In October 2020, PackGene Biotech, Inc. (PackGene), an integrated solution provider focusing on AAV vector packaging and gene therapy CDMO, announced the completion of a new round of B+ round of financing, which was led by Sequoia China, followed by Decheng Capital. Cathay Capital and Oriza Seed also continued to participate in the investment. This round of financing will be another strategic cooperation between PackGene and investment partners with a global vision and a wide-ranging deployment in the biological industry.
The financing will be mainly used to build GMP-level large-scale AAV production bases, expand GMP production workshops, increase production capacity, promote the development of new technologies and new processes for AAV vectors, and accelerate the industrialization of gene therapy worldwide. This will further utilize PackGene’s leading advantages in the Chinese gene therapy CDMO subdivision field, continue to meet the rAAV vectors demand for growing gene therapy area, and lay a solid foundation for the development of worldwide markets. Since August 2020, PackGene has completed B round and B+ rounds of nearly 100-million-yuan financing. Since 2020, PackGene has made rapid progress in technology research and development, business cooperation and platform construction.
Cao Yibo, Managing Director of Sequoia China, said: “Sequoia China has long focused on the frontiers of biomedical innovation, and gene therapy is an important sub-field. At present, the industry faces two major problems. On the one hand, how to choose the more suitable indications, on the other hand, is how to deliver genes more efficiently to human cells. Therefore, the production of high-quality rAAV vectors with high safety and fast delivery efficiency has become an extremely important part of the industry chain. PackGene continues to develop rAAV in the production field for many years with a great craftsmanship, constantly optimize and improve the production process, and have been highly recognized by domestic and foreign customers including Biogen, a leading company in the field of gene therapy. In the future, Sequoia China will continue to empower enterprises and support the company to develop constantly, helping more clinical projects to be commercialized, and providing occuring hope for more patients.”
Dr. Cui Xiangmin, founding and managing partner of Decheng Capital, said: “Decheng Capital has been paying attention to the frontier exploration and development of gene therapy around the world, especially the upstream vector technology that helps gene therapy. PackGene has a deep accumulation of technology, recognized by leading international gene therapy companies, with a good reputation and customer base at home and abroad. The founding team has solid academic research experience and industrial transformation experience and has gathered a group of entrepreneurial executives. We look forward to the future of PackGene. Hoping that it can develop rapidly and exert a positive influence in the global gene therapy industry. At the same time, using its experience and technology to help more industrial customers, and promotes more gene therapy projects to the clinical stage and commercialization, which will benefit patients all over the world.”
Duan Lanchun, Managing Partner of Cathay Capital, said: “Cathay Capital has been committed to creating a diverse and rich industry ecosystem since its inception. In recent years, we have paid special attention to the development and progress of gene therapy in the medical and health field. In Europe, the United States and China, Gene therapy has been constrained due to its complex production process, long preparation cycle, scarcity of talents and other reasons. PackGene has a very competitive vector technology, the professional production capacity and products of the team have gained recognitions of international research institutions and pharmaceutical giants. After only a few months, Cathay Capital once again added capital to PackGene, which shows the team’s affirmation and confidence in PackGene. In the future, we will continue to empower and further help companies become the global representative brand of AAV vectors with large-scale GMP production. “
rAAV has broad application prospects in the field of gene therapy
AAV (Adeno-Associated Virus) is a virus known in the scientific community to infect humans without causing disease. More than 80% of the population carries AAV. Recombinant adeno-associated virus (rAAV) is a genetically engineered vector. The part of its genome that encodes the viral protein is completely deleted and replaced by a therapeutic gene or gene editing tool. Different serotypes show different tropism and immune response profiles, which are suitable for different applications. By adopting suitable AAV serotypes and vector design, precise targeted therapy of different tissues and organs can be achieved. For example, AAV8 preferentially targets the liver, while AAV1 AAV6 and AAV9 have shown the potential to mediate gene transfer in the heart and skeletal muscle, and AAV9 and AAVrh.10 have been proven to be able to cross the blood-brain barrier (BBB) when injected intravenously. rAAV vector is regarded as one of the most promising gene therapy vectors due to its superior safety, long-term stable expression of therapeutic genes, can target most tissues and organs, supports local and systemic injections, etc., and is regarded as one of the most promising gene therapy vectors worldwide. It is widely used in basic scientific research and clinical research.
AAV process and large-scale production challenges urgently need to break through
In 2017, Spark’s AAV gene therapy Luxturna for retinal diseases caused by RPE65 gene defects was approved by the FDA to be listed in advance with a price of 850,000 US dollars. In 2019, Novartis’ AAV gene therapy Zolgensma for spinal muscular atrophy (SMA) was approved by the FDA for the treatment of SMA patients under 2 years of age. As the world’s only one-time SMA approved for marketing, Zolgensma is priced at US$2.125 million and is currently the most expensive drug in the world. The cost of gene therapy on the market is so high because the viral vector technology and large-scale GMP production are extremely difficult, the process is complicated, the production capacity is short, the production cycle is extremely long, and the experienced talents worldwide for large-scale GMP production of AAV is lack, which leads to the monopoly of AAV vector production by gene therapy industry giants. The GMP-level AAV vector production capacity is basically in excess of queuing appointments abroad. The challenges of AAV process and mass production in the next ten years are in urgent need of breakthrough.
PackGene: a one-stop overall solution from vector construction to GMP production
Based on the above-mentioned challenges and opportunities, PackGene utilizes long-term technical experience accumulation and advanced technological innovation advantages, and is committed to solving the problems faced by the gene therapy industry in order to continuously meet the needs of gene therapy for GMP-grade AAV vector technology and scale, effectively integrate talents and facility resources, improve process development and large-scale production efficiency. In October 2020, PackGene officially announced that its industry-leading “disposable technology” cGMP AAV production base of 1500 m2 was put into full production.
The base is in the Ledy Innovative Science and Technology Park, Science City, Guangzhou Economic and Technological Development Zone, China. It is also an industrial base dedicated to the large-scale GMP production of AAV vectors. It is equipped with world-leading large-scale production facilities and systems. It will meet the urgently need of customers in cooperation for high-quality clinical-grade AAV samples, which will be used in IND declarations, Phase I-II clinical and IIT trials. The completion and full production of the base is an important milestone for PackGene to make good progress in gene therapy CDMO platform construction, GMP team building and clinical-level AAV project implementation.
PackGene GMP production base: the use of disposable technology
The AAV vector’s independent factory officially completed this time by PackGene adopts a large number of leading “Single-use Technology” in accordance with the requirements of GMP construction specifications, with a total construction area of 1500 m2. According to the concept of quality by design (QbD), the clean environment is in accordance with the C+A design standard, and physical isolation is used to strictly separate the different functional workshops. The GMP production area is only used for the GMP production of AAV vectors, effectively avoiding the limitations which shared with CDMO platforms previously.
The GMP base will be equipped with the world’s leading iCellis500 adherence production system (up to 500m2 adherence area) and Xcellerex XDR MO suspension production system. The downstream is equipped with ÄKTA purification system and its chromatography purification process. Various process routes have been established and realized the optimization of the GMP platform process. At present, the output can currently achieve a single batch of 1E+16-17GC or vg AAV production. The three batches of AAV production for the GMP application for IND declaration can be shortened to 1-2 months.
The production and quality control of gene therapy products implemented in the GMP workshop of PackGene are all AAV vectors, and the layout design is optimized according to the optimized process route of PackGene, which greatly improves the space utilization rate and greatly reduces the cost of cleaning and verification and avoids cross-contamination of gene therapy products in the large-scale production process, to meet the requirements of IND or IIT production or registration of gene therapy products.
In addition, PackGene has also explored core process technology routes that can greatly increase single-batch output and reduce input costs, gaining more valuable speed advantages for customers, and helping to speed up the registration of gene therapy products and the production of clinical-level samples.
The GMP AAV production base of PackGene’s full-scale production is equipped with complete hardware and software facilities and GMP management system to ensure the sterility, purity and safety of AAV-based gene therapy products in the production process, and comply with GMP standards. Achieve the reproducibility, reliability and scalability of the production process.
PackGene’s AAV virus packaging advantages
PackGene’s outstanding advantages in AAV technical service providers are shown in: 1. Delivery time advantage: AAV packaging production of 1E+13～5E+13GC can be delivered within 6-9 working days, while the industry generally needs as long as 6-7 weeks or more than 30 working days; 2. Quality assurance: use imported standard products to calibrate the titer test, which is reliable and accurate, the titer is not artificially high, and has the ability to test various indicators; 3. Full-cycle technical services: the thoughtful technical services from AAV gene therapy basic research, early research and development, mid-term GLP to IND and clinical sample production can all be provided.
PackGene is highly recognized by customers worldwide
PackGene can be favoured by the top equity institutions such as Sequoia Capital China Fund and Decheng Capital, thanks to its AAV technology innovation, highly competitive viral vector technology and packaging technology that has won high recognition from many customers all over the world for its high-end quality, reliable and fast supply and high-quality service. In recent years, PackGene has established long-term cooperative relationships with internationally renowned companies such as Biogen, AstraZeneca, CRISPR Therapeutics, LuyePharma, PTC Therapeutics, and Harvard Medical School, Singapore Science and Technology Agency, Tsinghua University, Peking University, Chinese Academy of Sciences and other institutions. Many chinese gene therapy companies have also cooperated with PackGene. It is step by step building a gene therapy technology brand with global influence.
PackGene’s mission: to make gene therapy affordable
PackGene is a national high-tech enterprise featuring “High quality, Fast delivery, responsive services”, focusing on AAV virus packaging and AAV-based gene therapy CDMO services. The company is positioned to provide gene therapy CDMO services with GMP-level AAV technology and large-scale production as the core. It also provides researchers with AAV packaging and vector cloning services, as well as gene therapy from the early stage of research, preclinical development and clinical trials, large-scale AAV overall solution. PackGene’s CDMO service varieties cover multiple directions of gene therapy, such as gene editing, gene activation, RNAi, gene overexpression, non-coding RNA, etc., as well as in vivo or in vitro treatment strategies, providing technology services ranging from plasmid construction, bacterial banking, and cell banking, process development to large-scale AAV production technical services, process transfer, methodological transfer, IND application pharmaceutical research data writing, etc., to meet the needs of AAV-based gene therapy from IND application to clinical trial stage, from rare diseases to common diseases development.
PackGene has always regards “making gene therapy affordable” as its company mission, and the challenge in the process of gene therapy R&D and industrialization: “rAAV serotype development, virus packaging and GMP mass production” as its business engine. PackGene is now accelerating the development, clinical research and commercialization of gene and cell therapy internationally with stable, efficient, economical products and technical services, and creating a global influential gene therapy star technology brand!
About Sequoia China
Sequoia Capital is a great company that has always been committed to helping entrepreneurs achieve a long-lasting foundation , bringing rich global resources and valuable historical experience to member companies. Over the past 48 years, Sequoia Capital has invested in many innovative companies and industry trendsetters. As the “entrepreneur behind the entrepreneur”, Sequoia Capital China Fund focuses on investment opportunities in the four directions of technology/media, healthcare, consumer goods/services, and industrial technology. In the past 15 years, Sequoia Capital China Fund has invested in nearly 600 companies with distinctive technical characteristics, innovative business models, high growth and high development potential.
About Decheng Capital
Decheng Capital was established in 2012 and is a leading biomedical health risk investment company. Decheng Capital seizes the historic opportunity of the rapid growth of China’s medical and health industry and the revolutionary innovation of global life sciences to provide capital and strategic support for entrepreneurs, entrepreneurs and inventors. Decheng Capital’s offices are located in Silicon Valley, New York, and Shanghai, China. Currently, Decheng Capital manages three phases of USD funds and one phase of RMB funds, with assets under management exceeding USD 1 billion.
About Cathay Capital
Cathay Capital as the world’s leading investment fund focused on cross-border investment, Cathay Capital “founded by entrepreneurs, for entrepreneurs service”, since its inception in 2006, has regarded “to help ” spirit as the starting point, provided support for innovation, growth, and internationalization of small and medium-sized enterprises in China, Europe, North America, Africa and Southeast Asia, and is committed to becoming a financial investor with the most industrial resources and industry insights.
At of the end of 2019, the fund’s asset management scale reached 3.5 billion euros, with a total of 14 funds under management, which are divided into three series: small and medium-sized enterprises funds and mergers and acquisitions funds (PE) and innovation funds (VC). At present, it has invested in nearly 150 companies around the world, mainly focusing on companies with great innovation and development prospects in the fields of consumption, TMT, healthcare, automobile travel, energy, financial technology, high-end manufacturing, etc. It has tapped and invested in dozens of high-quality companies such as Sophia, ZBOM Home Furnishing, Health 100, Moncler, Poten Enviro, and Aihuishou, as well as star unicorn projects such as Momenta, Pinduoduo, Drivy, Glovo, and Chime, accompany them to grow into leading companies in various industries.
About Oriza Seed
Oriza Seed is a market-oriented professional early-stage equity investment platform, focusing on the investment opportunities of start-up and growth start-ups in the two major fields of TMT and Healthcare. The total scale of its six funds is approximately RMB 3.4 billion. There are both VC funds and angel funds targeting the six regions of Beijing, Shanghai, Guangzhou, Shenzhen, Suzhou and Hangzhou.
By of the end of 2019, Oriza Seed has invested and managed more than 100 innovative companies, including TZTEK Technology (688003), Jiangsu BR-Robot (688218), Zhongke Cambricon (688256), Top One Logistics company, and Pineapple Bun Light Novel , Ascentage Pharmaceuticals (06855), CStone Pharmaceuticals (02616), EpimAb Biotherapeutics, GeneQuantum Healthcare, WuXi JW Therapeutics, Biocytogen, Osmunda, Canhelp Genomics, ExcelMab, Redpine, DK Medtech, Huihe Healthcare, RootPath, Angitia, PackGene, etc.
About Kaitai Capital
Founded in 2009, Kaitai Capital is a professional venture capital management institution, mainly engaged in innovative investment, industrial investment, and wealth management businesses. At present, Kaitai Capital’s fund management scale exceeds RMB 50 billion. The four main investment areas are medicine and biotechnology, digital health and digital medical care, artificial intelligence and digital industry, community innovation and consumption upgrade.
About Haoyue Capital
Haoyue Capital was founded in January 2014 and is committed to becoming a bridge between China’s medical business and capital. Haoyue Capital’s research fields and trading scopes cover multiple sub-fields such as biomedicine, innovative medical devices, IVD and precision medicine, medical services and smart medicine. Haoyue Capital’s team is composed of senior investment bankers who have been deeply involved in China’s healthcare field for many years. They closely follow the medical and health investment market dynamics and investment trends for a long time. They publish weekly medical and health investment reports and special research reports to interpret new policies and frontier from Haoyue’s point of view.
Grandall Law Firm (Shanghai) Office provided full legal services for this financing.