HONG KONG – A Guangzhou-based biotech company is working with one of the most prestigious universities in China to build a new institute and raise a fund to drive the development of stem cell and regenerative medicine projects.
Grandhope Biotech Co. Ltd. (SZ:300238) and the Office of Science and Technology Development of Peking University (PKU) plan to set up a stem cell and regenerative medicine research institute together and name it PKU Grandhope Stem Cell and Regenerative Medicine Research Institute.
They are also working to raise a ¥300 million (US$48 million) venture capital fund, the PKU Grandhope International Fund, to provide research capital for stem cell and regenerative medicine projects.
Securing capital early might be key to the success of the program, which is focused in an area that is very much in its infancy and, in China, in a relatively gray regulatory space.
"Stem cell and regenerative medicine are highly innovative," according to Grandhope. "In consideration of the long cycle and difficulties of the R&D, plus the limitation of the related regulations, there's an uncertainty in the prospective earnings of this project."
Grandhope's biggest shareholder, Canton Zhiguang Biotechnology Co. Ltd., and Grandhope itself aim to raise funds according to the development plans of the prospective institute. Those funds include the new fund but are not limited to it.
All three – Grandhope, its parent and PKU – have agreed to work to bring in partners and limited partners to make the fund bigger.
"The agreement hasn't disclosed any details about the funders, amount, operation mechanism, risk control and income distribution of the venture capital fund," Grandhope noted in its announcement. "The above factors are uncertain."
Zhiguang, which holds a 38 percent stake in Grandhope plans to donate ¥20 million worth of its shares to PKU. The money will help the university become more internationalized and enhance the collaboration of the company and the school. Grandhope also is hoping that the funds and the links to the top tier university will help attract top tier stem cell researchers and their projects to the new institute.
"PKU and Zhiguang have agreed to build the PKU Grandhope Stem Cell and Regenerative Medicine Institute to bring together international top researchers in the stem cell field, aiming to be the home to clinical application studies of the technological achievements," the company said. It also plans to "build a leading transfer platform for stem cell and regenerative medicine research and industrialization."
PKU will own 40 percent of the joint institute, Grandhope will hold 18 percent and Zhiguang 22 percent. PKU will contribute intangibles while Grandhope will invest about ¥59 million.
The institute's management team holds the remaining 20 percent, which will be set aside for share options, a benefit that could also help attract top tier talent, motivate the management team and consultants.
A big part of the project will be construction of the combined research center, laboratories and a hospital. There also will be an application demonstration base, created in the hopes that a stem cell industrial cluster will develop around it.
The institute will be located in the Guangzhou Economic and Technological Development Zone at the Eastern part of Guangzhou, in southern China.
Grandhope recently inked a separate agreement for a life science enterprise incubator project that will allow the company to build facilities in the development zone.
This is not Grandhope's first project with a top tier university in China or abroad.
The company already was involved in various programs with other academic institutions such as Tsinghua University in Shanghai and the Massachusetts Institute of Technology in the U.S.