In 2020, the medical and health care sector bucked the trend and set off a "gold rush" in the capital market.

　　In terms of funding, the first three quarters of this year, medical companies in the primary market financing totaled at least nearly 200 billion yuan. This figure is even close to the first half of this year, the entire Beijing tax revenue. In terms of speed, the valuation of many companies in just one year showed an exponential and crazy growth.

　　"When a reporter came to interview me a while ago, I said that the smell of money was floating in the sky of Suzhou now." This is what Dr. Yu Qiang, the founder of CGeneTech and a participant of the "Excellent Leadership Training and Empowerment Program" organized by Suzhou Industrial Park Enterprise Development Service Center and hosted by the Academy, said.

　　Rome was not built in a day, and today's capital frenzy is not a must. In fact, scientists in the first echelon of biomedical innovation in China have been hibernating on the thorny road of entrepreneurship for at least two decades. Yu Qiang is one of them. The company he founded in 2010 is now focused on the development, production and sales of small molecule innovative drugs in popular areas, and is located in the Suzhou Industrial Park, which has witnessed the rise and fall of numerous pharmaceutical professionals.

　　"One will make all the bones dry." Yu Qiang lamented that many of the returned scholars in the park had tasted the sourness of entrepreneurship, but finally fell under the "three mountains" of innovative drug R&D - long drug R&D cycle, huge R&D investment and extremely low R&D success rate. The "three mountains" is also one of the fundamental reasons why venture capitalists are not keen on the field in the past few years, after all, the investment may face long-term no one to take over, the exit channel is not smooth and other problems, for institutions, obviously means "not to scratch". This point, the entrepreneurs who have returned to the country suffered from the shortage of funds.

　　But the word "difficult" did not stop Dr. Yu Qiang.

　　Even if the enterprise repeatedly hovered on the edge of "not being able to eat", even if his home across the ocean suffered the most painful blow, even if the team that took up the heavy responsibility of scientific research had suffered a heavy blow, he never stopped. In his own words, this is the "long march" of China's biomedical industry, and once he gives up, it means that all the previous efforts and sacrifices are wasted.

　　He said that the original intention that drove him to finish this road was to "make good and new drugs affordable to domestic patients". And "new" and "good" means not only that the R&D team must always be sensitive to cutting-edge technology, but also that the helmsman of a science and innovation company must always adjust his heart to face anxiety, maintain a stable organizational structure and talent, and step on the rhythm and general direction of development.

　　Perseverance has rewarded him.

　　Since his return to China, CGeneTech has been developing along the path of "me-too to me-first", with clinical applications increasing year by year and the company's sales approaching 10 million RMB in 2014. Up to now, CGeneTech has nearly completed 5 rounds of financing. Among them, the A+ round in 2019, the financing scale exceeded 100 million yuan.

　　Heat and bubble go hand in hand, but a specialized enterprise that comes out one step at a time is sure to be rock-solid.

　　With the further release of policy dividends such as national collection, drug review reform, land and financial support, the "blue deep sea" of biomedical innovation has given birth to many enterprises that touch the whole industry chain. Industry insiders comment that there is no shortage of Chinese companies that may transform into trillion dollar giants with a promising future.

　　"Paper wealth" may never be the ultimate goal of these pharmaceutical innovation entrepreneurs. What will they see when they stand at this critical point in time and look back after a thousand sails? In the following Q&A, perhaps we can get a glimpse of the industry's thorns and future from Yu Qiang's light-hearted words.
 

Qiang Yu, Founder of Centurion

1. The industry is a will be a million bones

Q1.What are the difficulties of innovative drug development?

Yu Qiang: There is a consensus in the industry that innovative drug R&D has "three 10s" - R&D cycle of more than 10 years, R&D cost of $1 billion, and a success rate of less than 10%. Now the cost of new drug development in the United States has been as high as 2.6 billion dollars, there is also said to be 3.5 billion dollars, in fact, is a word, expensive.

The high cost of drug development is the first difficulty.  For our innovative drug R&D companies, the payment environment for drugs is very important. A commercial insurance-based, Medicare-supported approach to paying for drugs like the United States can play a role in promoting a virtuous cycle of drug innovation.

In business, although medicine is to save lives,  research and development can not always stick money into, we are not rich to that extent. I am not the God of Medicine" reflects the rare disease drug dilemma, Novartis invested a huge amount of money in research and development, spread to each patient at least to recover his R & D costs, the drug must be expensive to sell.

The second difficulty lies in the extremely demanding and long time cycle of each R&D process. In layman's terms, it is impossible to wait until the drug is released to the market and then improve the drug, so each research link and validation must be done to the utmost. The validation process includes in vitro testing to cellular and animal testing before finally doing human testing, and the entire validation process and R&D cycle takes 10 years is considered fast.

The third difficulty is talent. It is almost impossible for a student fresh out of college to start an innovative drug business because of the lack of industry experience. A developer has to go through the entire innovative drug development process - at least ten years - before he or she can go into business. That's why the talent that can be seen in this field is relatively old. In addition, innovative R&D talent is concentrated abroad.

Yu Qiang and his team are doing experiments

Q2. Based on your experience, how has the environment and wind direction of domestic innovative drug development changed over the years?

Yu Qiang: Policy push is important. One opportunity is China's accession to the WTO, which means that we have to recognize the patents of innovative drugs in member countries, which means that domestic generic drugs are restricted. Another opportunity is the national promotion of building a drug innovation system.

From the perspective of industry development, 2010 and 2015 are two key time points. First, major special projects encouraged biopharmaceutical innovation, and second, the country focused on cracking down on crude generics and trial data falsification, setting a time point for the drug approval process. This has driven the speed and efficiency of capital investment and the innovative development of the biopharmaceutical industry.

In terms of R&D success rate, in foreign countries, the probability of developing innovative drugs that have entered clinical trials is 6% in the end; in China, the situation is slightly better because we are doing me-too and me-better drugs that have been validated targets, which have both safety and efficacy after becoming drugs, with a success rate of over 20%.

Q3. What was the opportunity that made you return to China from the United States to start your own business?

Qiang Yu: When I started my business in the US, I provided molecular modules to innovative drug developers, called FBDD (fragment-based drugdiscovery), and the team was responsible for design and synthesis. The predecessor of the drug we are developing now is the molecular module that the company was involved in in late 2006. I then thought that this drug was quite interesting and that my own team had the ability to change it for the better. So I returned home with the result and wanted to give it a try.

Why did I have the confidence to start my own business? Because AbbVie, the originator of FBDD at that time, bought the results from my team, which later became an anti-cancer drug and filed a patent. The patent document specifically mentioned this piece of molecular module of my team. This shows that our team's results really bring real use to companies doing innovative drugs, and also shows that our technology is good.

Coupled with the landing of major national science and technology projects in the pharmaceutical sector, these three events became the opportunity for me to return to China.

Q4. How is the development of entrepreneurs in this industry?

Yu Qiang: One will be a great success. Take our park, the biopharmaceutical companies that have survived over the years have experienced various difficulties.

Most of the companies that eventually stuck it out "bottomed out" before 2015, but there are many companies that will continue to face the threat of "death".

CGeneTech's front desk

02. Used to feel that the company would be finished in a minute

Q5. What was your "darkest moment" like? Have you ever thought of giving up?

Yu Qiang: So far, 2015 has been the toughest year.

At that time, I was starting a business in China with low income, and it was very difficult to raise capital for the company, and there was not enough money for clinical trials. 2015, the company was having capital problems, and there was a serious brain drain. At that time, I thought the company would be finished in a minute. At the same time, my family also suffered some changes, that year was really hard to survive.

But I really did not want to give up. If I gave up, all the efforts in front of me, including the sacrifices made by my family, would not be worth it. If you don't climb the snowy mountains and walk through the grass, you will never have a chance to liberate the whole China.

A friend of mine once said that, to this day, seeing the darkest moments of the year is nothing, the further back the darker. I now also found that the earlier the more nothing.

Q6. Does failure make you anxious? How do you adjust your mind?

Yu Qiang: Failure is a normal thing that will happen, only to say that the probability of its occurrence will be minimized.

However, the first thing to do is to be psychologically prepared for anxiety; the second thing is to prevent it before it happens. The black swan will always appear, and so will the R&D process, and in the end, we have to find a way to solve the problem. As long as the problem is not fatal and the company is not ruined, we can always get through it.

Before I started my business, a classmate told me that if you can be ready to sacrifice everything, you can start a business. At that time I thought it was nothing, but later I realized it was really quite miserable.

CGeneTech Laboratories

03. The smell of money is floating in the sky of Suzhou

Q7. How much has there been a shift in the perception of venture capitalists in this industry?

Yu Qiang: In the past, venture capital definitely tends to invest in projects that return money faster.

For a startup company doing biopharmaceutical innovation, it is difficult to make profit in the first two years after the IPO. Because the law of new drugs in the pharmaceutical industry is that the first two years after listing in various hospitals to lay channels, hardly sell many products, after the third year sales can rise.

After 2015, the environment began to change for the better. 2018, after the opening of the science and technology board, it has become better. Recently, it is even hotter. Two days ago, a reporter came to interview me, and I said that the smell of money is now floating in the sky of Suzhou.

Q8. At what stage is it relatively safe for pharmaceutical innovation companies?

Yu Qiang: A friend in the investment community said "300 million theory" - when the company's single-round financing exceeds 300 million, then it can basically survive.

Why? It is because to develop a drug and put it into production, the total capital needed is between 300 to 500 million yuan, and then the drug must have entered the phase III clinical stage, after which the drug can be declared for marketing. After the product is marketed, the R&D company is relatively safe.

With this process firstly, it means that the R&D team has gone through the whole chain of drug development, declaration, production and sales and has experience; secondly, the drug is put into production and has a sales record. The capital market prefers this kind of team with a track record than those with greater risk. With a product, it is more or less able to sell, will receive some money, and the next development can be based on experience. In addition, with money to buy some R&D from other small companies, the whole company can be in a virtuous cycle.

Q9. You have many returnees in your team, why are they willing to return to China?

Yu Qiang: Chinese students who study chemistry will basically go to study organic synthesis after they go abroad. Organic synthesis is dirty and smelly, and there is a risk of explosion, foreigners do not like to do.

My own synthetic work also encountered when the explosion, hair are burned off, can not open their eyes, the two sides of the eyelashes roll each other, playing a buckle. Doing chemistry experiments organic synthesis if there has not been an accident that is the Chosen One, too lucky.

After Chinese students finish their studies, and then to make up a little biology knowledge, many go to pharmaceutical companies to do medicinal chemistry, so why so many people originally worked in foreign companies. And when there is an opportunity, they are willing to come back to start a business, they all kill back.

Q10. What is the current talent situation in this industry? How to stabilize the talent?

Yu Qiang: If I can do it, I hope to have a legacy. We are recruiting people every day.

There is a shortage of middle-level and grassroots personnel in the field of innovative drug development in China, and there is a huge talent gap. In the past ten years, many companies in the industry have come up all at once. In BioBAY in Suzhou Industrial Park, there are at least one hundred companies doing innovative drugs, and as the process of innovative drug development progresses, not only do we need talents in organic synthesis, formulation and biology, but also clinical talents.

We have a WeChat group called "Jiaozi Paradise Alchemy Group", "Jiaozi" refers to Peking University, "Paradise" refers to Suzhou, and "Alchemy" refers to Suzhou. is Suzhou, "alchemy" is to make medicine. The chemistry department of Peking University has a commitment to each other, and this commitment is very well implemented to this day - not to poach each other. If someone jumps ship, they will also say hello to each other in advance.

There are too many cattle in this industry, and we will always keep moving forward, not staying in mediocrity, and definitely not falling behind. This feels like a long-distance running, must bite the leader, must be in the first echelon, in the first echelon you have the opportunity to surpass.

Editor: Participating Academy Editor