Nisa Leung, managing partner leading Qiming Venture Partners‘ healthcare investments, answers five questions in this video interview with Nina Xiang, host of China Money Podcast.
Q: What is a key industry trend that is overlooked by most people?
A: I think everybody has been really into mobile health and new drug discovery companies in the past couple of years. Valuation has gone up a lot.
Before that, everyone was really into the healthcare services sector. I just think that everything else is very exciting, such as pharmaceuticals, medical devices, in vitro diagnostics, and healthcare IT.
The overall Chinese healthcare market has been growing very rapidly. But on the pharmaceutical side, perhaps it’s going to slow down to single-digit growth from over 20% growth rate, though it’s still going to be a growing market.
Q: Describe an ideal company that you would like to invest right now?
A: I’m actually quite happy with my portfolio right now. But I would say one of the most exciting companies we’ve been involved with is Zai Lab.
We see a lot of potential in development and commercialization for phase II and III drugs that’s so expensive to continue discovery in the U.S.
Give the fact that China is the second largest pharmaceutical market in the world, (this business model) makes a lot of sense.
Q: If you were the Chinese regulator, what changes to existing laws or new laws would you make?
A: The healthcare reforms have made a lot of exciting new laws. The (regulator) has shortened the IND (investigational new drug) approval period to two or three months from one year or more previously for oncology products.
They have also lessened requirements for pharmaceutical companies to have their manufacturing facilities before they get approved for their drug. That’s a big plus for asset-light companies.
If I can make a new law, I’d probably look into how can we compensate doctors better. Doctors in China are still under-paid. But it’s also very difficult given how many doctors are in the system. It’s not an easy task.
Q: What is the most difficult investment decision you had to make?
A: Whether or not to invest in a two-man team, and whether or not to believe in this person even without a protocol. This is the case of Zai Lab. It was a tough one to get my partners on board.
Another difficult situation is when the company took more than double the expected time to build a prototype. I’ve been asked by my partners whether we should pull the plug or give them a bit of bridge.
We have given it a bridge every single time, and so far so good. The company is getting ready for an IPO, so we are happy about it.
Q: What is the ten-year average return number that will make you proud?
A: I think being able to achieve top 10% compared to other funds will make us proud.
But for us investing in healthcare, we are not only looking at return, but also supporting great pharmaceutical companies to come up with products for the market, which makes us very proud.
One example is a vaccine company we invested in (Tianjin CanSino Biotechnology). It is the only Ebola vaccine company in China and the third in the world after Merck and GSK.
They are also developing a whole suite of children’s vaccines that are going into clinical trials.