Venture

$420M fund comes to LYFE, with plans for a trans-Pacific investment strategy introducing US biotechs to China

Less than two years after its launch, Shanghai-based LYFE Capital has come up with an upsized biotech venture fund. And this time it’s spreading its wings directly into the US market, where it plans to start making some new bets on a slate of life science ventures interested in developing a China strategy.

LYFE II came up with $288 million and RMB 900 million, or $131 million, for a total of about $420 million. In late 2015 LYFE debuted with $298 million in its first fund, racing through that at a fast pace. This new fund also includes a new office in Palo Alto, CA, where the venture group plans to add more stakes in the pharmaceutical, medical device, diagnostics, animal health, healthcare services and digital health sectors.

James Zhao

LYFE has already helped 5 US companies create ties with partners in China, says founding partner James Zhao. This new fund with a higher presence in the US allows LYFE to expand on that, he adds, particularly as regards biopharma, devices and diagnostics.

Yao Ho

“There’s a broad need for American companies trying to understand the China market,” says Yao Ho, who will be based in the US. Yao Ho has an undergraduate degree from UC Irvine and an MBA from Tsinghua University.

US biotechs have been heavily engaged in finding new partners in the giant Asian economy over the past year. Kite Pharma recently highlighted that trend with its joint venture with Fosun Pharma to develop and market CAR-T drugs for the Chinese market. And many more are in the early stages of trying something similar.

The booming biotech scene in China, meanwhile, has inspired the growth of some major venture funds with international aspirations. WuXi’s Ge Li recently decided to throw in his portfolio of 40 biotechs at WuXi Healthcare Ventures with Frontline BioVentures’ 20 investments, accounting for some $800 million of managed assets in a new VC named 6 Dimensions Capital. Frontline chief Leon Chen — a veteran Fidelity hand — will take over as CEO with Ge Li standing in as chairman.

Some of LYFE’s initial funds were used to back Guangzhou-based cancer diagnostic start-up Burning Rock Biotech. Zhao adds that he expects that this second fund will play out on a more traditional timeline, taking three or four years before they go back to raise Fund III.


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