One of Germany’s largest drugmakers is launching a seed fund to promote startups in China.
Darmstadt, Germany-based Merck KGaA said Friday it had established a seed fund worth 100 million Chinese yuan, or $14.1 million, under the umbrella of its $334.2 million venture capital arm, M Ventures. Merck KGaA does business in the U.S. under the name EMD Serono, in order to avoid confusion with Whitehouse Station, New Jersey-based Merck & Co., which itself operates under the name MSD outside of North America.
In addition to creating the seed fund, Merck KGaA also opened an innovation hub in Shanghai and is planning another one in the southern metropolis of Guangzhou, which it will open next month.
“Our RMB 100 million China seed fund underlines our commitment to invest in the Chinese market,” CEO Stefan Oschmann said in a statement at the opening of the Shanghai center, referring to the abbreviation for renminbi, the official name of the Chinese currency. “Our China innovation hubs will accelerate our innovation development nationwide.”
Biotechnology and pharmaceuticals are a top priority in the Chinese government’s industrial development strategy, with numerous drugmakers operating in the country and expanding abroad into Western countries.
In January, Beijing-based BeiGene received breakthrough therapy designation from the Food and Drug Administration for zanubrutinib, a Bruton’s tyrosine kinase inhibitor it is developing for non-Hodgkin’s lymphomas and chronic lymphocytic leukemia, as a potential competitor to AbbVie and Johnson & Johnson’s Imbruvica (ibrutinib) and AstraZeneca’s Calquence (acalabrutinib). The company had a partnership with Summit, New Jersey-based Celgene to develop its PD-1 inhibitor, tislelizumab, though it regained rights to that drug in June due to Celgene’s pending buyout by Bristol-Myers Squibb, which has its own PD-1 inhibitor, Opdivo (nivolumab).
Merck KGaA said that its Shanghai hub, which was established last year, occupies a space in the city’s New Bund World Trade Center. It has already established partnerships not only the fields in which the company specializes, but also in artificial intelligence-enabled health solutions. To date, six startups from China and other Asian countries have taken part in its accelerator program.
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