A renamed CRO with deep ties in the US and China has pulled in another round of capital.
ClinChoice, formerly Fountain Medical Development, has completed a $150 million Series E funding round, using the cash to continue its planned expansion.
According to ClinChoice CEO Ling Zhen, the funds from the round will be part of a two-pronged strategy centered around the company’s physical growth. One area will be going toward new solutions such as remote monitoring and data analytics but the other area will be toward a geographic expansion.
“We want to use this fund to make some acquisitions, expanding into certain geographic areas such as Western Europe, that’s an area where we have a relatively low presence, and also South East Asia, that’s another area where we want to (have) a major presence. So basically, it will be used for both organic and inorganic growth,” Zhen said in an interview with
Endpoints News.
The round will give ClinChoice a runway of 18-24 months with a possible public offering coming in at the end.
It has been a few years since the company last raised funds. Back in 2019, the company netted a $62 million Series D from Goldman Sachs amidst a surge in demand for CRO services. At the time, company execs were positioning the CRO to cater to smaller biotech companies. Since the company’s inception in 2007, ClinChoice has completed multiple financing rounds, with investments from renowned investors such as Lilly Asia Ventures and DFJ Dragon Fund.
Zhen also said that since that funding round the company has also overcome the challenges presented by the Covid-19 pandemic and secured two acquisitions in Asia.
The company was established by Dan Zhang, a former Quintiles exec now at IQVIA, but the company maintains a presence in the US outside of Philadelphia as well. It also has offices in Japan, the UK, India, Armenia and the Philippines, and the company also
opened a development center
in Canada last year.
The company now has over 3,000 employees worldwide with the company covering most drug development areas. The company has also formed partnerships with major corporations such as SAS and Oracle.
ClinChoice’s funding comes when weakening biotech funding is raising doubts about the industry’s growth prospects, with CRO stocks underperforming in the market.
According to a report from Mizuho
, though, investors may be overlooking positive signs as continued tech innovation, elevated levels of capital, pent-up demand and private equity funding in the biotech industry mean that many CROs could see continued growth in the coming years.
As for ClinChoice, Zhen said that the company was more impacted by the pandemic, as the company has seen some reduced spending from their biotech and biopharma clients, but it has not affected their pipeline as a whole.
“We have not seen any major impact on our new business pipeline in our backlog. I think that has a lot to do with the type of customers we have chosen to focus on and I think in the end, this probably gave us an opportunity to maintain our baseline and at the same time to go out to find some relatively lower value companies to for us to acquire so we do see it as an opportunity for us to further grow our business,” he said.
Legend Capital led the Series E round and co-invested by Taikang Life Insurance, Sherpa Healthcare Partners as well as existing shareholders, including Lilly Asia Ventures and Apricot Capital participating.
This story has been updated with comments from Ling Zhen.