Profile: KPCB China's James Huang

James Huang has been working in the biotech and pharmaceuticals space, from operations to investments, for more than 30 years. Asked how he got into the industry in the first place, Huang’s response is simple: he studied for a degree in chemical engineering at his parents’ behest. “I am one of the typical Chinese kids – our parents wanted us to be scientists or engineers,” he adds.

Born in Taiwan, Huang moved to the US at the age of six. After graduating from the University of California, he worked as a researcher for global pharmaceutical companies, but this wasn’t enough. An eagerness to grasp the business side of the industry took Huang to Stanford Graduate School of Business and then into business development positions at Bristol-Myers Squibb and SmithKline Beecham. These experiences also convinced him that he wanted to be in healthcare for the long-term.

“The healthcare industry is unique because everything you do can make an impact on people’s lives,” says Huang. “So, after I finished the business school, I came back to the industry – there was no doubt about that. There was where I wanted to be.”

Between 1995 and 2000, Huang represented SmithKline Beecham in negotiations over technology collaborations and licensing agreements for compounds. He also helped launch drugs worth several billion dollars, including Avandia, an oral diabetes medicine that helps control blood sugar levels. When SmithKline Beecham merged with Glaxo Wellcome to create GlaxoSmithKline (GSK) in 2000, Huang was tasked with integrating the two organizations in the US.

“I hated that job. It was no fun. My passion had always been on the product development side. At that time, doing integration was more like a consulting job for me,” says Huang. 

Burdened with unappealing duties like regular travel to Poland – general managers at GSK were expected to hold two jobs with two different functions in two countries – he left. This came on the heels of Tularik, a cancer drug developer, becoming the first biotech company to achieve a $1 billion market capitalization following its IPO in December 1999. Convinced by the opportunities at such a fast-growing business, Huang soon joined as head of business development and commercial operations.

“In the biotech field, that was the most exciting thing – no one had ever reached the market cap of $1 billion,” he explains. “After so many years working at large pharmaceutical companies as an executive, it was a natural progression for me to work in biotech. I felt that I had a lot to offer because of my background in research, sales and marketing, and business development.”

Huang’s achievements in Tularik included establishing partnerships with US-listed biopharmaceutical player Medarex and Japanese pharmaceutical company Sankyo to develop and commercialize new therapeutics.

By the time Tularik was acquired by global biotech giant Amgen in 2004 for $1.3 billion, he had already moved on to Corgentech, another rising star in the US healthcare space that initially focused on treatments for heart disease and cancer. The company raised several rounds of VC funding before listing on NASDAQ in 2004. A year later, Corgentech changed its name to Anesiva to reflect a shift in its core business to focus on pain management therapeutics.

Into investment

By this point, Huang was keen to start his own biotech company. He sounded out Samantha Du, now the founder of Chinese biotech player Zai Lab, as a co-founder but she demurred. Du instead coordinated the incorporation of a Shanghai-based pharmaceuticals start-up – Hutchison China MediTech – under Li Ka-Shing’s Hutchison Whampoa, while Huang was offered a position as a venture partner at TPG Capital.

He asked several friends who worked at the Sino-US healthcare investor Vivo Ventures whether he should take the job. They responded by offering him another. Huang duly became an executive-in-resident at Vivo, covering investments in Asia but with a particular focus on China. “I had never asked to be in the venture investment industry. It wasn’t something I planned to do. I just fell into it,” he says.

Back in 2007, China’s healthcare sector was less crowded, with only a few players – such as Morningside Ventures, BioVeda Capital and Vivo – dedicated to investing in the space. Huang joined Vivo when the GP was deploying its $280 million sixth global fund, of which less than one-quarter was for deployment in China. However, the scale of the country’s healthcare needs were very much apparent.

“I was horrified by the healthcare services in China when I came to visit one time in 1993. People were queuing outside the hospitals with their bicycles. Today it’s still the same. The only difference now probably is that people are waiting in cars, but there are still long lines,” recalls Huang. “I came to China because I was really passionate about improving healthcare service standards here.”

After four years at Vivo, Huang was tapped up by KPCB China, which wanted to add a healthcare practice to its existing technology, media and telecom (TMT) coverage. Relying on his operational experience, he adopted an investment-through-incubation model: identifying macro trends and unmet medical needs, and then providing seed funding for entrepreneurs to launch companies. The objective was to guide these businesses to first institutional funding rounds. 

“Unlike most venture capital firms, which make healthcare investments across the board, we were more like snipers,” Huang explains. “Once we had identified an unmet medical need, we are had to be very patient in finding the right company. And if we couldn’t find one, we created one by ourselves.” 

One third of KPCB’s $250 million second China fund went into healthcare investments, including five incubated businesses. JHL Biotech, now one the largest biotech companies in Greater China, was seeded by Huang before receiving a Series A from Sequoia Capital China and other investors. After two more rounds, JHL listed in Taipei in 2015 and is valued at $399 million. It is currently in the process of delisting.

When Du established Zai Lab in 2013 to license pre-clinical findings from the West and develop drugs in China, KPCB was the first investor. It re-upped in the Series A round alongside Qiming Venture Partners. Zai Lab went public in the US earlier this year and now has a market capitalization of $1.2 billion.

These deals represent home runs for Huang, but they are not the result of opportunistic swings. Over the past 10 years, at Vivo and KPBC, he has invested in a total of 20 companies, including the incubation projects.

“I’m a guy who makes very, very few investments,” he says. “Venture capital is a high-risk business. The way we make money is to de-risk. So, we go through a rigorous process with every single idea, trying to figure out the underlying risks and the competitive landscape on a global basis. During the incubation period, if we believe that we can make money on that company, we will deploy more capital in the Series A round. That’s how we do it, but it’s easier said than done.”

Going solo

Several months ago, Huang decided to go solo, establishing healthcare specialist GP Panacea with Hai Mi, who was previously a partner at KPCB. The firm is targeting $150 million for its debut fund. While continuing to manage the existing KPCB China vehicle, he has started incubating two life sciences investments under Panacea.

Huang is optimistic about healthcare in China, noting the shift from manufacturing-oriented business models to ones driven by innovation. When he worked in Tularik, the company outsourced part of its clinical trials work to contract research organizations (CRO) such as WuXi AppTech (previously known as WuXi PharmaTech) due to lower operation costs. Over the past few years, WuXi has scaled its drug R&D capabilities in China and overseas, as well as acquiring global players – such as Iceland and US-based genomic analysis and bio-informatics firm NextCode Healthcare – to broader its products offering.

“The transition is really amazing in China’s R&D space,” he says. “In a mature healthcare sector, you need to accumulate knowledge over time in order to innovate. Now we are seeing Chinese scientists who studied abroad in the mid-1990s and went on to work for global companies, coming back to China. Culturally, the Chinese are entrepreneurial and these people have the capabilities to create innovative companies. That’s just a natural evolution.”

The country’s healthcare ecosystem is also improved. The establishment of industrial parks such as Zhangjiang Hi-Tech Park in Shanghai, Suzhou Biobay, and Wuhan Biolake have brought life sciences researchers closer to drug and device developers, while global pharmaceutical companies have set up R&D centers in China. As a result, it is much easier for Chinese entrepreneurs to find high-quality professionals to help create new companies. Huang receives about 2,000 referrals every year from Chinese scientists looking for positions at healthcare companies.

“It has been a privilege for me to back some of the best people in the last decade and create some great companies with them,” he adds. “Looking forward, we will continue to work with these people, and leverage the networks we have developed over the past 30 years in the US and Europe.” 

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• Topics
• Greater China
• Healthcare
• Venture
• Early-stage
• China
• Kleiner Perkins Caulfield & Byers
• Panacea