qibin greatly appreciates the business philosophy of Zhejiang entrepreneurs, who fairly distribute profits among stakeholders, and he advocates that multi-party win-win outcomes are essential for stable, long-term development.

Unlike the approach of attracting talent overnight solely through high salaries, Suqiao influences talent retention and departure through its corporate culture, gradually building a highly capable workforce and establishing a dynamic process for talent accumulation. Within Suqiao’s corporate culture, Mr. Liang Qibin places strong emphasis on consensus. Beyond profitability, the team’s shared vision is to leverage their knowledge and experience to ensure patients gain timely access to high-quality medicines. “We strive to strengthen and expand our CDMO business, positioning it as a refreshing force in China’s industry. By persisting in this direction over the long term, financial success will naturally follow.”

Throughout the entire service process, Suzhou Bridge aims to convey a philosophy of mutual assistance and collaborative progress, rather than exploiting technical blind spots arising from highly specialized division of labor to extract additional profits from clients. Mr. Liang Qibin emphasizes that a CDMO capable of long-term survival in the market must ensure shared profitability for all parties and avoid short-sighted practices that deplete resources. Committed to establishing long-term strategic relationships, Suzhou Bridge upholds a strong customer-service ethos, striving to meet client needs to the fullest extent possible within feasible conditions. The company flexibly allocates production capacity to provide commercialization services for pharmaceutical products promptly, ensuring orders are completed on time and in full. Furthermore, for details not explicitly covered in written contracts, Suzhou Bridge makes judgments based on the client’s best interests, while maintaining a cost-effective pricing model.

Mr. Liang Qibin believes that at the current stage, biological pharmaceutical CDMOs cannot establish a significant advantage through technology alone. Those that can accurately address customers’ critical pain points and build competitive strengths in intellectual property (IP) protection, team experience, service orientation, and cost-effectiveness will possess strong competitiveness in the market.

Near the end of the interview, Mr. Liang Qibin told VCBeat that Suqiao will gradually shift more focus overseas in the future, aiming to secure a certain position in the international market through competition in quality, price, and service. To this end, Suqiao’s business structure has been divided into two parts: the Domestic Business Development Department, based in Suzhou and serving the Greater China region, and the Overseas Business Development Department, established leveraging local resources abroad.

Just as international biopharmaceutical CDMO giants such as Lonza, Patheon, and Catalent expanded their market share through mergers and acquisitions decades ago, WuXi Biologics’ expansion into overseas markets will also be primarily achieved through capital operations. According to Mr. Liang Qibin, WuXi Biologics will seek potential M&A targets in strategically appropriate locations internationally, including regions with advanced biopharmaceutical industries such as the United States, Europe, and Asia.

Li Kechun, a partner at Yuanming Investment, once remarked that the present moment is the most exciting era for biopharmaceutical entrepreneurship in China. The same holds true for Suqiao.