On August 23, 2020, the 4th Oceanpine Capital Investment Salon Series "Biomedical Hero’s Meeting" was successfully completed in Beijing.
In the favorable environment of the biomedical industry as an important pillar industry of the national development strategy, we invited heavyweight guests from the investment community——Dr. Yixiang Wang, the CEO and Chairman of Jaco Biopharma; Dr. Dong Wei, the CEO of EdiGene and Dr. Yongxin Han, the Partner of Longpan Captial. The other audience guests present were Ms Karen Liu, the founding partners of 3E Bioventures Capital and Mr. Yumin Qiu, the Partner of Advantech Capital, etc., in view of hot topics such as how to capture new opportunities, grasp the window period of capital market reform, and take the right path of merger and acquisition integration in the rapidly developing biomedical industry in China, conduct in-depth cross-border roundtable discussions.
Dr. Wang pointed out that China’s innovative drug companies face many problems. The serious homogenization; the large number of license-in models made by domestic companies, the asset prices of Chinese equity have been raised really high; Due to the particularity of the industry, the lack of professional angel investors, so that the mid/late-stage investment projects very few ; Finally, there are also the policy impacts of the Chinese market, including hospital bottlenecks and medical insurance negotiation systems. The moat of me-too medicine is gone. The update iteration speed of medicine is too fast. With the uncertainty of profit expectations and cycle, innovative drugs without medical insurance will have no sales guarantee, but medical insurance will face a sharp reduction of more than 50%.
Dr. Wang mentioned that new biomedical companies are the main force of innovative drugs. New biopharmaceutical companies have initiated two-thirds of innovative R&D. At the same time, nearly 50% of NDAs are submitted by emerging pharmaceutical companies. When the company establishes a project, it must first have a science foundation, and secondly, it must be resolved from clinical practice. Pain points, and finally can achieve the world's top three potential projects, it is possible to have a place.
Dr. Wang concludes with a quote published in Nature Review in 2004: "Today's brightest stars have had a bleak time. With the help of capital markets, it is possible for Chinese companies to achieve global first-in-class by focusing on the scientists and frontier fields who are marching silently in the dark.
As the CEO of cutting-edge biotech, Dr. Dong Wei shared his judgment on the company's future listing. China's biotech is similar to the United States, is growing from the initial tech boom to next. EdiGene was established in 2015 and laid a solid foundation in gene editing technology in 2018. However, the team is not large and does not require much capital, and services can be used to supplement cash burn. After joining the company in 2018, the company's strategy was to use gene editing to the most valuable place, which is therapy. At the end of 2018, gene editing has a special position and is at the forefront of the track, so it has been recognized by investors. The field of gene editing has been making rapid innovations. If companies want to build a good portfolio, they cannot do without the support of capital. The company will definitely go public in the future, but the original intention is to establish a good gene editing company in China. This will not change. No matter how the capital market changes, the company can find its own way.
Dr. Yongxin Han said that the current is the golden age of biomedicine development. Regardless of the macroeconomic policies, the enthusiasm of capital or the passion of entrepreneurs, the enthusiasm of the capital market is sustainable. Investment in the primary market, there must be a bubble in valuation, but the valuation of all companies will still return to their original value. Investors must have the wings of a headwind, and the value of the project must return to the enterprise. The value of the secondary market is not a criterion for judgment.
He also mentioned that the pre-IPO round project is very hot at present, and the pre-IPO round project is mentioned in the valuation of the technology innovation board. Downside risks are to be judged by the disadvantages, the value of firms and their downside rates of return. We can't influence price judgments just because the market is hot.
The brilliant content sharing of the salon brings new perspectives and new thinking to the guests. After the salon, the guests and our investment team moved to the open-air garden on the roof of China Century Building, and held a cocktail party with the charming sunset for a more in-depth conversation.
Source: Oceanpine Capital
