Cathay Innovation partners with Sanofi to establish a new fund: mainly investing in innovative drugs in China.
36Kr has learned that Cathay Innovation Fund recently signed a memorandum of understanding with global pharmaceutical giant Sanofi to jointly launch a new RMB fund focused on the research and development of innovative drugs in China and the industrial upgrade, with a key focus on the innovative drug pipelines that have entered the clinical stage. The goal of this cooperation is to promote technological progress and optimize the commercialization path, helping the Chinese pharmaceutical industry gain a larger share in the global market.
The official press release reveals that in addition to providing support for the innovative ecosystem of Chinese innovative medicine, this cooperation combines Sanofi's technological accumulation in the global pharmaceutical industry with Cathay Innovation Fund's industry insights and cross-border investment experience. It provides comprehensive solutions from multiple dimensions, including research and development, clinical trials, market promotion, and regulatory compliance, to help the development of the Chinese pharmaceutical innovation ecosystem, achieve technological breakthroughs and commercial success, and thereby release the global potential of Chinese innovation.
Is It the "Best Time"?
For Sanofi, this move undoubtedly once again confirms Sanofi's high attention to the Chinese market, and continuously increases its investment and innovative layout in the Chinese market, further consolidating its core position in this region. Since the launch of the "Play to Win" strategy in 2019, Sanofi has concentrated resources on the development of high-potential drugs. The next stage of this strategy focuses on research and development innovation, product optimization, and organizational modernization, as well as the application of AI in pharmaceutical research and development and commercialization. For the Chinese market, Sanofi has put forward the "China Ambition" goal, committed to becoming the leading multinational pharmaceutical and health enterprise in China by 2030.
For Cathay Innovation Fund, this cooperation at least sends out a signal: to further break down and refine the originally concerned tracks, and bind with the industry leaders, determined to be "more vertical and deeper". Since its establishment 18 years ago, Cathay Innovation Fund has reached an asset management scale of 7 billion euros. Currently, among the more than 300 enterprises it invests in globally, more than 47 are related to medical and health, but this is also the first time that Cathay Innovation Fund has established a specialized fund in China to invest in innovative drugs.
The reform of the Drug Administration in 2015 and the 18A New Policy launched by the Hong Kong Stock Exchange three years later, like a catalyst, rapidly pushed the new drug investment - an area with the largest financing amount, the highest attention, and the greatest potential to create legendary stories - to the center of the capital stage, becoming a sector that almost every mainstream fund cannot avoid. During that time, a unique "fast lane" model emerged in the innovative drug industry: several returnee doctors quickly formed a team, and several product pipelines that were still in their infancy could attract investors with hot money to pay, and then went to IPO in just 2-3 years, and the capital cashed out and left.
At that time, Cathay Innovation Fund was more like a "bystander" - keeping an eye on and being cautious. To a certain extent, perhaps because: many "innovative drug" projects in China at that time were more like products that responded to the policy, lacking real scientific breakthroughs and lasting value; on the other hand, according to Cathay Innovation Fund's investment logic, it will not enter a new field on a large scale when the three elements of talents, experience, and industry resources are not complete.
Why enter the game at this time?
Over the past ten years, China has achieved significant breakthroughs in key areas such as engineering capabilities, research and development efficiency, and commercialization models, and has been able to promote the complete process of drugs from the laboratory to the clinic in an efficient and scientific manner. This transformation has made innovative drugs no longer simply rely on policy dividends, but has entered a new stage full of substantive innovation and commercialization potential.
Especially during the period from 2019 to 2023, Chinese local enterprises have experienced a profound qualitative change in the innovation field, showing a strong product development ability and going-global strength. Although in basic scientific research, China may still have a gap with Europe and the United States, in engineering innovation and business model innovation, its efficiency and achievements have reached the international leading level. Especially the rapid development in the cutting-edge fields such as ADC (Antibody-Drug Conjugate), bispecific antibody, and small molecule nucleic acid, not only highlights the unique advantages of Chinese technology, but also marks the rise of local innovation in the global drug research and development competition.
For Cathay Innovation Fund, it is undoubtedly an opportunity to follow the trend, and also the vertical extension of Cathay Innovation Fund's two core advantages of "internationalization" and "industrialization". Through Cathay Innovation Fund's global ecosystem, combined with Sanofi's accumulated experience in new drug research and development, technical judgment, and commercialization, this cooperation can not only enhance the competitiveness of Chinese innovative drugs, but also drive the development of the domestic biomedical ecosystem, laying a solid foundation for future technological breakthroughs and globalization.
Unique Position
All along, the impression that Cathay Innovation Fund leaves to the outside world is more like an "industrial solution provider" rather than a simple "financial investor". Referring to the development path of Cathay Innovation Fund, it has grown by continuously meeting the "unmet needs" of enterprises (especially industrial LPs). The LPs of its funds come from industrial giants in various industries, which also makes Cathay Innovation Fund pay more attention to the actual needs and long-term development of the industry in the investment decision-making.
Cathay Innovation Fund currently has 9 offices and more than 150 people worldwide, located in China, Europe, the United States, and Southeast Asia. It is difficult to find a clear benchmark for it, and it is also difficult to define Cathay Innovation Fund with the framework of the mainstream GPs in the market.
Perhaps this is one of Cathay Innovation Fund's moats, which is more prominent especially in the current context of globalization. For example, although Cathay Innovation Fund did not systematically layout the innovative drug field in China before, it still achieved remarkable results in the overseas medical field.
According to public information, Cathay Innovation Fund invested in Biose Industry in 2020. The latter was established in 1951 and has more than 60 years of experience in the research and development and production of live bacteria drugs. After the investment, Cathay Innovation Fund helped it accelerate the expansion in the US and Chinese markets, achieving a significant increase in turnover. Later, Cathay Innovation Fund reached a share transfer agreement with the European fund L-GAM and the French government (operated by Bpifrance - BPI French Tech Souveraineté). This transaction was facilitated by Bpifrance (the French National Investment Bank), and the investment yielded nearly 6 times the return in two and a half years.
During the three years that Cathay Innovation Fund held shares in Shenghuo Pharmaceutical, the net profit increased by nearly three times, and then it was announced to be acquired by China Resources Sanjiu Medical & Pharmaceutical Co., Ltd.; After Cathay Innovation Fund invested in OriGene Technologies, it helped the enterprise introduce Biomérieux, and then at the beginning of 2018, the enterprise was successfully acquired by Zhongyuan Union Stem Cell Bioengineering Co., Ltd., and Cathay Innovation Fund completely withdrew; In 2021, Cathay Innovation Fund exclusively invested in the Series A financing of Huiying Medical. Later, with the help of Cathay Innovation Fund's industry resources in Europe, Huiying Medical completed the acquisition of BEBIG Medical GmbH, one of the three giants in the global brachytherapy product, and Wolf-Medizintechnik GmbH, a German intraoperative radiotherapy and X-ray therapy enterprise, which greatly accelerated Huiying Medical's layout in the global tumor radiotherapy field...
The experience of the past ten years has proved that China has a complete industrial chain and efficient clinical operation capabilities in the field of innovative drugs. And as the cooperation between domestic enterprises and overseas pharmaceutical companies in product rights and interests becomes increasingly frequent, the investment potential of China in the field of innovative drugs will also become more prominent. The cooperation between Cathay Innovation Fund and Sanofi has constructed a unique fulcrum that integrates Chinese and foreign resources, and perhaps it will also become a reference sample for the efficient integration of Chinese and foreign pharmaceutical resources in the context of globalization, providing valuable practical experience for Chinese innovative drugs to enter the international market. And with the deep integration of the resources of both sides, the local pharmaceutical ecosystem may usher in a new take-off, and it will also bring more positive impacts to global pharmaceutical innovation.
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