GL Capital Group leads $290m investment in Chinese life sciences firm Sangon Biotech

Sangon Biotech, a Chinese life sciences research and development services firm, has raised 2 billion yuan ($290.3 million) in its first strategic financing led by healthcare-focused GL Capital Group.

GL Capital Group, led by former Novartis China head Jeffrey Li with over $3.4 billion in assets under management (AUM), invested in the deal alongside investors including CITIC Private Equity (CPE), Greenwoods Investment, and Huagai Capital.

Huagai Capital backed the deal through a 3-billion-yuan ($435.5 million) healthcare industry fund. Guokai Technology Venture Investment, a wholly-owned subsidiary of state capital investor China Development Bank Capital, also participated in the strategic round.

The new financing will allow Sangon to speed up its company growth by expanding talent recruitment and increasing R&D investment, the firm announced at a signing ceremony in Shanghai earlier this week.

Sangon said that it targets to broaden its products and services to assist life sciences professionals and companies worldwide in their fundamental research and product conversion efforts.

With a history dating back to 1995, Shanghai-based Sangon was established by synthetic biologist David Qisong Wang and started as a Sino-foreign joint venture affiliated with Chinese life sciences research firm BBI Life Sciences. It leverages fundamental technologies including DNA synthesis and gene sequencing to develop a portfolio of products covering chemical and biological reagents, molecular biology kits, proteins, antibodies, and laboratory consumables.

The firm targets to provide domestic replacement of life sciences solutions to clients such as universities, life sciences research institutes, hospitals, and pharmaceutical companies in the Chinese market that was previously dominated by foreign brands.

China’s life sciences industry has been catching up in the past decade with significant progress made due to vaccine and medical tech advances during the COVID-19 pandemic. Although the US still leads in financing, accounting for 67% of the global life sciences investments from the venture stage to initial public offerings (IPOs), China has seen its market share increase by 3-5 percentage points in the past five years, according to PitchBook.

“Life sciences, as a frontier of scientific developments, plays an important role in the development of the national economy and the overall society. We have seen China carry out a series of initiatives to promote innovations and commericalisation in the space,” said the investment team of GL Capital Group, which focuses on buyouts and growth-stage healthcare opportunities.

“Moving forward, we will support Sangon in the firm’s strategic expansion, industry cooperation, and business operations to help it expand further,” said the team.

BBI Life Sciences, whose early investors include Qiming Venture Partners, went public in Hong Kong in late 2014 and then delisted from the stock exchange in April 2020 through a HK$1.96-billion ($249.7 million) privatisation deal.

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