From the ancient prescription "Huanglong Decoction" to precise microbiota transplantation, Chengg Ge Biotech secures hundreds of millions in financing | Exclusive interview

It's not a sheer fantasy that "children's urine" can cure diseases. There are serious scientific principles hidden behind it.

Under the decoding of modern medicine, this ancient folk remedy has evolved into the "fecal microbiota transplantation" (FMT) technology, which involves extracting functional microbiota from the feces of healthy people and then transplanting them to patients.

Around 2020 - 2022, the broader concept of "microecological therapy" once stood at the forefront, favored by both capital and the clinical community. Now, a new round of financing has once again drawn the industry's attention. Recently, Chenge Biotech, a pioneer in the field of fecal microbiota transplantation in China, announced the completion of a strategic financing of over 100 million yuan led by Jinhe Capital, which has brought extensive attention to this company that has been deeply involved in the field for nearly a decade.

Factors such as modern lifestyles and the abuse of antibiotics are eroding human gut health at an unprecedented speed, leading to a sharp increase in the number of people with gut microecological imbalances globally. A large number of cutting - edge studies have confirmed that the disorder of gut microbiota is closely related to a variety of seemingly unrelated diseases, including digestive system diseases (such as Clostridium difficile infection, inflammatory bowel disease), metabolic diseases (such as obesity, diabetes), neurological diseases (such as autism, depression), and even affects the success or failure of tumor immunotherapy.

As an innovative therapy that can systematically regulate the complex microbiota network, Chenge Biotech's precise fecal microbiota transplantation technology provides a brand - new solution for intervening in the above - mentioned diseases. So, what kind of development process has the microecological therapy represented by the fecal microbiota transplantation technology gone through? How large is the future market space for this nascent track? Among multiple players, what are the core barriers of Chenge Biotech?

With these questions, 36Kr interviewed Xiao Chuanxing, the chairman of Chenge Biotech. The following is the edited conversation:

36Kr: You initially worked in a top - tier hospital. What opportunity made you decide to leave the system and found Chenge Biotech?

Xiao Chuanxing: I'm one of the earliest doctors in China to explore the clinical application of fecal microbiota transplantation. I was conducting standardized clinical research on fecal microbiota transplantation when I was pursuing my Ph.D. in 2012. The initial motivation was mainly to publish papers.

But as the research deepened, I found that this technology was indeed effective and could treat many diseases. We published the world's first paper on using fecal microbiota transplantation to treat hepatitis B, which was published in the top journal in the field of liver diseases. This paper later caught the attention of Academician Zhong Nanshan's team. A friend of theirs had a very good treatment effect, which also laid the foundation for our subsequent angel - round investment from Nanshan Health Industry Fund.

What really made me determined to start a business was a pair of autistic twins I treated in 2015. After three months of treatment, the two children made great progress. This made me realize that if fecal microbiota transplantation had such clinical effects, it was indeed a career worth devoting my whole life to.

The original intention of medical students is to save lives and heal the wounded. When the technology (we built the earliest R & D platform ourselves), clinical needs, personal values, and capital support were all in place, with the right time, place, and people, I decided to start a business.

36Kr: Since its establishment in 2016, what have been the main challenges in the company's development?

Xiao Chuanxing: There are mainly two major challenges, one internal and one external.

The key internal problem was the unreasonable early equity structure design. After the angel - round financing, the founding team only held 50% of the equity. Therefore, the team spent a lot of time repurchasing shares. It was not until before the latest round of financing that I had the controlling stake and 100% voting rights in the company, which truly solved the problem of equity dispersion.

During the entrepreneurship process, the biggest external challenge was the lack of policies. Chenge spent a lot of effort in exploring and promoting the compliant charging for fecal microbiota transplantation technology. Now, the fecal microbiota transplantation technology has been officially recognized by the National Health Commission of China and included in the "National Medical Service Technology Specifications (2023 Edition)". We have also obtained the self - pay project charging codes from the medical insurance bureaus in 21 provinces across the country, achieving a compliant commercial closed - loop. At the same time, in terms of production qualifications, we have also obtained the collection and preservation license approved by the National Human Genetic Resources Administration Office.

36Kr: The core technology of Chenge Biotech is "Precise Microbiota Transplantation" (PMT). Compared with traditional fecal microbiota transplantation, where does the "precision" lie? What are the technological barriers?

Xiao Chuanxing: The development of fecal microbiota transplantation technology can be divided into four eras so far. The 1.0 era dates back more than 1,700 years ago to the "Elbow Reserve Emergency Prescriptions" written by Ge Hong in the Eastern Jin Dynasty. The "Yellow Dragon Soup" recorded in it was the earliest prototype, which completely relied on experience.

The 2.0 era marked the beginning of standardized processes. Around 2012, clinical researchers around the world began to try to use standardized processes and equipment to process microbiota, achieving a breakthrough from scratch. Fecal microbiota transplantation (FMT) began to be explored as a standardized medical technology. The iterations in these two eras mainly focused on the preparation process, but ignored the most core issue: the individual differences between donors and recipients.

Currently, we are in the 4.0 era of fecal microbiota transplantation, that is, Precise Microbiota Transplantation (PMT). PMT is no longer based on the "process thinking" but the "clinical thinking". The "precise donor - recipient matching technology" uses algorithm models including genomics and metabolomics to match the "personalized" microbiota most suitable for each patient from a large microbiota bank.

To put it simply, in previous transplants, it was "whatever microbiota is available, that's what is transplanted", while PMT is "whatever microbiota the patient lacks, we precisely replenish it", which can directly improve the curative effect. Taking ulcerative colitis as an example, the effective rate of traditional methods is about 40 - 50%, while through our precise matching, the effective rate can be stably above 80%.

The next era of fecal microbiota transplantation will be to develop it as a "live biotherapeutic product" (LBP), with the goal of obtaining the IND approval from the drug regulatory agency and achieving the leap from "technology" to "medicine".

36Kr: The premise for achieving precise matching is to have a large - scale and diverse microbiota bank. How has Chenge Biotech laid out in this regard? Does this constitute a core barrier?

Xiao Chuanxing: The microbiota bank is one of our core barriers. China has a vast territory and huge differences in eating habits. As the saying goes, "One place nurtures one kind of people", and the gut microbiota is also completely different. The microbiota structure of people in Inner Mongolia who eat beef and mutton is vastly different from that of people in Xiamen who eat seafood. You can't transplant the "seafood microbiota" to someone who needs to digest beef and mutton.

Therefore, we established the "China Microbiota Bank Alliance" and built 13 microbiota banks across the country, covering a vast area from South China to Northeast China and from the coastal areas to Xinjiang, to ensure that we can find the most suitable local microbiota for patients in different regions.

The barriers to building a microbiota bank are very high. Firstly, there is the capital barrier. Each bank is a GMP - level production base, and the construction and operation costs are in the tens of millions. Secondly, there is the standard barrier. From the construction specifications of the microbiota bank, sample collection, preparation technology to quality control, a complete set of industry standards need to be explored and formulated. Many of these standards were led by us, and they can be found on the national standards website.

36Kr: At the commercialization level, what is Chenge Biotech's market strategy? What challenges still exist in the access and promotion in medical institutions?

Xiao Chuanxing: Our positioning has always been a platform - type enterprise, and we insist on doing To B business. We focus on technology R & D, strain production, and supply - chain management, continuously optimize product quality and technology, and then promote the market through empowering B - end customers such as agents and channel providers.

There are still challenges in hospital access. Firstly, there is the issue of doctor education. Doctors in the department of gastroenterology have a relatively high awareness of our technology, but doctors in other departments still need a process of acceptance and understanding. Secondly, the hospital admission process is also quite special. It doesn't have a mature path like drugs entering the pharmacy department or medical devices entering the equipment department. As a new medical technology, fecal microbiota transplantation is managed by the medical affairs department, and we need to spend a lot of time on market education.

As for the price, currently, the cost of a single treatment in the hospital is about 8,000 - 12,000 yuan, and a course of treatment (usually three times) costs about 30,000 yuan, which is a self - pay item. We have started to cooperate with commercial insurance.

36Kr: Chenge Biotech's sales in 2024 reached hundreds of millions of yuan, and the cash flow is very abundant. So what is the main purpose of the latest round of financing?

Xiao Chuanxing: Our own profits can fully cover the R & D costs, including those for the live biotherapeutic product pipeline. So, this is a strategic financing.

The investor, Jinhe Capital, is an industrial fund under KingMed Diagnostics. KingMed has access channels to tens of thousands of hospitals across the country, and our fecal microbiota gene testing sample volume is the largest in the country. This equity investment cooperation can greatly accelerate the spread of our testing business in hospitals across the country and achieve industrial resource synergy.

36Kr: How do you view the future market scale of fecal microbiota transplantation technology?

Xiao Chuanxing: I think the fecal microbiota transplantation industry is just in its infancy, and perhaps less than 5% of its potential has been released. The biggest feature of this technology is its safety and universality. Once a technology is approved for use in a hospital, it can be applied to all departments in the hospital. Currently, there are 85 diseases related to microbiota mentioned in medical guidelines, which means it is like a collection of 85 kinds of drugs. This is just the serious medical market, and the imagination space in the big - health market is even greater. We conservatively estimate that this is a market worth hundreds of billions of yuan, but it will take a long process of market education to reach this scale.

36Kr: The core team of Chenge Biotech is stable, and many senior executives have excellent resumes. What do you think is the core of uniting the team?

Xiao Chuanxing: I'm most proud of my team. Since the start of the business, the core senior - management team has only expanded and not shrunk. Here, ensuring interests is the foundation. I offer real equity rather than stock options, and there are clear rules, which are widely recognized by everyone.

But more fundamentally, it is the sense of mission. Like attracts like. I was inspired by the story of rescuing autistic children when I gave up my doctor job to start a business. The partners I attracted also all identify with this mission. For example, the CEO of our intelligent medicine division is a returnee doctor. I told him, "If you do other research, you may stay in the environmental field for your whole life; but by following me, we can save lives and heal the wounded together."

We also have many senior executives who previously worked at Alibaba, Tongcheng, and large multinational pharmaceutical companies, with annual salaries of one million yuan, but they are all willing to join us. This cause has great value and social significance. What everyone believes in is not just me personally, but the cause we have jointly chosen, and its long - term returns will definitely be huge.

36Kr: Does the company name "Chenge Biotech" have any special origin?

Xiao Chuanxing: This name is derived from Ge Hong, a medical scientist in the Eastern Jin Dynasty, and his book "Elbow Reserve Emergency Prescriptions". This book records a prescription using "fecal juice" to treat acute diseases, which is the earliest prototype of fecal microbiota transplantation. Coincidentally, the inspiration for Academician Tu Youyou to discover artemisinin also came from this book. So we often say that fecal microbiota transplantation and artemisinin "share the same origin".

"Chenge" means "inheriting the essence of Ge Hong and adhering to the innovation of medicine". This name always reminds us that what we are doing has historical inheritance and can also create the future.