The success rate of innovative drug development is very low, while the cost is enormous, with the average cost of developing a new drug ranging from $1 billion to $2 billion. This cost includes the average cost of a failed development pipeline.

Drug development costs have increased dramatically over time. A systematic study in 2011 showed that the cost of developing a new drug was $92 million in the 1960s, but rose to $884 million at the beginning of this century.

Among them, domestic pharmaceutical companies have developed relatively few new drugs. Haizheng's Haizemaibu tablets cost 225 million yuan, Hengrui's pyrotinib 520 million yuan, PD-1 (application for production) 155 million yuan, Alisartan medoxomil less than 300 million yuan, and Icotinib's cumulative R&D expenses around 150 million yuan. Moreover, the above costs only represent the cumulative investment in this project and do not include the investment in failed R&D projects or the time cost of funds.

Although endorphins are not new drugs, they have a wider range of applications and are expected to generate higher returns in the future.

A 10% stake for 50 million RMB isn't cheap, but it's definitely not expensive either.

Zheng Li continued, "President Lei, 10% of the shares for 50 million is my bottom line."

"The reason we sought your venture capital is because you are an alumnus of Jiangcheng University, and we have a basic level of trust in you."

"The concession I'm willing to make is that, in the early stages before the endorphin clinical trial results are available, the company's finances can be assigned by you."

The finances are assigned by Lei Jun, which means that Zheng Li cannot freely use the company's cash. This is a condition that powerful angel investors usually demand.

Lei Jun readily agreed: "Okay."

Both parties reached an agreement that Lei Jun would invest 50 million RMB for 10% of the company's shares, while Zheng Li would contribute technology for 90% of the shares.

Lei Jun: "What I'm about to say is not as an investor, but as a senior entrepreneur from Jiangcheng University."

"Starting a business is a very difficult thing, but it can also bring you the most extreme feedback. The emotional feedback you get when you succeed in starting a business is unimaginable for ordinary office workers."

"How old are you?"

Zheng Li: "Eighteen years old."

Lei Jun remarked with emotion, "Youth is truly wonderful. Seeing you reminds me of my days at Jiangcheng University many years ago."

"I may not be as talented as you, but I am still somewhat gifted."

"After graduating from university, I worked for others first and then started my own business. When I founded Dami, I went around looking for investors. When people heard that I was going to make smartphones, they asked me what I would use to compete with Apple?"

"Almost all investors are not optimistic about rice. First of all, you can't compete with Apple. Where will the profit come from if you rely solely on cost-effectiveness?"

"I told the investors that I would replicate Steve Jobs' success, but the problem was that they didn't believe me. They thought that China didn't have the soil for innovation, and that I couldn't become Steve Jobs."

“I assembled a team of more than 200 people, more than half of whom came from Motorola, Microsoft, Kingsoft, and Google.”

"I talked on the phone with Mr. Liu of Morningside Capital for four hours before I finally got the investment."

"In the end, I secured $41 million in funding and successfully listed my rice business on the Hong Kong Stock Exchange."

"What I want to tell you is that starting a business is a very difficult thing, and there will be many things that need to be overcome little by little along the way."

2019 was a very difficult year for Lei Jun. After Da Mi was listed on the Hong Kong Stock Exchange in 2018, its stock price continued to fall, and by mid-2019, the stock price had been nearly halved.

Even more critically, Xiaomi signed a performance-based agreement with its early investors before its IPO. If the market capitalization could not exceed $75 billion by December 13, 2019, Xiaomi would have to pay the issue price plus 8% accrued interest plus declared but unpaid dividends.

At that time, rice's market value was only $30 billion, a 40% drop from its initial public offering price.

Lei Jun is under immense pressure right now. He can't break into the high-end market, which is dominated by Apple and Huawei. In the mid-to-low-end market, Honor is directly competing with Xiaomi, and OPPO and Vivo are making it hard for Xiaomi to breathe.

Zheng Li nodded: "Starting a business is indeed not easy. There are too many variables that you can't control, and any one of them could lead to your failure."

"Many entrepreneurs, whether they succeed or fail, don't know why they succeeded or failed."

Lei Jun nodded and said, "Your understanding is quite profound. Starting a business in China is becoming increasingly difficult."

"You have the technology, which is your moat that others can't easily break through. I don't know much about the pharmaceutical field."

"I have a lot of authority when it comes to the internet, because I've been in this industry for too many years."

"The internet is now more like a competition for existing resources. The incremental services that the internet provides to society, businesses and individuals through the high-frequency flow of information have already been largely divided up."

“Now, the focus is more on going down to the grassroots level and breaking down previous organizational relationships to start a business. This is true for both Didi and Pinduoduo.”

“Every track was packed with players.”

Lei Jun recalled, "I once invested in a company called Vancl. You're only eighteen, so you probably haven't heard of it."

What does Vancl do? Vancl was founded in 2007 and is an online e-commerce platform that specializes in selling clothing.

"Vancl is a typical venture capital-backed company. In just three years, it completed four rounds of venture capital funding, investing in well-known institutions such as IDG Capital, SoftBank, Legend Capital, and Tiger Asia."

“In 2010, Vancl sold 30 million T-shirts, shocking China’s apparel industry, as this sales volume was more than five times that of the largest apparel brand in the year.”

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