The company has raised $300 million to establish the second fund, it announced last week.
The fund is unique in that it is a Chinese fund with a government affiliation, but it is managed and controlled by Israeli partners, Gleitman told The Jerusalem Post. It also is the only Chinese fund under foreign management licensed to make private-equity investments in China by the Chinese Securities and Exchange Commission, he said.
The fund establishes Chinese joint ventures in partnership with foreign companies. But instead of local Chinese investors seeking rights to the Chinese market and control of the joint ventures, the Chinese subsidiaries established in cooperation with GIBF are controlled by their foreign parent companies, GIBF said in press release.
“This is in fact the only viable option existing today for foreign companies to build value in the Chinese market and not to give up this huge potential value at an early stage to a local partner,” it said.
The new fund will operate on a similar model, but it will focus on clinical trials.
“There is currently a global harmonization of clinical data, and therefore, the leading regulatory authorities recognize clinical trials conducted in other countries as long as they are carried out in accordance with accepted standards,” Gleitman said. “It is our intention, therefore, that the Chinese joint ventures we establish will conduct some of the global clinical trials in China, funded by our fund, and the results of the trials in China together with the results of the parent company’s trials in the West will be submitted as one package to the US, Chinese and European regulators.”
The trials will be conducted at Guangzhou’s hospitals in collaboration with all relevant parties, including the local Health Ministry and the Chinese food and drug administration, while adhering to proper international standards, according to another one of the fund’s partners, Prof. Shlomo Noy.
Recruitment for clinical trials often challenges Israeli biotechnology companies, and running trials in China should help ease that burden, Gleitman said.
Moreover, achieving regulatory approval for treatments in China will open up these companies to a new and large market from the get-go.
The establishment of such a fund during the COVID-19 pandemic was not expected, as the country has been closed to foreigners for almost 18 months.
GIBF’s infrastructure in China includes a local team, with administrative and legal staff, and close contacts with hospitals and regulators that can enable these trials, Gleitman said.
The company has not yet launched any new trials, since the fund was just established, but the first trials should begin within the next few months, he said.