Goldman, Sofina lead Series C for China CDMO Zhenge
Goldman Sachs Asset Management and Sofina have led a USD 100m Series C round for Zhenge Biotech, a Shanghai-based contract development and manufacturing organisation (CDMO).
Additional commitments came from Novo Holdings, Qiming Venture Partners, IDG Capital, Lyfe Capital, Junxin Capital, and Cowin Capital. Qiming and IDG led the company’s USD 70m Series B in March 2021 with participation from CMB International, Lyfe, GT Capital, and several government-related investment entities.
It continues a rich trend of investment in China’s CDMO and contract research organisation (CRO) space. Recent examples include a CNY 1.5bn (USD 240m) round for Thousand Oaks Biopharmaceuticals – less than a year after a CNY 400m fundraise – and a CNY 1bn investment in Tripod Preclinical Research Laboratories.
Many of these companies are establishing capacity overseas as well as in China. The goal is not only to capture more of the industry value chain, but also to provide supporting infrastructure for local drug developers that are increasingly looking to supply innovative treatments to global markets. Established industry leaders like WuXi Biologics want to do the same.
Zhenge said in a statement that the Series C proceeds would go towards strengthening its global R&D capabilities and expanding its manufacturing capacity to better meet demand from domestic and international clients. The company has R&D centres in Shanghai and Maryland, and it is building new production facilities in China with a capacity of 15,000 litres.
Established in 2017, Zhenge provides CMC (chemistry, manufacturing, and control) services to pharmaceutical companies. It has completed more than 150 projects to date for 100 biopharma and biotech customers, ranging from cell line development projects to investigational new drug (IND) applications, to large clinical phase production contracts.
The company offers end-to-end CDMO services, but specialises in monoclonal and bispecific antibodies, antibody drug conjugates (ADC), fusion proteins, and vaccines.
"Against the backdrop of a large and fast-growing global biologics market, we see continued innovation in drug development being propelled by regulatory policy and capital formation. We expect the outsourcing rate for macromolecular drug development to grow as innovative players start to face capacity and talent constraints,” said Kevin Xu, a managing director at Goldman.
“We are excited by the solutions that Zhenge can offer to its clients, as well as its deep knowhow in up-and-down stream processes to help arrive at viable cell lines.”
Zhenge has now raised USD 225m from private investors. The company’s Series A, which closed on USD 51m in March 2020, was led by Lyfe.
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