From 'Costco' to 'Hermes': How does Transcenta Holding achieve profit breakthrough?

The global biopharmaceutical industry is facing a profound production revolution.

On one hand, the stability and production difficulty of complex molecules such as ADCs, bispecific antibodies, and fusion proteins have surged, posing requirements for process development far beyond those of traditional antibodies. The deepening concept of Quality by Design (QbD) has turned production processes from an ancillary step into a core capability that directly determines whether innovative drugs can be successfully launched and commercialized. On the other hand, global drug pricing is under pressure, making cost reduction and efficiency improvement shift from optional solutions to essential survival strategies. The innovative drug industry faces multiple pressures including cost, quality, efficiency, and flexibility.

CDMOs are caught in a contradictory prosperity. Thanks to the wave of local innovative drugs and the restructuring of the global supply chain, market space continues to expand. However, rapid capacity expansion and technological homogenization have led to the commoditization of production process services, resulting in fierce price competition. The current situation of increasing volume without increasing profits reveals the limitations of CDMO businesses relying solely on capacity expansion for profit growth.

Transcenta Holding, which combines both new drug R&D and CDMO businesses, is directly facing every development pressure mentioned above. Recently, Transcenta entered into its first non-exclusive technology licensing collaboration with EirGenix, Taiwan's largest biopharmaceutical CDMO company, regarding its highly integrated continuous bioprocessing (HiCB) platform. Transcenta is attempting to leverage its proprietary core production process to initiate a new business model for technological monetization.

“The amounts involved in such licensing collaborations often reach tens of millions of US dollars, generating net profits equivalent to 20-30 times that of traditional CDMO services, without the need for heavy investment in human resources and equipment. The saved resources can be redirected towards internal R&D.This collaboration not only signifies Transcenta’s shift toward higher value-added businesses but also marks a key leap from merely providing service output to exporting technology standards globally,' Dr. Xueming Qian, Chairman and CEO of Transcenta, told PharmaCube.

01 Integrated Continuous Flow Technology: A Revolution in Cost and Efficiency

The core competitiveness of biomanufacturing fundamentally lies in the ability of process technologies to balance cost, efficiency, and quality.

Traditional fed-batch processes require cells to reach high density within a short period before harvest. This approach involves fragmented steps—cell culture, protein expression, purification, and formulation filling—with significant waiting times and material losses. Fluctuations in process parameters between batches can easily lead to inconsistent product quality. In contrast, continuous perfusion processes maintain extremely high viable cell density by continuously replenishing fresh media and simultaneously removing metabolic by-products, resulting in high production efficiency and consistently controlled product quality.

Transcenta’s HiCB platform integrates upstream high-productivity perfusion processes with downstream automated continuous purification processes, utilizing its self-developed cell culture medium, ExcelPro CHO, to achieve seamless integration and precise control throughout the entire biopharmaceutical production process. According to measured data from monoclonal antibody and bispecific antibody production, the HiCB platform can achieve a volumetric productivity rate of up to 8g/L/day. Under the same cell line conditions, production efficiency improves 10-20 times compared to traditional fed-batch processes.

This platform is built on the foundation of Transcenta’s team’s eight years of deep technical expertise and even longer experience accumulation. Prior to joining Transcenta, Chief Technology Officer Dr. Christopher Hwang spent nearly 25 years at Genzyme and Sanofi developing production processes and led the third-generation integrated continuous bioprocessing (ICB) team. His experience laid a solid technical foundation for the HiCB platform. 'Dr. Hwang has extensive experience in perfusion and continuous manufacturing processes and has led innovative technology teams to achieve industry-leading productivity at Genzyme and Sanofi. He is the core designer of the HiCB platform and played a pivotal role in its conceptualization, development, and implementation,' added Dr. Qian Xueming.

The goal of the HiCB platform is to significantly increase biopharmaceutical yields, improve product quality, and reduce production costs, with cost reduction being the most critical challenge. To achieve this goal, the platform’s development was divided into three phases.

The first phase focused on upstream process intensification. As the biggest lever for reducing manufacturing costs, the team prioritized developing a high-density, high-capacity perfusion production platform starting in 2018. The development of high-capacity media was the most crucial breakthrough in this phase. By leveraging suitable media and a robust perfusion platform, optimal product generation conditions were achieved, maintaining high cell density and high cell viability to maximize productivity.

The second phase involves strengthening downstream processes and overcoming capacity bottlenecks. In 2020, the Transcenta team collaborated with Merck KGaA to develop an automated, integrated hybrid continuous downstream purification technology. This technology uses disposable equipment, matching high upstream output within a compact space. It not only maximizes economic benefits and production capacity advantages but also reduces the complexity and risks of production operations, simplifies implementation procedures, and accelerates practical application.

The third phase is integration and scaling. The mature upstream and downstream processes will be seamlessly connected and successfully transferred to GMP production workshops for scaled-up amplification. The team closely collaborates with the production department to ensure robust operation and high-quality output at production scale.

"The most important thing is to focus on commercially applicable solutions, avoid over-engineering, and rapidly advance implementation," said Dr. Michael Huang. Once products enter the commercial stage several years later, every day's delay in putting the HiCB platform into use will directly lead to value loss for the product pipeline and partners. Speed is crucial, which is why Transcenta was able to quickly build a complete HiCB system within eight years.

Efficiency improvement and cost reduction go hand in hand; the HiCB platform can cut production costs by at least 50%. Dr. Eric Qian emphasized that this percentage is not based on theoretical assumptions but on actual factory operational data, measuring the use of the same cell line produced using traditional fed-batch cultivation and Transcenta’s continuous process.The latter reduced costs by a solid 50% during operation.。

In addition to cost reduction and efficiency enhancement, the HiCB platform has brought about a revolution in production flexibility and sustainability. Its modular production platform achieves better spatial utilization, allowing production capacity to be quickly and flexibly adjusted according to market demand, greatly reducing the risk of huge fixed asset investment due to market fluctuations and delays from repeated regulatory approvals. Additionally, smaller factory footprints, lower energy consumption, and material usage align with global green manufacturing trends.

02 Monetizing Technology and Elevating Business: From CDMO Services to Platform Value Sharing

The collaboration with Eterne Genomics unveils the beginning of Transcenta's future business model. Dr. Eric Qian pointed out that Transcenta began laying out this strategic transformation two years ago, aiming to reconstruct the company’s revenue structure, profit quality, and growth logic.

Why choose technology licensing instead of merely expanding CDMO services? Comparing the economic models, traditional CDMO service revenue needs to offset labor, equipment depreciation, and consumables costs, leaving limited profit margins. Growth heavily relies on capacity expansion and workforce size, making it a typical 'asset-heavy, labor-intensive' model, where profit margins are easily eroded by price wars.

The technology licensing model features 'asset-light, knowledge-intensive' characteristics. Its revenue includes upfront licensing fees covering part of the R&D costs, as well as subsequent milestone payments and royalties for technology development upgrades. Each licensing collaboration provides new application scenario validation for the platform, driving iterative improvements, while future external licensing prices will gradually increase due to technological upgrades.

Dr. Qian XueMing believes that as traditional CDMOs are currently embroiled in price wars, participating in 'Costco'-style price competition with a technology platform like HiCB, positioned as the 'Hermes' of platforms, cannot fully reflect its value. The technology licensing model, however, allows for direct monetization of the technology premium.

However, licensing the technology to other competitors in the CDMO business raises the question of how Transcenta Holding will control the risk of technology leakage and maintain its core competitiveness.

First, the continuous perfusion process is extremely complex and requires us to provide hands-on guidance to our partners to help them master it. Second, our core advantage lies in our cell culture medium – continuous production requires customized optimization of the medium for specific cell lines. We provide optimized medium products without disclosing the formula, and partners must place custom orders with us.Without a matching proprietary culture medium, it's very difficult to successfully apply continuous production technology, which is our core competitive advantage.Additionally, there will be some extra service and consulting revenue.” Dr. Qian XueMing explained.

Furthermore, under this strong supply stickiness logic, the ongoing revenue potential of the culture medium and related businesses is no less than the technology licensing itself.

Currently, the market price of imported culture media can reach several hundred yuan per liter, while domestically produced culture media costs tens of yuan per liter. It is estimated that for a 10,000-liter continuous production project, the cost of culture medium for one batch of production is as high as $100,000. If ten batches are produced annually, a single customer’s culture medium procurement volume would amount to $1 million; if thirty batches are produced, the procurement volume reaches $3 million.If 10-20 customers adopt Transcenta'sGroup"culture medium, the business could generate annual revenues of $50-$100 million solely from culture medium sales.In Dr. Qian XueMing’s view, as the number of customers grows, the culture medium business will continue to expand, potentially becoming even more profitable and stable than the technology licensing business, forming a virtuous cycle of profitability.

Building on the above revenue logic, Transcenta Holding decided two years ago to shift its strategy from the CDMO business to technology licensing. The first technology licensing deal via the HiCB platform was in a 'non-exclusive' format, and Dr. Qian Xueming is highly confident about securing ongoing licensing partnerships, aiming to achieve at least one technology licensing deal per year going forward. This confidence stems from the fact that continuous manufacturing is the prevailing trend. According to BioPlan's 2025 Annual Biopharmaceutical Manufacturing Report, 38.8% of biologics facilities globally indicated plans to evaluate new continuous upstream bioprocessing technologies within the next 12 months.

Moreover, Transcenta Holding's existing CDMO business will undergo an upgrade. By stepping away from low-end price wars, the company’s CDMO division can now focus on serving cutting-edge projects with complex molecular structures and challenging process development. These clients are more willing to pay a premium for solutions, elevating the CDMO business into a high-technology, high-value-added niche market.

For Transcenta Holding, the ultimate goal is to make its Hangzhou facility profitable, which would give both primary and secondary market investors a clearer and more predictable outlook. 'Even if the new drug pipeline carries high risks, Transcenta Holding can still sustain long-term growth through technology licensing and related businesses. Meanwhile, as our technological platforms continue to mature and advance, we will be able to develop more innovative molecules, accelerate pipeline progress, ensure smoother future financing, and attract more corporate collaborations.'

03 The Pressures and Drivers of China's Biomanufacturing

At a macro level, Transcenta Holding’s practices provide a concrete and profound case study for examining the upgrading path of China's biopharmaceutical industry within the global value chain, which also touches upon the true essence of 'new productive forces in biomanufacturing.'

In the past, China’s biomanufacturing advantages were mainly reflected in large-scale, highly efficient engineering execution, while core process technologies, key equipment, and consumables relied heavily on imports. In Transcenta Holding’s vision of extensive technology licensing, one can see its attempt to gain broader influence and a stronger voice in the standardization of global production processes.

Dr. Huang Guangcheng’s observation is highly enlightening—Market pressures in China have driven an accelerated application of advanced technologies.Previously, in the US and Europe, the adoption of continuous bioprocessing proceeded more gradually because reducing production costs does not always yield short-term commercial returns, risk management in the industry is relatively effective, and significant investments have already been made in existing batch production facilities. In contrast, pricing pressures and market competition in China have made cost and efficiency issues far more urgent, naturally accelerating the adoption of high-density and continuous production technologies.

The payment ceiling in the Chinese market and intense homogenized competition objectively force companies to pursue extreme production efficiency and cost control. This innovation, driven by survival pressures, may allow China to achieve partial surpassing of Western countries in the scaled and commercial application of advanced manufacturing technologies.

And now is precisely the starting point for China's technological upgrade to empower the world. The US and even global markets have, in the past two years, been driven by measures such as the Inflation Reduction Act and the current administration’s Most Favored Nation pricing approach, leading to mounting pressure on drug pricing and an ever-growing demand from companies for cost reduction and efficiency improvements.

In the future, competition in the global biopharmaceutical supply chain will not only be about production capacity but also about technological iteration and standard-setting. If platforms like HiCB, developed and defined by Chinese companies, can be increasingly adopted by CDMOs and pharmaceutical enterprises across the Asia-Pacific region and even globally through licensing models, thenChina will no longer merely be the 'manufacturing workshop' for global biopharmaceuticals but could become a source of advanced biopharmaceutical process technologies.This will profoundly reshape the landscape of global industrial division of labor.

References

1.Y.Timol, Report: Nearly 40% Of Biomanufacturers Eyeing Continuous Processing. Bioprocess Online, 2025.

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