OrbiMed leads $30m round for China's Zai Lab

Vivo Capital, US-based healthcare investor Cormorant Asset Management, and US hedge fund Rock Springs Capital came into the round as new investors. Several existing backers also re-upped, a statement said. The capital will be used to support Zai Lab’s ongoing R&D efforts – it focuses on oncology, autoimmune and anti-infective treatments, areas in which there are unmet needs in China – and future partnering activities.

Zai Lab was set up in 2013 by Samantha Du, who began her career in the early 1990s as a member of Pfizer's R&D department. She subsequently co-founded Hutchison China MediTech and led its R&D subsidiary Hutchison MediPharma, building up a pipeline of oncology and auto-immune treatments. After China MediTech listed in 2006, Du spent two years as head of China healthcare at Sequoia Capital.

The impetus for Zai Lab came in two forms. First, a recognition that more than 75% of high-quality drugs available globally have not entered the China market due to regulatory challenges and foreign companies failing to see or act on the potential demand. Second, the emergence of local contract research organizations (CRO) that provide outsourced clinical-trial services to foreign companies.

Zai Lab leverages this talent and the comparatively low operating costs in China to develop drugs for the local market. In 2014, it obtained a license from Sanofi for two novel compounds with a view to using them to treat chronic respiratory diseases. Since then the company has entered into similar agreements with Bristol-Myers Squibb, UCB, Hanmi Pharm, Tesaro, GlaxoSmithKline (GSK), and Paratek Pharmaceuticals.

Du told AVCJ last year that Zai Lab’s ambitions extend beyond being a drug developer "in China for China." The plan is to go global, selling drugs developed entirely in-house or treatments initiated by third parties. To this end, the recent agreement with GSK involves the global rights – including global commercialization – to two anti-inflammatory candidates.

Qiming Venture Partners led Zai Lab’s Series A in August 2014, committing half of the $30 million round. KPCB, Sequoia Capital, TF Capital, and domestic CRO TigerMed were the other backers. A Series B round worth $100 million followed in January of last year. It was led by Advantech Capital – a GP formed by the team behind New Horizon Capital – with participation from Qiming, Sequoia, TF, and OrbiMed.

J.P. Morgan served as placement agent to Zai Lab on the Series C financing.

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• Topics
• Greater China
• Expansion
• Healthcare
• China
• Growth capital
• Venture
• OrbiMed
• Vivo Ventures