The Era of Value Rediscovery: Finding "The Next Big Thing" in Biotech | A BlueRun Ventures Perspective

The biotech sector is undergoing a reckoning. For investors chasing long-term value, this is precisely the window to buckle down and focus on the industry — and to prove their ability to pick real technological innovation.

Recently, VBData (动脉网) sat down with BlueRun Ventures' biotech team. Through its deepening investment work, BlueRun is pursuing technology-driven innovation to find next-generation biotech companies that fit industrial logic.

BlueRun Ventures' interest in healthcare dates back a decade.

In 2012, before the internet healthcare boom, BlueRun began tracking how digital technology could upgrade traditional medical services. It made early bets on sector leaders including Spring Rain, Xingshulin, and Shuomao Technology. That foresight paid off: in 2020, Baike Mingyi, an early BlueRun investment, was acquired by ByteDance for hundreds of millions of yuan; in 2021, Waterdrop, which BlueRun backed across multiple rounds, listed in the United States, becoming China's first insurtech company on the NYSE.

2015 marked two watershed policy moments for China's pharmaceutical industry: the CFDA's July announcement of clinical trial data verification, and the State Council's August "Document 44" — Opinions on Reforming the Review and Approval System for Drugs and Medical Devices. Together, these signaled China's official transition from imitation to innovation. Today, Chinese healthcare has fully transformed into an emerging technology sector centered on innovative technology.

Investors now need to dig deeper and harder, raising the bar for team expertise and industry experience. Against this backdrop, BlueRun Ventures assembled its biotech team, which has already deployed capital across AI-driven drug discovery, proteomics, advanced medical diagnostics, and cell therapy, among other fields.

Though newly formed, this is a battle-tested team. Its members led investments in star projects including Chipscreen Biosciences, Cathay Biotech, and Burning Rock Biotech, and participated in the investment and IPO processes for Biocytogen, AIM Vaccine, and Novogene. BlueRun also prioritized interdisciplinary breadth when building the team — beyond biomedical domain knowledge, members mostly have cross-disciplinary backgrounds, substantial early-stage investment experience, and strong track records.

The biotech sector's volatility over the past two years has seemed inscrutable. While capital market reforms like the STAR Market and Hong Kong's Chapter 18A were structural tailwinds, the sharp correction in biotech stock prices since the second half of 2021 signaled a return to rational valuation.

For BlueRun, forming a biotech team at this juncture means doubling down on its ability to identify "technological innovation." BlueRun Ventures Managing Director Rong Jing told VBData that investors need to follow true industrial development patterns, recognizing that certain fundamentals remain unchanged amid external noise. "This adjustment is an excellent window for both investors and entrepreneurs to focus on the industry," she said. "We all need to adapt our investment logic and strategic planning to the evolving times."

As it deepens its investment work, BlueRun Ventures remains optimistic about biotech's future, guided by a core strategy: technology-driven innovation to find next-generation biotech companies that fit industrial logic.

01 The Value Reckoning: Where Are the Next-Generation Biotech Companies?

The biotech sector is undergoing a reckoning.

Macro-level pressures include a complex international environment, persistent pandemic disruptions, and a slowing global economy. Industry-level, China faces fierce homogenization competition in innovative drugs, centralized procurement squeezing margins, deflating valuation bubbles, and capital recalibrating market expectations.

How should investors on the ground read these shifting waters? For BlueRun Ventures, grounding decisions in industrial development logic has been the biotech team's consistent north star. Look past market sentiment, and biotech's underlying fundamentals remain intact — the long-term opportunity is substantial. And market rationalization often creates ideal entry points. "When I started in biotech investing in 2013, innovative drugs were a relatively niche segment," said Rong Jing. "Now, I receive pitch decks from innovative drug companies across multiple sub-fields almost daily."

Having committed to deploying capital aggressively and consistently, the next question becomes: What does a "next-generation biotech company" look like? BlueRun's biotech team believes fixating on single technologies is too narrow. Rather than segmenting by product or service, BlueRun treats demand as the organizing principle — evaluating technological innovation's feasibility and barriers around specific unmet needs. The needs of oncology patients differ fundamentally from those of obesity patients; liberating diagnostic physicians from tedious work through highly intelligent equipment that improves accuracy while cutting costs represents yet another distinct demand.

On the solutions side, innovative technologies continue emerging within every sub-sector. In BlueRun's view, next-generation biotech companies could arise across any of these areas.

In innovative drugs alone, market hotspots have shifted rapidly from small-molecule chemical drugs to large-molecule antibodies to cell therapy. Today, the field has blossomed into genuine diversity: small molecules combined with AI technology, various conjugate drug designs, cell therapy products with different mechanisms, gene therapy vector development, small nucleic acid drugs applied across disease areas, mRNA technology extended to viruses and oncology — all hold potential to become mainstream biotechnologies. From the more established CXO perspective, digital CROs, CDMOs in the CGT space, organ chip-based R&D service companies, and AI-based end-to-end drug design service firms also stand to become significant future players.

Yet for startups to stand out, exceptional adaptability is essential. The ability to strategize around different market conditions is particularly critical for biotech companies.

From product positioning, biotech firms must account for payer structure differences across markets, aligning with each market's payment logic. The US healthcare system is dominated by commercial insurance. In China, public medical institutions are the primary service providers, public welfare is the foundational orientation of public hospitals, and the national medical insurance fund is the main expenditure source — giving the government core bargaining power. Thus, if a pharmaceutical company's products target China's mainstream healthcare market, pricing and cost control are paramount, and technological innovation must be designed around this commercial logic.

Entrepreneurs must also map out capital market pathways from day one. A-shares, US stocks, and Hong Kong listings each carry distinct requirements and investor preferences, demanding tailored pipeline planning, product/service positioning, and commercialization paths. Investors evaluating projects must continually ask themselves the same questions.

02 Three Selection Criteria, Six Sub-Sectors

When selecting projects, BlueRun Ventures weighs three factors: technological leadership, team background and execution capability, and commercial viability. The firm has focused on six sub-sectors and shared its thinking with VBData.

■ The convergence of biotech and consumer healthcare: biotech-enabled upgrades to consumer healthcare, with market-based pricing capturing commercial value

In recent years, diverse healthcare consumption demands have emerged, many diverging from traditional conceptions of essential medical needs. For example, new-era women's aesthetic demands have spawned blockbuster products like "youth injections" and "baby-face injections"; young people willingly spend over 10,000 yuan treating pet illnesses; urban populations seek weight loss solutions that don't disrupt normal life; parents increasingly prioritize myopia control and orthodontic correction for children.

Some of these demands can now be met through safe, reliable biotechnologies with meaningful technical barriers — and can be commercialized through more market-driven mechanisms, creating substantial investment opportunities.

■ Biomanufacturing upstream and life science tools: foreign-dominated markets where domestic players must strengthen process know-how and quality control

For a long time, biomanufacturing supply chains and life science tools have remained foreign-dominated markets, with domestic equipment holding under 10% share in many sub-sectors. As global supply chains reshape, localization and solving foreign "chokepoint" dependencies have become urgent Chinese imperatives — with substantial policy support, creating investment opportunities.

Unlike downstream drugs and devices, upstream biomanufacturing and life science tools derive their moats more from process design, batch-to-batch consistency, and customer service capabilities including customization. Excelling here is genuinely difficult, hinging on a company's process know-how and quality control capabilities.

However, this segment offers clearer commercial profitability, shorter R&D cycles, and more defined paths to public markets. In the current capital winter, as investors increasingly prioritize risk control, backing sectors with clearer commercialization pathways represents a deliberate stance.

■ Nucleic acid drugs: de-risked druggability poised for harvest in coming years

Nucleic acid drugs are a priority focus for BlueRun's biotech team, which sees several sources of long-term value conviction.

First, with mRNA vaccines and multiple blockbuster ASO and siRNA drugs now approved, nucleic acid druggability risk has largely been de-risked. The 2002 approval of the first fully human monoclonal antibody, Humira, kicked off two decades of explosive antibody growth; tracing that trajectory, the coming years should be nucleic acid drugs' harvest period.

Second, constrained by delivery system and chemical modification bottlenecks, the field experienced significant setbacks. But technological progress — LNP and GalNAc have partially solved delivery challenges — has changed the picture. If delivery systems can extend to specifically target additional organs, small nucleic acid drug development could accelerate further, opening boundless possibilities.

From cost and clinical need perspectives, nucleic acid drugs are particularly well-suited to the Chinese market. Take the PCSK9 target: the siRNA drug Inclisiran enables twice-yearly dosing, versus monthly injections for PCSK9 antibodies. Amgen's PCSK9 antibody Evolocumab, approved in 2015, reached $1.1 billion in 2021 global sales. From both cost and healthcare convenience standpoints, a drug administered in-hospital just twice yearly especially fits Chinese clinical needs.

■ Gene editing therapies: tracking new base editing and other more scalable technologies

Gene editing therapies have proliferated since CRISPR's invention, becoming a market hotspot. Emerging technologies like base editing offer superior scalability. Compared to CRISPR tools, base editing's key advantage is editing without double-strand DNA breaks — higher safety — effectively an iterated gene editing technology. As novel gene editing technologies continue emerging, beyond base editing, prime editing and others enable safer, more efficient editing. These advances could ultimately transition gene editing from ex vivo to in vivo direct editing, and from rare diseases to chronic conditions, with enormous upside.

Gene editing therapies remain early in industrial development, with substantial risk concentrated in rare diseases, and more uncertain commercial prospects than small nucleic acid drugs. But for BlueRun Ventures, betting early on innovative technology is the essence of early-stage tech investing.

■ AI + Biotech convergence: IT-BT is a definitive trend; bullish on AI drug discovery, AI + IVD, and more

The fusion of AI and biotechnology is a definitive trend. For drug development, AI can substantially improve R&D efficiency and is increasingly demonstrating advantages in target discovery and structural design. BlueRun is also tracking AI applications in other healthcare areas — such as AI-integrated IVD devices, where technology validation and scalable deployment are more straightforward than in AI drug discovery.

At this juncture, AI drug discovery requires a balanced view. On one hand, having passed through its hype cycle, the segment's value has returned to rational levels, approaching an attractive investment window. Simultaneously, AI drug discovery remains in early development; transforming pharmaceutical processes will require extensive time and validation. Investors and entrepreneurs alike must respect biotech's developmental patterns and maintain rational expectations.

■ Synthetic biology: the market's absolute hotspot, with emphasis on team industrial experience

In 2019, synthetic biology still occupied a hidden corner when BlueRun Ventures members led the investment in Cathay Biotech. Within a year, Cathay listed on the STAR Market, becoming synthetic biology's first STAR Market listing. With carbon neutrality momentum, policy encouragement, and technological advances, synthetic biology has become the market's absolute hotspot.

Synthetic biology spans wide territory, with fundamentally distinct industrial and investment logics across domains. Drug development still follows pharmaceutical industry patterns; bulk chemicals demand careful product selection and large-scale industrialization capabilities; pilot or even demonstration-scale success doesn't guarantee production-scale success. Thus, BlueRun Ventures particularly emphasizes industrial experience in synthetic biology company teams.

■ Emphasizing technological innovation and convergence, with special attention to interdisciplinary projects

BlueRun Ventures has consistently been an institution that values technological innovation and convergence, paying particular attention to interdisciplinary projects within biotech — brain-computer interfaces, automation equipment, DNA synthesis technology, biochips and sensors, among others.

Take brain-computer interface technology: it spans neurobiology, psychology, physics, computational science, information science, and more, with demanding depth required in each discipline. "Brain-computer interface technology is at a very early stage, but once breakthroughs occur, the market opportunity will be enormous — we'll maintain close attention," Rong Jing noted.

03 Helping Entrepreneurs Cross the "Valley of Death"

In the highly commoditized investment industry, "post-investment value-add" is among the clearest differentiators. As one of China's largest early-stage funds, BlueRun Ventures leads over 80% of its investments at the first institutional round. These early companies often lack mature talent systems, organizational structures, and compensation frameworks — precisely where institutional "support" matters.

BlueRun's post-investment service combines investment team and back-office members, discovering portfolio companies' real pain points and common needs through high-frequency engagement, then delivering targeted activities and services.

Whether in pre-investment or post-investment, understanding entrepreneurs is always an investor's first imperative. BlueRun's biotech team is a hybrid team combining industry background with professional investment experience — composite backgrounds enable deeper insight into whether startup teams' capabilities match their business plans, and greater empathy from the entrepreneur's perspective, deeply understanding practical difficulties in company building and offering constructive help.

Among BlueRun Ventures' biotech team members, one combines neurobiology PhD + biotech investor + internet startup founder experience; another holds a Tsinghua University automation bachelor's + Academy of Military Medical Sciences biology PhD + innovative drug industry background, with doctoral research focused on RNA biological mechanisms. Rong Jing herself has seen multiple invested companies list on A-shares, US exchanges, and Hong Kong, enabling her to offer concrete advice on capital market planning.

VBData learned that BlueRun's biotech team members led investments including: STAR Market's first innovative drug listing Chipscreen Biosciences, STAR Market's first synthetic biology listing Cathay Biotech, oncology gene sequencing first-lister Burning Rock Biotech, STAR Market tumor small-molecule standout InventisBio, Hong Kong's first TCM clinic chain listing Gushengtang, plus gene editing platform Qihan Bio, iPSC newcomer Xuejing Bio, allogeneic cell therapy leader Bioheng Biotech, domestic biomanufacturing upstream leader Jin Yi Sheng Shi, and improved new drug candidate Xiamen Lipin.

Furthermore, cross-domain collaboration has become an important trend in biotechnology, testing entrepreneurial companies' resource breadth. BlueRun Ventures has invested in over 150 companies, many becoming sector benchmarks. Thus BlueRun can not only help portfolio companies connect with diverse industry resources, but also facilitate cross-industry collaboration. Beyond this, BlueRun's biotech team actively shares resource pools with portfolio companies; the team includes formal advisors from top global pharma companies, and one Venture Partner has founded two beauty companies — all offering practical help to portfolio companies.

BlueRun Ventures also periodically organizes unified roadshow activities, providing concrete assistance with follow-on financing. At a recent "Frontier of Everything" Demo Day, BlueRun helped over 70 portfolio companies achieve more than 4,000 investor-project connections.

In May 2022, BlueRun Ventures defied the trend to close a new RMB 5.5 billion dual-currency fund, setting domestic records for 2022 early-stage and USD fund fundraising. From RMB 3 billion in 2016, to RMB 3.5 billion in 2019, to RMB 5.5 billion in 2022, BlueRun's fundraising has "risen steadily." LP confidence stems from BlueRun's strong performance. Now well-capitalized, BlueRun hopes to find more valuable and innovative entrepreneurs in the market.

To achieve more efficient coverage of innovative projects and entrepreneurs, BlueRun Ventures recruits T-shaped talent — combining vertical industry knowledge, sometimes with entrepreneurial experience, with horizontal technology and finance capabilities. Simultaneously, BlueRun is building richer resource ecosystems, strengthening connections with domestic and international research institutions, universities, and benchmark enterprises.

As a venture capital firm focused on early-stage startups, BlueRun is optimistic about early entrepreneurial opportunities across frontier domains, using "technological innovation + model innovation" to solve industry problems and improve commercial efficiency, building commercial ecosystems with entrepreneurs and transmitting innovative value to empower the future.

Since BlueRun Ventures' founding in 2008, it has steadfastly pursued one thing: research-driven early-stage tech investing. "Investing early requires intense conviction; investing in technology even more tests and reveals an investor's individual discernment — all premised on genuinely liking and being good at it," said BlueRun Ventures Managing Partner Jui Chan. Behind these words lies BlueRun's 21-year commitment to tech investing — and the vision and original aspiration of this new biotech team.

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Founded in Silicon Valley in 2005, BlueRun Ventures is a venture capital firm focused on early-stage startups.

Currently, BlueRun Ventures manages multiple USD and RMB dual-currency funds in China, with assets under management exceeding RMB 15 billion, making it one of China's largest early-stage funds. Its investment stage focuses on Pre-A and Series A, covering hard tech and innovative interaction, enterprise technology, new consumer, and healthcare. It has cumulatively invested in over 150 startups, including Li Auto, Waterdrop, QingCloud, Guazi Used Cars, Qudian, Songguo Mobility, Ganji.com, Monster Charging, Yuntu Semiconductor, Machenike, Yunsheng Intelligence, Anxin Wangdun, and BioMap.

BlueRun Ventures has been ranked #1 in Zero2IPO's "China Top 30 Early-Stage Investment Institutions," #1 in ChinaVenture's "China Best Early-Stage Venture Capital Institutions TOP30," and named among Preqin's Top 10 globally consistent high-return VC fund managers.

Additionally, BlueRun Ventures has repeatedly received honors from Forbes China, 36Kr, Cyzone, Caixin Media, CBNweekly, Jiemian, and other media institutions, including "China's Best Early-Stage Firm of the Year," "China's Top Venture Capital Firm," "Most Entrepreneurur-Friendly Early-Stage Firm of the Year," and "Most Influential Early-Stage Firm of the Year."