Winning lawsuits and securing new financing, he aims to make the million-yuan "anti-cancer injection" affordable
Article by Hu Xiangyun
Edited by Hai Ruojing
36Kr learned that Shenzhen Bay Cell, a biotech company founded by Fan Xiaohu, the former founder and Chief Scientific Officer of Legend Biotech, recently completed a 140 million RMB Series A financing round, led by Songhe Capital and followed by Oriental Fortune Capital.
Over the past year, AI has illuminated the capital market like a powerful beam of light. Beyond its glow, many sectors have been revalued in the shadows, and the innovative drug sector is one of them. As the tide recedes, the public's demand for new and effective drugs persists, and entrepreneurs are navigating through successive scientific, clinical, and commercialization milestones within a far stricter valuation framework.
In China's Cell and Gene Therapy (CGT) space, the name "Fan Xiaohu" is nearly impossible to overlook. In March 2022, the CAR-T cell therapy Carvykti, which he led development of at Legend Biotech, was approved for launch in Europe and the United States. It remains the world's only CAR-T cell therapy whose sales are approaching 2 billion USD.
However, less than a month after Carvykti received US approval, Fan Xiaohu left Legend Biotech to found Bay Cell. Legend Biotech's parent company, GenScript, filed a lawsuit against him alleging trade secret infringement, claiming that in the early days of founding Legend Biotech in 2017, Fan had "sent 6 project initiation reports and other documents he authored or was responsible for to his personal email," and had disclosed inaccurate financial data in public settings.
At the end of 2025, the Supreme People's Court issued a final judgment dismissing all of GenScript's claims, and Fan Xiaohu won the case.
During these four years of building his startup amid litigation, Fan Xiaohu remained low-key and restrained, describing himself as a "hermit" who "grows fruits and vegetables on his small plot of land, finding joy in his own pursuits." With 10 million USD in angel investment, he established his R&D team in Shenzhen, did not frequently travel to northern China for roadshows to chase more funding, and even turned down meeting requests from several top-tier investment institutions. When he occasionally participated in small-scale industry discussions, he only expressed optimistic views about the CGT field.
In recent years, investment and R&D enthusiasm in the cell therapy sector has fluctuated several times. The first-generation autologous CAR-T represented by Carvykti is a customized therapy: T cells are collected from the patient's own blood, genetically modified ex vivo, and then reinfused back into the body to kill tumors. The manufacturing process of this "anti-cancer injection" is time-consuming and high-cost, with a single dose generally priced as high as 1 million RMB.
Although pharmaceutical companies have actively introduced commercial insurance and inclusive medical insurance plans to ease the payment burden, there are still not many patients who can afford this "million-yuan life-saving drug."
After the high-end customized route of cell therapy was proven commercially unviable, innovative pharmaceutical companies quickly shifted their R&D focus to a "mass-market approach" characterized by low cost, high production capacity, and strong accessibility. "Off-the-shelf" allogeneic universal CAR-T and in vivo CAR-T that can be directly generated inside the human body have successively become the darlings of cell therapy investment.
Fan Xiaohu is still riding this wave. He believes that in the next 10 to 20 years, increasingly precise, safe, affordable, and even curative single-dose cell therapies will continue to emerge, "becoming a core treatment modality for cancer, autoimmune diseases, and even most diseases including rare diseases."
Recently, at the American Society of Clinical Oncology (ASCO) Annual Meeting, Fan Xiaohu unveiled the concept behind Bay Cell's "non-gene-edited universal CAR-T technology platform" and its early human data for treating diffuse large B-cell lymphoma. The platform is expected to enable the production of off-the-shelf CAR-T therapies that can be mass-produced industrially like ordinary biologics, with costs comparable to conventional biologic drugs.
With initial human data now available, the Bay Cell team has launched a new financing round to fuel subsequent clinical trials. This entrepreneur, who has experienced the peak of success and withstood the darkest moments, is ready to step back into the spotlight once again.
Below is the edited conversation between 36Kr and Fan Xiaohu:
A New Path
36Kr: What is the current financing environment for the innovative drug sector?
Fan Xiaohu: I feel that the current financing environment for innovative drugs remains quite challenging, especially for cell and gene therapy. During the past "dream-driven boom period," many CGT companies secured financing, but at the commercialization stage, domestic progress fell short of expectations, while overseas market access thresholds are extremely high. Blocked exit channels have led to weakened investor confidence and a reduced willingness to deploy capital.
Capital returning to rationality is not inherently a bad thing. However, a large amount of funds are now drawn to "new technologies" like AI; compared to innovative drugs, these sectors do carry far greater room for imaginative upside. To a certain extent, this has pushed innovative drugs into a state of reverse irrational capital squeeze.
36Kr: The reality that capital is "siphoned" into the AI direction is very evident. From your perspective, what would a rational state for innovative drug entrepreneurship and investment look like?
Fan Xiaohu: Throwing money around recklessly in boom times, or being overly cautious and haggling over valuations even after in-depth due diligence to identify high-quality projects during a cold winter, are neither rational behaviors.
True rationality means eliminating the interference of market sentiment and ups and downs, refocusing on technological breakthroughs and clinical progress, and evaluating the commercialization closed loop from an end-to-end perspective. Only in this way can people make rational and informed judgments. This applies to both investment and entrepreneurship.
During the industry trough and reshuffling period, investment institutions that continue to deploy in CGT should learn lessons from the last cycle: avoid following trends, do not blindly invest in popular tracks, but conduct in-depth research and focus on projects with genuine technological breakthroughs and proven commercialization capabilities.
36Kr: Bay Cell aims to develop universal CAR-T while bypassing "gene editing" technologies. How feasible is this mechanism theoretically?
Fan Xiaohu: The basic concept of allogeneic universal CAR-T is to use T cells from healthy donors to manufacture "off-the-shelf" products that can be mass-produced and administered immediately when needed. However, direct infusion of donor T cells would trigger severe immune reactions, so most current approaches modify cells through gene editing.
Over the past several years, the industry has almost taken for granted that universal CAR-T requires gene editing. In reality, gene editing first brings safety risks such as off-target effects, and its manufacturing processes inherently face practical constraints including limited production yields and high raw material costs. Currently, products that claim to produce 100 doses per batch actually still carry high costs. This explains why traditional universal CAR-T, after nearly 10 years of R&D, still has no approved products, and I believe the industry is somewhat disappointed with this outcome.
Therefore, we wanted to avoid the gene editing step. Previously, some companies had already verified the feasibility of this technical path, but they failed to make it work due to issues such as insufficient therapeutic efficacy. We rely on our proprietary targeted protein degradation technology, which uses specific antibody epitopes for targeted recognition, to precisely deliver the "TCR-CD3 complex" — the key protein that triggers immune reactions — to the cell's intrinsic protein degradation system for elimination.
36Kr: By doing this, can you achieve therapeutic effects comparable to gene editing?
Fan Xiaohu: This process skips physical manipulation steps like electroporation, which prevents stress damage to cells. The manufacturing process aligns more closely with the cells' natural operational mechanisms, so the modified T cells are in healthier physiological states with more complete functions, delivering effects close to those achieved via gene editing.
Put simply, it's like attaching a recycling QR code to the "identity tag (TCR-CD3)" on the T cell surface, and using the cell's built-in waste recycling system to "degrade" the tag — instead of using "gene scissors" to cut it off entirely. This achieves the goal of removing the identity marker while preserving the cell itself.
Translating this technical path to end-product manufacturing, we expect to achieve a substantial increase in per-batch production capacity (3000 doses per batch), reduce raw material consumption, cut production costs, and realize standardized mass production just like conventional biologic drugs. In the future, it may even enable outpatient administration, without requiring complex in-hospital customization workflows.
36Kr: What data can support the efficacy or safety of your technology platform?
Fan Xiaohu: Based on our non-gene-edited universal CAR-T technology platform Revo-U, our CD19 CAR-T therapy has initiated an IIT (Investigator-Initiated Trial) clinical study for the indication of diffuse large B-cell lymphoma.
At ASCO, we disclosed data from 4 patients treated with this therapy: among them, the first patient who received a low-dose treatment has maintained complete remission for about 14 months with no adverse events. The second patient achieved complete remission 1 month after infusion, but experienced disease progression at 3 months, with only Grade 1 Cytokine Release Syndrome (CRS) lasting 5 days in terms of safety.
In addition, one elderly patient who received a high dose showed peak CAR-T cell expansion far exceeding that of commercially available CAR-T products (note: expansion capacity is one of the key metrics for evaluating cell therapy product performance), with peak blood CAR-T copy number exceeding 19 million per milliliter, but the patient developed relatively severe Grade 3 CRS.
Moving forward, we will continue to optimize the lymphodepletion regimen, explore treatment options with low or even no lymphodepletion, to balance efficacy and safety. Our long-term goal is to make this universal CAR-T as easy to use, safe, and low-cost as conventional antibody drugs, while delivering therapeutic efficacy close to autologous CAR-T.
Avoiding Cutthroat Competition to Go Further
36Kr: What are Bay Cell's current plans for pipeline indication layout?
Currently, Bay Cell has 4 to 5 pipeline candidates in reserve, and we plan to advance them through dual pathways: drug registration and medical technology translation. We also remain open to all forms of BD or commercialization partnerships.
In terms of indications, our core focus is on solid tumors, while we also have pipelines targeting autoimmune diseases. Competition in hematological malignancies is relatively concentrated, and we mainly use these indications to validate the feasibility of our technology platform. But to be honest, even in these highly "crowded" indication spaces, as long as the pipeline is sufficiently competitive, there are still BD opportunities — which is something I did not anticipate before.
36Kr: The work Bay Cell is doing — could it be misunderstood by the industry because it is too novel?
Fan Xiaohu: We hope to gradually build a new direction that is recognized by the industry. After we recently published our related research, I received contacts from many industry practitioners at home and abroad. They understood the technology and recognized that this is a technical path with significant value. If new competitors emerge in this track in the future, it may not necessarily be a bad thing.
36Kr: But the reality is, multinational pharmaceutical companies and investment institutions are intensively flocking to the in vivo CAR-T technology direction. In the first half of this year, disclosed financing in the primary market alone exceeded 2 billion RMB. Will this squeeze financing space for other CGT sub-sectors? Do you feel pressure?
Fan Xiaohu: This is an objective reality. Overheating in any single sector will lead to capital imbalance or waste. Currently, the technology and AI fields are extremely hot — but can every company there really succeed? The same applies to the innovative drug sector: if capital only pours into one direction, the overall capital efficiency and social benefits may not be very high.
But compared to 10 years ago, the "trend-following" problem in the capital market has actually improved significantly. In recent years, a large number of PhDs with biomedical backgrounds have joined investment institutions, and their due diligence capabilities are continuously improving as they grow through interactions with entrepreneurs.
However, we have also noticed a tendency: there is a misalignment of judgment capabilities between frontline investment researchers and senior decision-making investors in the innovative drug field. I understand that final investment decisions can be influenced by market conditions, but I still hope that investment institutions are willing to support high-risk, high-innovation projects. This will make the venture capital ecosystem healthier.
36Kr: How do you view the in vivo CAR-T path? Will Bay Cell consider developing related pipelines?
Fan Xiaohu: In vivo CAR-T does not require ex vivo cell extraction, modification, and preparation like autologous CAR-T. Instead, it directly injects gene vectors that target T cells into the patient, to transduce T cells and generate CAR-T cells inside the human body. Theoretically, this can also create an "off-the-shelf" product and lower the end-user price.
This technology has been under development for many years. Initially, the industry generally believed that achieving regulatory approval would be extremely difficult. It was not until early clinical data from recent years exceeded expectations that multinational pharmaceutical companies and investment institutions began to scramble to deploy in this space. This is a sign that the industry is thriving again, and several cell therapy companies at home and abroad have already achieved monetization at the early R&D stage.
Overall, I agree that in vivo CAR-T will become one of the mainstream product paths in the future CGT space. In fact, Bay Cell started laying out in vivo CAR-T technology back in 2023.
On the other hand, market hype cannot obscure the fundamental technical challenges. For example, regarding the core delivery problem, whether using lentiviral or LNP delivery vectors to develop in vivo CAR-T products, there are still unresolved scientific issues: the former faces poor cell selectivity and long-term safety risks from random genomic integration, while the latter has short therapeutic duration and may not be able to conquer solid tumors.
Precision delivery is a common challenge for cell and gene therapies. This is still a high-risk treatment modality, and it must be sufficiently precise and avoid off-target effects. I believe current technologies still have room for improvement in achieving sufficiently high selectivity. But technological iteration will not stop, and competition in this field has only just begun.
36Kr: So you still choose to focus on the non-consensus technical path?
Fan Xiaohu: As entrepreneurs, I believe everyone wants to focus on their own innovations and directions, but it is impossible to be completely unaffected by the market environment — this is not a purely scientific issue.
However, many times, if you try to over-adapt to and integrate into the environment, you may have to pay a price. We have all gone through the phase where "no one invests without a PD-1 pipeline," and then the later phase where "no one invests if you have a PD-1 pipeline." That probably illustrates the point.
Therefore, entrepreneurs must first establish their own independent technical judgments and open up differentiated innovation paths. If you can avoid getting caught up in cutthroat competition, don't do it. Walk your own path — even if you fail, you are still a hero. Engaging in fierce competition that leaves you exhausted, wastes huge amounts of capital, and still does not guarantee success is not worth it.