Ex-New Horizon investors lead $100m round for Zai Lab

OrbiMed also participated, as did existing investors Qiming Venture Partners, Sequoia Capital and TF Capital. Qiming led the Series A in August 2014, committing half of the $30 million round. KPCB and domestic contract research organization (CRO) TigerMed were the other backers, alongside Sequoia and TF.

Zai Lab was set up in 2013 by Samantha Du, who served as CEO of Hutchison Whampoa Group's drug R&D subsidiary Hutchinson MediPharma for more than 10 years before joining Sequoia as a healthcare venture partner. The company's strategy is to license pre-clinical findings from the West and then develop drugs in China, leveraging the comparatively low operating costs.

For example, shortly before the Series A closed, Zai Lab obtained a license from Sanofi for two novel compounds that could potentially be used to treat chronic respiratory diseases, including chronic obstructive pulmonary disease (COPD) and asthma. The compounds were discovered by Sanofi and are currently in pre-clinical stage.

Over the course of 2015, the company entered into three further licensing agreements: with Bristol-Myers Squibb for exclusive rights in China to commercialize a cancer treatment in Phase 3 development; with UCB to work on a drug targeting autoimmune and other inflammatory diseases that is set to enter Phase 1 clinical trials in 2016; and with Korea's Hanmi Pharm to develop a lung cancer treatment.

In total, Zai Lab has taken five drug candidates into clinical trials in China. The new capital will be used to support its R&D programs and its ongoing licensing and commercialization efforts. "This financing will allow Zai to further capitalize on the rapidly growing opportunity in China and to bring transformative treatments to patients with highly unmet medical needs," Du said in a statement.

New Horizon was set up in 2005 by Winston Wen, son of former Chinese Premier Wen Jiabao, and Jianming Yu. Wen subsequently ended his day-to-day involvement with the business and became chairman of a state-owned enterprise in 2012. The firm raised three funds with more than $2 billion in committed capital, but plans for Fund IV were put on hold amid reports of internal disputes.

Last year it emerged that New Horizon would be restructured and launch two funds: Advantech, which focuses on growth capital investments in technology, media and telecom and healthcare; and Redview Capital, a traditional growth vehicle targeting consumer, advanced manufacturing, clean energy and new materials. Each fund is seeking up to $500 million, as first reported by Debtwire.

The initial impression was that Yu would be less involved than before, while retaining a seat on the investment committees of the two funds. The Zai Lab release identifies him as the founder of Advantech and Redview.

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• Topics
• Healthcare
• Greater China
• Expansion
• Venture
• China
• Venture
• Growth capital
• Sequoia Capital
• OrbiMed
• New Horizon Capital
• healthcare