SHANGHAI – In China, it is often said there is more venture capital (VC) money sloshing around than there are good assets, or companies in which to invest. That poses an interesting conundrum for VCs: They see the sizable money-making potential in China – given the increasing market demands of a rapidly aging population with significant unmet medical needs – but face a lack of readymade investment vehicles to fund.

Jimmy Wei, managing partner of Shanghai-based I-Bridge Capital, a newly formed fund that builds companies through incubation, said he believes he has the answer.

"In China, the market is huge and growing very fast," Wei told BioWorld Today. "The key is to find good technology with very little risk and try to bring it here. This is quite different from [the] typical early stage VC approach in the U.S., which focuses on potential breakthrough technologies, but it is a better fit for China."

I-Bridge – the "I" representing innovation in drugs, products and technology and the "bridge" as a connector between China and developed markets – is a recent offshoot of C-Bridge Capital, a late-stage growth fund with $300 million in assets.

Early stage I-Bridge has $100 million to be invested in eight years, with a total 12-year fund term; investments will be divided between 80 percent pharma and biotech, reserving 20 percent for devices, health care IT and services.

One of China's largest pharmaceutical companies, Tasly Group, known for traditional Chinese medicine, is a major limited partner and backer of both funds, providing not only access to its deep financial reserves but also to its sizable resources to help out invested companies with everything from due diligence to clinical trials and commercialization.

C-Bridge seeks deals with companies close to commercial launch with high degrees of clinical visibility, and thus lower risk. The fund has signed eight deals with rising stars such as Innovent Biologics Inc., Berry Genomics Co. Ltd. and Ascletis Pharmaceuticals Co. Ltd. Jinzi Wu, chief executive of Ascletis, is a big fan of C-Bridge, citing to BioWorld Today that the fund operates a trusting, hands-off approach that lets company founders get on with what they need to do.

GETTING OVER THE OPERATIONAL HURDLE

The I-Bridge approach, however, looks to support assets, ideas or people often before they are fully formed companies and is prepared to take a more involved role, having identified a crucial issue for many start-ups: a lack of operational or business building experience.

In Chinese, Wei said he is building a "Xinyao meng gongchang" – a new drug dream factory.

Wei has developed that approach slowly over two decades, picking up an array of scientific, management and investment skills and building an enviable network along the way.

He has the scientific chops, having earned his doctorate in biochemistry from North Carolina State University, with R&D experience at Duke Medical Center and the Chinese Academy of Sciences. Wei also has management experience, having earned an MBA. He has done time as a McKinsey management consultant, as the vice president of Hutchinson Medipharma, general manager and board member of JHL Biotech Inc. and co-founder of Zai Labs Ltd. Add to that Wei's VC investment savvy; he previously worked for WI Harper Group, Burrill China Group and KPCB.

With I-Bridge, his primary interest is building new companies in China and that often means getting the scientists over the business hurdles they face.

During his time at KPCB, he was closely involved in the formation of Taiwan-based JHL Biotech, helping the team of former Genentech scientists refine their business plan, register their company, obtain funding and even diving into the detailed work of identifying where to locate in China and supervising engineering plans.

"It is a great way to invest in China, to start early, to be deeply involved and then to try and take the company public," Wei said. "That is the best model in China right now. I think JHL may be the fastest biotech in history to go from scratch to an IPO [in Taiwan], in two and a half years. It was a very good combination of business investors and scientific expertise; many companies in China are not scientist-founded companies."

Similar to his JHL experience, Wei installs himself as CEO or chief medical officer of I-Bridge-invested companies for the time it takes to get them off the ground, working with the core team to help them answer key questions such as: What is the business strategy? What do you want to become? What kind of team do you want to recruit and who are you going to approach?

STARTING FROM CHINA'S GREATEST UNMET NEEDS

When deciding on investments, however, I-Bridge already has a plan. It seeks to identify therapeutic areas in which the unmet medical needs are greatest, and then seeks the best products and technology available, whether that would be in the U.S., Europe or Asia.

From the beginning, Wei has had in mind an ambitious to-do list: to build the best diabetes company, the best antiviral company, the best innovative vaccine company– the list goes on – in China

"It is not that difficult. You look at the gap between U.S. and China and you look at which areas where the gap can be filled quickly. You try to fund the best team you can find, find the best technology and assets," Wei said.

"Sometimes you start from scratch; sometimes you start with a team with some technology or expertise – you can start either way," he added.

To date, I-Bridge has funded five companies but plans to build between eight to 10 overall, each the leader in its field. The only I-Bridge-backed company that has made a public announcement is Tasgen, a subsidiary of Tasly Pharmaceutical Group Co. Ltd., which recently did a deal with Genexine Inc. (See BioWorld Asia, Oct. 21, 2015.)