1:30 PM
Aug 17, 2018
 |  BioCentury  |  Finance

Location, location, biotech

Why Chinese investor Xuechao Wang made the move from real estate to biotech

Chinese real estate investor Xuechao Wang placed a bet on a domestic cancer start up 16 years ago, which helped pave the way for the country’s first homegrown targeted cancer therapy. Now, market growth in China driven by increased access to healthcare has him more convinced than ever that a strategic shift to pharmaceuticals is a smart one.

Wang is the major shareholder in Jihe Group Co. Ltd., a Hangzhou investment firm that owns six real estate agencies and has developed and sold 3 million square meters of housing.

The housing market in China barely existed when Wang entered it in the mid-1990s. Now, total real estate investment measures about RMB10 trillion ($1.5 trillion), dwarfing the estimated RMB50 billion ($7.3 billion) for R&D spend on medicines in 2016, according to China’s National Bureau of Statistics.

In 2002, Wang turned his eye to biotech, providing an undisclosed amount of seed funding to oncology newco Betta Pharmaceuticals Co. Ltd., a domestic company aiming to develop NMEs.

That was a large leap from real estate in terms of expertise, returns and timelines. The Chinese biotech industry was in its infancy while the real estate market was hot and offered much shorter investment timelines.

Today, Wang plans to ramp up his activity in the emerging biotech sector by applying core investment principles that have served him well. Indeed, Jihe Group’s interests never stopped at real estate. The company has invested in at least 20 startups in sectors including media, new materials, restaurants and renewable energy.

In a discussion with BioCentury, Wang discussed how his investment philosophy centers on tuning into national trends and backing people he trusts.

In the early 2000s, he said, it became evident China’s economic growth would dramatically increase demand for medical care, creating investment opportunities in pharmaceuticals.

Wang said his investment in Betta was in large part due to the quality of the science of its founder and Chairman Lieming Ding. Moreover, the company’s mission was in line with an impending national shift away from generics manufacturing to creation of innovative therapies.

Lilly Asia Ventures came on board as an investor in Betta’s series A round in 2010, a year before China’s State Drug Administration (SDA) approved the company’s Conmana icotinib, making it the first targeted cancer therapy developed in China by an independent Chinese biotech.

Conmana is an EGFR tyrosine kinase inhibitor. According to Betta, the mutations in the receptor that drive response to Conmana are...

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