(Yicai) May 24 -- Shanghai is accelerating the establishment of a fund of funds to finance startups, including those in the biopharmaceutical industry, one of the eastern city's key sectors, Yicai learned during the 2024 Shanghai International Forum on Biotechnology & Pharmaceutical Industry.

The fund that will invest in other funds will guide capital to early-stage, small-scale, and hard-tech ventures.

In March, the municipal government announced its plan to establish the CNY100 billion (USD13.8 billion) FoF for the three key industries of integrated circuits, biopharmaceuticals, and artificial intelligence.

Shanghai will further enhance its policies for innovative development across the chain of the biopharma industry, the head of the local science and technology commission said.

For instance, the city will accelerate the construction of high-quality incubators, research-oriented hospitals, and contract research organization institutions, attract top global scientific and technological talents, strengthen links between investment and loans, and enhance investing and financing cooperation, the official said, adding that it will also facilitate the open circulation and shared use of data in the industry that makes recombinant protein, antibody, and cell therapies.

The industry requires not only original technology innovation but also policy support and -- even more importantly -- capital support to develop, said Li Jizong, director of the Shanghai Center of Biomedicine Development.

"An industry cannot achieve rapid development without strong capital support," Li said. “Of course, we believe that technologies or drugs with genuine innovative value that can address clinical needs are inevitably targets of capital pursuit.”

The scale of Shanghai's biopharmaceutical industry rose 5 percent to CNY900 billion last year from 2022, according to official data. Over the past five years, the financial hub accounted for more than one-third of the nation's new overseas drug licensing projects worth over USD500 million.

Shanghai is behind three out of five cell therapy products approved for clinical trials in China. For immune cell therapy, a type of cancer treatment, Shanghai accounts for one-third of the domestic total of clinical permits. The corresponding share is one-fourth for gene therapy and one-fifth for stem cell therapy.

Editor: Emmi Laine