Zheng Yufen, Founder of YUEIN Healthcare Fund: Three Key Lessons China Should Learn from the U.S. to Advance Precision Medicine
After arriving in the United States, Zheng Yufen conducted successive evaluations of companies in the fields of biopharmaceuticals, gene editing, immune cell therapy, and healthcare big data. She believes that the development direction of precision medicine in the U.S. is very clear, with targeted therapy and personalized medicine serving as core technological focuses. In terms of funding, insights gained by Zheng Yufen in Boston indicate that U.S. venture capital firms, including publicly listed companies on the NASDAQ, are concentrating their efforts and heavily investing in companies engaged in targeted drug therapies and immunotherapies.
Meanwhile, the emerging field of gene editing is becoming a hot spot for investment. Although its technological maturity is not yet high and large-scale application faces challenges that need to be resolved, many high-tech pharmaceutical companies are focusing their efforts on areas such as gene editing and genetic data processing. The capital market has also given sufficient attention and investment to these fields.
Zheng Yufen toldVCBeat (WeChat Official Account: vcbeat)Reporter: “Gene editing encompasses more than just gene sequencing. Investors in China’s investment community and medical sector often harbor misconceptions about the genomics industry, broadly and mistakenly equating it with gene sequencing. In reality, gene sequencing constitutes only a very small segment of the entire genomics industry, as well as the fields of precision therapy and diagnostics.”
The emergence of genetic testing instruments has made genetic testing a relatively mainstream practice. Currently, most companies in China achieve gene sequencing by purchasing instruments and testing reagents from foreign manufacturers.
Gene sequencing is merely the preliminary and initial step in precision medicine, akin to a car’s exterior shell; what truly matters are the engine and transmission. The core challenge with the highest technical barrier lies in data mining and analysis, enabling data to be utilized in clinical practice, empowering physicians, and guiding diagnostic and therapeutic decisions.
The data analytics industry involves the concept of genomic big data. Each individual’s genomic dataset is extremely large, and such vast amounts of data naturally contain a wealth of clinical information. Matching these clinical phenomena with the corresponding data is a task that truly tests technical expertise. In China, there are currently no more than ten companies with core capabilities in research and development and data processing.
Gene editing is based on further human understanding of genes and continued technological innovation. Currently, the pathogenic mechanisms of nearly 4,000 monogenic diseases have been clearly elucidated; most of these conditions arise from defects in a single gene. When such genetic abnormalities occur, gene editing offers a novel therapeutic approach to address them.
For instance, gene knockout can be used to eliminate redundant genes and abolish the function of a specific gene, or targeted transgenesis and site-specific mutagenesis can be employed to introduce new genes into deficient genomes. Although this technology is still some distance away from practical clinical application, it represents a critical direction for future efforts to combat disease and better serve clinical practice.
Precision medicine encompasses diverse fields, each at a different stage of developmental maturity. The United States has achieved relatively advanced maturity in immunotherapy and targeted therapy, with both approaches already implemented in clinical practice. For instance, dozens of targeted drugs have received FDA approval in the U.S., whereas China currently has only slightly more than ten such approved agents.
There are numerous companies engaged in new drug research and development (R&D) in the United States, whereas such enterprises remain exceedingly rare in China. Although financial and policy support is gradually shifting toward this sector, it is still in its early stages. For instance, if a company develops a new drug candidate and seeks investment from the capital market during the preclinical or Phase I clinical trial stages, many domestic funds tend to be highly cautious. This hesitation stems from the low probability of successful drug development, the lengthy timelines involved, and the difficulty in assessing market prospects (as few domestic venture capital firms practice value investing). In contrast, in the United States, if preclinical studies indicate a high likelihood of successful development, the capital market often proactively supports the project through subsequent stages, ultimately facilitating the completion of drug development.
Zheng Yufen candidly stated, “The development of new drugs in the United States has benefited from the power of the Nasdaq capital market, while the unsuccessful launch of China’s Strategic Emerging Industries Board has left all parties with no choice but to pin their hopes on the New Third Board. However, the current development of the New Third Board is far from ideal, with unfavorable national policies and poor overall liquidity. Therefore, at this stage, China still lacks a robust capital market to support the rapid development of new drug research and development.”
In contrast, the U.S. NASDAQ has effectively shouldered the critical role of supporting new drug development. Companies in this sector that list on NASDAQ can typically secure tens of millions, or even hundreds of millions, of dollars in funding (the capital is readily available, awaiting those who seek it). Consequently, the pace of new drug development in the United States far surpasses that of China, a advantage largely attributable to the strong support from its capital markets.
The Wei Zexi incident led to certain overcorrections in China’s policies. Pressure from public opinion and the media made investors hesitant to commit capital to precision medicine, plunging R&D-focused startups into an immediate “winter.” Without financial support, these companies were unable to innovate, let alone conduct more in-depth research.
Zheng Yufen lamented, “These enterprises often sustain themselves through clinical projects and research, but the introduction of new national policies has completely cut off their revenue streams. The policy mismatch has dealt a fatal blow to China’s pharmaceutical companies. It remains uncertain whether future measures will loosen restrictions on the industry and provide R&D-focused enterprises with greater opportunities for innovation.”
In the United States, the tolerance of market mechanisms provides such enterprises with ample room for survival and diverse pathways for development. In contrast, China lacks an objective and professional approach to supporting the growth of the pharmaceutical R&D industry; failures are often met with harsh criticism rather than constructive feedback, thereby exerting significant pressure on policymakers.
Zheng Yufen stated, “The United States is the birthplace of chemical pharmaceuticals, while China is the cradle of traditional Chinese medicine. It would be extremely difficult for China to catch up with the U.S. in the field of chemical drugs. However, in emerging areas such as cell therapy, China still has opportunities. This requires the integration of government policies, media, and industry efforts to jointly promote the positive development of the entire sector.”
The development of big data in healthcare can significantly facilitate and advance precision medicine. Without the support of big data, personalized treatment would be impossible. Precision diagnosis and therapy require that each individual’s data be accurately characterized and differentiated. For example, to create a virtual “healthy human” model, health-related data are typically obtained by collecting and testing information from hundreds of thousands to tens of millions of healthy individuals. The collected data are then aggregated and synthesized to form this virtual “healthy person,” which serves as a baseline. Individuals whose metrics closely align with this baseline are considered healthy, whereas those who deviate significantly may have underlying health issues.
In the United States, unlike in China, the concept and R&D of medical big data are often proposed and executed by precision medicine companies. This is because precision medicine and medical big data are inextricably linked. In China, the concept was introduced by the government and implemented by healthcare IT companies.
Zheng Yufen stated, “From clinical and R&D perspectives, it is somewhat challenging for healthcare IT companies to develop medical big data solutions. This is because computing serves merely as a means and tool; the core competencies lie in the ability to analyze and process medical data, coupled with specialized expertise in precision medicine itself.”
When discussing how China should learn from the United States, Zheng Yufen stated candidly, “In addition to policy and funding, talent is also a critical factor.” According to her, many professionals engaged in precision medicine in the United States come from top-tier institutions such as Harvard University, MIT, and the University of Denver. They are not only academic high achievers but also world-class scholars. Many renowned laboratories have also made precision medicine their primary research focus.
In terms of funding, supported by dedicated funds from institutions such as the NIH, American researchers and top-tier talents can devote themselves entirely to research. In fields that appear difficult to apply practically in the short term, U.S. researchers have conducted extensive basic research, laying a foundation akin to bedrock that has solidified the entire framework of precision medicine. In contrast, China suffers from a significant scarcity of basic research; therefore, robust talent support is also a key reason why precision medicine has advanced more rapidly in the United States.
Furthermore, in contrast to the pragmatic research institutions in the United States, much of China’s medical research often puts the cart before the horse, with studies selected primarily to secure project grants and professional promotions—described euphemistically as mere window dressing. In contrast, American researchers are largely driven by scientific inquiry and the exploration of fundamental issues related to life and health, aiming to enhance treatment efficacy. This mission attracts substantial funding support. Consequently, the research environment in the United States is significantly more favorable than that in China.