Changfa Development Decodes the Growth Formula of Medical & Health Industry Ecosystem After Seven Years of Strategic Investment

Since 2021, pharmaceutical stocks in the secondary market have experienced volatile declines. Amid prolonged adjustments, the valuation frameworks for healthcare venture capital across both primary and secondary markets have been continuously reshaped. Investment in the pharmaceutical and health industries has become more rational and cautious, with a shifting focus toward original innovation. Meanwhile, companies are actively seeking transformation within this landscape, striving to identify new growth anchors through breakthroughs in proprietary technologies.

Some investors argue that over the next 5–10 years, China’s aging population and the sustained growth in healthcare demand will provide strong support for innovation in the biopharmaceutical industry. In response to this major trend, enterprises, capital providers, research institutions, and local governments across China are all vying to seize the initiative in industrial transformation. They are not only positioning medical and general health as a key strategic direction for entrepreneurship, investment, and economic planning, but also strengthening their own capabilities. By leveraging sci-tech finance to facilitate innovative breakthroughs and shorten innovation cycles, they aim to propel the industry toward rapid growth.

It is precisely for this reason that, at the “inflection point” of medical innovation, various industrial ecosystem operation and investment platforms have been established in succession, aspiring to become important enablers of medical innovation. Among them,Beijing Changping Science Park Development Co., Ltd. is a typical representative.。

According to the data, as of November 2023, the Changfa Zhan Fund-of-Funds system has partnered with 44 market-oriented investment funds.Over 1,100 direct and indirect investment projects, with 38 companies successfully listed on the secondary market, with more than 30 other companies currently advancing toward initial public offerings.

Yet behind this series of data, what deserves deeper reflection is:What growth logic has Chang Development established based on the construction of a pharmaceutical industry ecosystem?

In recent years, Beijing’s pharmaceutical industry has been undergoing a profound transformation. As the primary hub for Beijing’s development of the pharmaceutical and health industries, Changping District is also continuously advancing its industrial upgrading.

It is reported that Changping District primarily focuses on three leading industries: pharmaceuticals and healthcare, advanced energy, and advanced manufacturing. Among these, pharmaceuticals and healthcare stands out as one of the fastest-growing sectors.In 2022, the scale of the region’s pharmaceutical and health industry approached RMB 80 billion, while also attracting more than 300 strategic scientists and high-level talents., has attracted more than 900 innovative enterprises, forming an aggregation of resources across the entire industrial chain, and has successfully been recognized as a National Characteristic Industrial Cluster for Small and Medium-sized Enterprises by the Ministry of Industry and Information Technology, as well as an Overseas Talent Offshore Innovation and Entrepreneurship Base accredited by the China Association for Science and Technology.

Behind this success lies the pivotal role played by Changfazhan. Established in 2015 as a wholly state-owned enterprise by the Changping District People’s Government of Beijing, Changfazhan positions itself as a “new-type industrial ecosystem investment and operation platform” focused on the Changping Industrial Functional Zone, with a business model centered on building a one-stop ecosystem for industrial parks.

Guided by this unique positioning, Changfazhan prioritized pharmaceuticals and healthcare as a key investment sector from its inception. It established specialized investment funds to refine its industrial investment approach. Furthermore, in its overall investment strategy, Changfazhan innovatively leveraged its geographical advantages and the strengths of its state-owned platform.More inclined toward early- to mid-stage investments。

This point is of paramount importance, particularly in the pharmaceutical and medical sector.“Investing Early, Investing in Small Enterprises, and Investing in Technology” Holds Long-Term Value for the Development of Regional Pharmaceutical Industries, namely, focusing on cultivating its own pharmaceutical industry ecosystem, nurturing promising candidates within this ecosystem, and propelling them to become chain leaders, thereby integrating the upstream and downstream segments of the industry.

And from the actual situation, as of now,Chang Development has invested in over 160 enterprises in Changping District, with a total investment amounting to nearly RMB 3.1 billion., with more than half of the total amount invested in the pharmaceutical and healthcare industry. VCBeat has observed that among its portfolio companies are many technology transfer projects from Changping National Laboratory and the Beijing Institute of Life Sciences, such as Huahui Anjian, Yanming Biotechnology, and Pumu Biotechnology, as well as leading university technology transfer projects like Tupai Medical, Huaxia Yingtai, and Pinchi Medical. In addition, Chang Development has nurtured unicorns within the district, such as Shukun Technology and Pinchi Medical, through its funds, and has also facilitated the public listing of five medical projects: Aibo Medical, InnoCare Pharma, BeiGene, Genetron Health, and Giant Biogene.

By observing the current state of the capital market, VCBeat has found that many institutions, seeing that the dividends from the primary and secondary markets have now largely disappeared and that valuation inversions are severe, are reluctantly shifting their focus to early- and mid-stage investments. Chang Development, however, has long accumulated extensive experience in this field, giving it a natural advantage in standing out.

However, this is not the only investment-based advantage of Changfa Zhan. In terms of specialized investments, Changfa Zhan has been conducting direct investment operations using its own capital and fund-of-funds since 2018. As the fund-of-funds ecosystem continued to improve, the first Zhiheng Direct Investment Fund, focusing on the pharmaceutical and healthcare sector, was established in 2020, with approximately 30% of its capital allocated to direct investments to provide key support for cutting-edge niche industries.

As the pharmaceutical industry continues to undergo transformation and its own capabilities are optimized, Chang Development’s overall investment logic is naturally evolving in subtle ways. On one hand, in terms of investment stages, it will gradually expand and upgrade toward mid-to-late stage investments, consolidating and building a full-cycle, sustainable, and positively reinforcing fund investment ecosystem to serve and support the long-term healthy development of regional industries and the economy. On the other hand, in terms of target selection, Chang Development is accelerating its “going global” strategy. Neither its fund-of-funds nor its direct investment funds are confined to Changping District; rather, the aim is to attract more equity investment institutions to register, establish operations, develop, and conduct investments in Changping.

Wang Ying, General Manager of Chang Development, stated in an interview, “Asset management, tech finance, and industrial services—each may not be the strongest in its respective field when considered in isolation,”However, Changfa Zhan’s advantage lies in its deep roots in Changping District, where it integrates resources to enable industrial clients to access these services through a one-stop solution, thereby forming a powerful combination of strategies.. Therefore, for our clients, our services are more attractive in terms of both efficiency and quality.”

This is not without merit. In fact, as early as 2015, Chang Development took the lead in establishing"Asset Management, Fintech, and Industrial Services"Three Major Business Systems: Centered on the core elements of corporate development, we provide one-stop, integrated solutions that combine customized industrial spaces, industrial investment and financing, and in-depth industrial services, to fully unleash innovation potential and support enterprises throughout their entire lifecycle.

However, this one-stop ecosystem service concept, which aims to achieve systematic linkage among the three industrial development factors of space, capital, and services, is easier said than done; its successful implementation requires comprehensive safeguards to ensure smooth operation.

So, how exactly did Chang Development do it?

Specifically, extending inward to focus on portfolio companies, Changping Development has built a multi-level framework centered on industrial services, financial services, scenario implementation, and ecosystem integration.Post-Investment Value-Added Services. It not only coordinates various policy resources and regional industrial resources to help enterprises precisely align with markets, facilitate technology transfer, integrate into industrial chains, and access talent and technologies, but also matches their financing needs at different stages through fund systems and partner financial institutions.

And in the critically important area of external government-enterprise collaboration,Chang Development has always adhered to the concept of "government + market", committed to building the most professional market-oriented operation team among government platform companies—possessing deep industry expertise and corporate acumen, while thoroughly understanding government needs, thereby efficiently integrating and leveraging government resources to deliver the most valuable services to clients.

To meet diverse market demands, Changfa Development has pioneered a new path for industrial park development by integrating asset-light and asset-heavy models. Taking the pharmaceutical and health industry as an example, Changfa Development has established multiple specialized service platforms, including the International Precision Medicine Incubation/Acceleration Center for global innovative technologies in precision medicine, a third-party clinical medical testing laboratory, a Contract Manufacturing Organization (CMO) platform for medical devices, the M⁺ Medical & Aesthetic Innovation Center for technology-driven R&D-focused aesthetic medical projects, the Life Valley Health Cloud Innovation Center empowering the rapid digital transformation of the pharmaceutical and health industries, and the Changping Life Valley Yuanyi Digital Health Incubator.

It is evident that, grounded in the underlying logic of the pharmaceutical industry, Chang Development has established an interconnected industrial service system, forming a virtuous closed loop of government-enterprise synergy. This enhances the competitiveness and sustainability of Chang Development’s platform in the market.

As previously mentioned, China’s pharmaceutical industry is undergoing a transformation, and Beijing Changping Science Park Development Co., Ltd. (Changfazhan) is also advancing its micro- and macro-level transition and upgrading in response to this trend. How can the two be closely integrated? Furthermore, from the perspective of the entire pharmaceutical industry, where does the future growth curve lie? In the current landscape, as a deep participant in the medical and health industry, how should one strategically position themselves in advance? To find the key answers,“2023 Changping Medical and Health Finance Investment Innovation Forum” to Officially Launch on November 17。

It is reported that the forum was hosted by the People’s Government of Changping District, Beijing, and jointly organized by the Future Science City Management Committee (Life Science Park Management Committee), the Management Committee of Zhongguancun Science Park Changping Park, the Financial Services Office of Changping District, Beijing, Beijing Changping Science Park Development Co., Ltd., and Beijing Zhongguancun Life Science Park Development Co., Ltd., in collaboration with VCBeat VB100. The event brought together a distinguished roster of guests from the medical and health ecosystem, including government officials, academicians and scientists, clinical experts, top-tier investors, and corporate leaders, to jointly explore value investment and value creation in the future pharmaceutical and healthcare industry.

And from the agenda design of this forum,It is not difficult to recognize Changfazhan’s insight and dedication to building the pharmaceutical industry ecosystem.。

Specifically, the morning session of the forum featured four core segments: leadership addresses, keynote speeches, dialogues on innovation, and report releases. The central theme was to observe the subtle changes in the pharmaceutical industry from a macroscopic perspective. Highlighting this event, the forum will prominently release"2023 Global Healthcare Industry Capital Report"as an example, by cleaning over 42,000 financing records, we use real investment and financing data to substantiate the changing trends in the global healthcare industry in 2023, helping industry practitioners gain insights into capital shifts.

Furthermore, in exploring innovation within the pharmaceutical industry, the forum not only engaged perspectives from research institutions and universities by inviting two distinguished guests to engage in rigorous discussions on basic research and original innovation, but also, in its horizontal industry overview, specially invitedZhang Xian'en, Vice President of the Chinese Society for Biotechnology and Director of the Synthetic Biology BranchAn In-Depth Analysis of Synthetic Biology and Biomanufacturing in the Frontier of Innovation

In addition, byHuang Lei, Director of the Market Development Department at the Beijing Stock ExchangeThe keynote speech titled “High-Quality Development of the Beijing Stock Exchange to Support Corporate Innovation” also drew significant industry attention, as the BSE’s every move exerts strong guiding and driving influence on industrial development, given its role as a primary battleground for the pharmaceutical industry.

In the afternoon session, the forum’s discussions will be more focused, centering on four core segments.

First, from an industry perspective, we focus on the two core technological sectors of pharmaceuticals and medical devices, examining industrial transformation in greater detail to identify new growth logic. Taking pharmaceuticals as an example, the discussion centers on two aspects: original innovation and the translation of scientific achievements, as well as the balanced development between breakthroughs and survival for innovative pharmaceutical companies. In the medical device sector, the focus is on domestic substitution and global expansion. These approaches aim to find pathways for breakthrough by addressing the genuine needs of current niche industries.

Furthermore, from the perspective of the industrial ecosystem, in recent years, with the multidimensional changes in the market economy and industries, many local governments have designated the pharmaceutical sector as a key area for development. They are actively building industrial ecosystems by leveraging their own resource advantages. However, how to implement these initiatives effectively, closely integrate the core elements of the pharmaceutical industry chain, and form a synergistic force to empower pharmaceutical innovation remains a critical challenge that local governments and industrial parks across various regions must address. Therefore, the forum has specially established an Industrial Ecosystem Roundtable, inviting representatives from all parties across the industrial ecosystem chain to jointly explore the underlying logic of coordinated development in the pharmaceutical industry.

Finally, from a broader macroeconomic perspective with a focus on capital, the key question is how investors can distinguish between what is changing and what remains constant in their investment strategies amidst the current volatility in the pharmaceutical industry and a complex macroeconomic environment. Additionally, it is crucial to identify investment opportunities in niche sectors and uncover long-term value that can withstand industry cycles. This requires proactive strategic positioning by capital providers, which holds decisive significance for the development of the pharmaceutical industry.

Therefore, this is not merely a standard industry forum; rather, it offers an in-depth focus on the pharmaceutical industry. By reviewing past case studies, analyzing current market realities, and forecasting future industry shifts and trends, it seeks to identify the underlying logic for future growth in the pharmaceutical sector from a more granular perspective.

Scan the QR code to register for the conference.