Xiong Weiming Of Huachuang Capital: All Aesthetics Should Be In Line With Clinical Practice And Make Professional Investment In Life Science

"From investing in internet medical care to investing in AI medical care, surgical robots and small molecule drugs, our aesthetic value has gradually changed from focusing on the flow side to being in line with clinical practice. Huachuang has also become an increasingly professional investment institution in the field of life science." Recently, Xiong Weiming, partner of Huachuang capital, said in an exclusive interview with the reporter of the 21st century economic report.

Founded in 2006, Huachuang capital used to be well known for its outstanding investment in the early TMT field. It has invested in well-known projects such as worth buying, tiger securities and daily Youxian. But in fact, since 2016, Huachuang capital has gradually laid out heavy positions in the field of life science, and has invested nearly 30 projects in this field.

Xiong Weiming told reporters that in the four main tracks of enterprise software, cutting-edge technology, life science and consumption upgrading, Huachuang capital has invested nearly one-third of the investment in the field of life science. According to public data, in the past 2020, Huachuang capital invested in 11 projects in the field of life science, including Xinyi biology, Huake precision and Ruixin medical, accounting for half of the total number of projects invested in that year.

What is the investment logic of Huachuang capital in the field of life science, and how is it different from the previous TMT investment? Looking forward to the new year, what new opportunities will Huachuang capital continue to explore in the field of life science?

From paying attention to flow to aesthetic and clinical

Xiong Weiming joined Huachuang capital in 2012. Before that, he served as partner of Bertelsmann Asia Investment Fund and partner of China Economic Cooperation Group in the United States. During the period of China economic cooperation and cooperation, Xiong Weiming has invested in many projects in the field of life science, and has accumulated certain experience.

In 2016, based on the analysis and judgment of market opportunities, Xiong Weiming led Huachuang team to formally start investment layout in the field of life science. At that time, it was just in time to catch up with the tail of Internet medicine. In the market, there were already some start-up companies such as Chunyu doctor and Haoda online. Huachuang capital also tried to invest in an internet medical company in the field of diagnosis and treatment services. However, due to the changes of policy factors and market environment, the company did not succeed.

"At that time, we were also rethinking and gradually adjusting our aesthetics. We shifted from investing in Internet medicine based on traffic end to investing in all new technologies related to clinical application, and seeking the effective combination of it, physics, chemistry, AI and other technologies with traditional biomedical application scenarios." Xiong Weiming said.

For example, in 2017, due to the popularity of AI technology, the application and implementation of AI medical was booming, and Huachuang capital also intended to seek investment opportunities in the AI medical field. After the industry research, the team believes that only innovation of AI medical products is not enough, but also needs to fully meet the clinical standards of medical treatment, and enterprises that can obtain three kinds of certificates can have large market space.

Finally, the team started from the clinical orientation and invested in two AI medical companies, Boshi medical and Ruixin medical.

In addition to focusing on the combination of AI and medical, Huachuang capital also attaches importance to the application of robot technology in the medical field. In 2019, Huachuang capital invested in Huake precision, which focuses on the innovation of medical robot technology and intelligent medical products.

"From investing in Internet medicine outside the hospital in 2016, to investing in AI medical clinic, and then to surgical robot intervention. The companies we invest in have more and more in-depth contact with patients, and our understanding of life sciences is also gradually deepening. " Xiong Weiming said.

Huachuang capital has gradually refined an important investment standard in the field of life science: adhere to all aesthetic standards in line with clinical practice, pay attention to unmet clinical needs, and invest in companies that are sure to get three kinds of certificates.

Xiong Weiming explained that because the unmet clinical needs represent a strong willingness to pay, the commercial landing ability of the product will be stronger, and the possibility of finally entering the medical insurance will be greater. At present, China is still a single source of payment, unlike the United States, where commercial insurance is the mainstream of medical payment. Only when the company's products get three kinds of certificates and enter the medical insurance, can they really open up the distribution channels.

Willing to take the risk of early technology in exchange for the possibility of excess return

From the early TMT investment to the current life science investment, Xiong Weiming admits that there are many differences between the two. For investors, it is necessary to change the original investment concept in the process of exploration.

Because TMT funds mainly invest in the Internet, the innovation brought by the Internet is usually revolutionary. It has changed many old industries and established new connections between people, people and things, people and information. However, in the field of life science, the core value is not to establish the connection. Everything is still clinical oriented. At the same time, there is no completely subversive technology in the field of life science. It is a gradual process from early research to multiple clinical trials, obtaining approval certificates and entering sales channels. Therefore, investment in the field of life science needs to respect science and abide by the rules and regulations of the industry in order to have a chance to succeed.

"But TMT's investment experience also brings certain advantages to life science investment." Xiong Weiming said. TMT investors have experienced hundred regiment wars and live broadcast wars. They are willing to look for investment opportunities in the risk and fierce competition. They have stronger risk tolerance and can seize the early opportunities of the project. Many investors in the professional medical field will be relatively conservative.

"In the market, there are already funds started by TMT such as Junlian capital and Qiming venture capital, which started to increase investment in medical and health fields more than ten years ago, and now they are doing very well. Compared with them, we started later and need to move forward in investment. " Xiong Weiming said. Huachuang team is willing to take some early technology risks to invest when the company has just entered the clinic and there is no clinical data, so as to seize the earlier investment opportunities and exchange the possibility of excess return.

Since 2020, due to the impact of the new epidemic situation, more and more funds have placed heavy positions in the field of life science, and the industry competition is becoming more and more fierce. According to Xiong Weiming, Huachuang's competitiveness lies in: first of all, the team is very persistent in industry research and project coverage, hoping to form a breadth and contact with emerging companies as soon as possible.

Second, after the team picked out the sub investment themes, they attached great importance to the depth of research. There may be dozens of Companies in a subdivision of the Internet industry, but in the field of life science, there may be only three or five companies in a subdivision track. The team will make a clear and comprehensive review of the founders' team background, industry reputation and academic circle evaluation of these companies, and select the most suitable project for "shooting".

Third, in the face of competition for projects, compared with some comprehensive large funds, the investment process is relatively long due to more industries and projects covered. The advantage of Huachuang lies in the fact that most of the time, the partners contact the projects in person, and the investment decision-making speed is fast enough. After investing in a project, partners can also come to the front line to empower the project after investment.

Looking forward to the new year, Xiong Weiming said that in the past four years, Huachuang capital has made a large number of layout in the traditional biomedical field, and also made a small layout in the frontier medical field. In 2021, the team hopes to do more cutting-edge layout, such as AI pharmaceutical.

"The last wave of AI pharmaceutical companies still used AI to make some low-end dosage form changes. In fact, the technology content is not high, and it does not make a great contribution to the real pharmaceutical work. In the next stage, we hope to find some entrepreneurs who really understand medicine and can use AI tools. " He said. In addition, Huachuang capital will continue to pay attention to new directions such as gene therapy and cell therapy.

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