Weigao Group Unveils Major Strategic Layout with New Medical Device Innovation Hub and IPO-Ready Blood Purification Subsidiary

Source: Device Home

On July 25, at the first Hongqiao Qianwan International High-end Pharmaceutical and Medical Device Innovation Industry Forum and the unveiling ceremony of the NICE-WEGO Joint Innovation Center, it was revealed that the WEGO Cloud Intelligent Innovation Park is scheduled for completion and delivery in the second half of 2024.

WEGO (Shanghai) International Research Institute and WEGO Cloud Innovation Park are crucial components of WEGO Group's Yangtze River Delta strategic layout. This base marks WEGO Group’s expansion from Weihai to Shanghai and from China to the international stage. In the future, it will become the management headquarters for WEGO’s Yangtze River Delta operations in Shanghai, as well as the headquarters for WEGO Capital Group, WEGO Materials Group, and WEGO's Overseas Division. Additionally, it will house R&D centers including WEGO Orthopedics Group, WEGO Blood Purification Group, and WEGO Research Institute.

Located in the Shanghai Nanqiao Smart Healthcare Innovation Experimental Zone, groundbreaking commenced in 2021. It covers an area of 61 mu, with a building area of 180,000 square meters, a total investment of 2 billion yuan, and accommodates 3,000 office workers.

At the same time, the "NICE-WEGO Joint Innovation Center," "Extraordinary WEGO Medical Device Technology Innovation Center," and "Extraordinary Life Sciences (Hongqiao) International Science and Education Base" were officially established. These initiatives aim to support the technological research, application, and transformation of innovative medical device projects on the WEGO Cloud Innovation Park platform and promote the establishment of a collaborative innovation network.

Among them, the NICE-WEGO Joint Innovation Center is a medical device industry innovation platform co-built by the WEGO Cloud Action Intelligent Innovation Park and the Yangtze River Delta National Technology Innovation Center. It will continuously provide the park with linkage channels and value resource allocation between domestic and international medical device innovation institutions, universities, research institutes, and enterprises in the park, empowering technological innovation and the transformation of achievements.

According to reports, the Yangtze River Delta National Innovation Center is a comprehensive national technology innovation center approved by the Ministry of Science and Technology of China, led by Shanghai and jointly established with relevant institutions from Jiangsu, Zhejiang, and Anhui provinces.

According to the official WeChat account of WEGO Cloud Innovation Park, the park is not a traditional office building complex but a forward-looking medical device industry community integrating professional R&D, pilot testing, incubation, commercial, residential, and recreational functions.

The park is not just looking for spatial corporate neighbors, but aims at industries such as general surgery, early screening and diagnosis, hematology and metabolism, and health technology, attracting industrial ecosystem partners that synergize and coexist with WEGO.

Not solely focused on empowering the R&D process itself, but dedicated to building a medical-engineering transformation service platform that integrates research, investment, incubation, supply chain acceleration, market acceleration, and other multi-factor collaborative elements for the transformation of results.

Currently, WEGO Cloud Innovation Park has formed a technology finance strategic service alliance with strategic partners such as China Merchants Bank, Bank of Communications, and Advantage Capital.

A shared R&D service alliance has been formed with strategic partners such as Shanghai Guoyan Medical Device Testing Center, Z-Tech, Baoyuming Manufacturing, PureFDA, Ingel Medical Testing, and Shunmao Environmental Assessment; a supply chain acceleration service alliance has also been established with partners like the Ferryman Medical Supply Chain Club.

The First Batch of Signed and Incubated Projects

The first batch of signed incubation projects of WEGO was jointly signed by WEGO's signing representatives Wen Sailan and Zhang Pan, along with four organizations: Yuhua Youchuang (Shanghai) Biotechnology Co., Ltd., Shanghai Medical Engineering WEGO Medical Technology Co., Ltd., WEGO Vision (Shanghai) Medical Technology Co., Ltd., and the Limianxin Precision Immunity Assessment Technology Platform.

Weigao Group Co., Ltd. is a company dedicated to developing its main business in medical devices and pharmaceuticals. It has 13 industrial groups and more than 100 subsidiaries, including 3 listed companies and 8 overseas companies, with manufacturing bases established in 10 provinces and municipalities in China.

On April 13, 2024, the founding conference of WEGO Yangtze River Delta Group was held in Shanghai. According to the group, the establishment of WEGO Yangtze River Delta Group is a landmark achievement in implementing the "three transformations" development strategy, an excellent practice in comprehensively promoting internationalization and creating a second growth curve, marking a substantive and crucial step in WEGO's "second entrepreneurship" process.

WEGO Yangtze River Delta Group will adopt the "1+2+3+6" operation model, which is to build one WEGO Cloud Innovation Park platform, establish two centers for talent and innovation, and develop three major sectors including overseas business, the Greater Health industry, and empowerment initiatives across six industrial groups. This new model aims to promote WEGO's goal of achieving a second growth curve through the coordinated development of diversified businesses. It also focuses on establishing an intensive and digitalized new platform governance model, paving the way for the continuous development of the WEGO Group.

In March 2021, at the groundbreaking ceremony of WEGO International Research Institute, Zhao Wentao, the office director of Shanghai WEGO Shengji Medical Technology Co., Ltd., stated: "The company chose Hongqiao for its location due to its excellent geographical position. With Hongqiao Airport and Hongqiao High-Speed Railway Station nearby, it is convenient to travel anywhere. It is also relatively close to the Weihai headquarters, making it easier to receive support from the headquarters. At the same time, this is the place closest to the world, and WEGO needs a foothold to establish closer connections with overseas markets."

Against the backdrop of policies such as bulk procurement and medical insurance catalog negotiations leading to a downward trend in drug prices, WEGO Group's performance has also been affected.

Financial data shows that in 2023, WEGO Orthopaedics achieved revenue of approximately 1.284 billion yuan, a year-on-year decrease of 37.63%; the corresponding attributable net profit was approximately 112 million yuan, a year-on-year decrease of 81.3%. In the first quarter of this year, WEGO Orthopaedics achieved revenue of approximately 348 million yuan, a year-on-year decrease of 10.74%; the corresponding attributable net profit was approximately 35 million yuan, a year-on-year decrease of 62.92%.

The reason for the decline in performance, as explained in WEGO Orthopedics' earnings report, is attributed to the implementation of China's volume-based procurement policy for high-value orthopedic consumables, which led to a decrease in product ex-factory prices. Additionally, price concessions were granted for channel inventory adjustments, resulting in reduced product sales revenue and gross margin, thereby decreasing the company’s related profit indicators.

WEGO Blood Purification Company, which is applying for an IPO, had a project update disclosed by the Shanghai Stock Exchange on June 25. Shandong WEGO Blood Purification Products Co., Ltd. has updated and submitted relevant financial documents, indicating that the review process for WEGO Blood Purification has resumed.

According to the annual report of WEGO, in 2023, the revenue of WEGO Blood Purification was 3.532 billion yuan, representing a year-on-year increase of 2.36%; the net profit was 326 million yuan, with a year-on-year growth of 3.00%. The performance growth rate has decreased compared to the previous two years.

In the IPO prospectus of WEGO Blood Purification, it was mentioned that after the implementation of volume-based procurement, there is a certain degree of uncertainty regarding the inclusion of the company's related products in hospitals, and the hospital entry price faces some downward pressure, which may in turn affect the ex-factory price of the company’s products.

At the 2024 Annual Work Mobilization Conference of WEGO Holdings, Chen Lin, Chairman of WEGO Group, stated that the company will always adhere to the factory-establishment principle of "pioneering innovation and pragmatic consolidation." Guided by the important ideology of continuing to uphold "one center, three adjustments," and with the strategic development concept of "three transformations" as the guiding principle, the company will address new market challenges and development opportunities through innovation and transformation.

He emphasized that the transformation of industrial concepts is the core, and enterprises must focus on their main business, strictly review and adjust their side businesses to maintain competitiveness.

So, will WEGO successfully meet the challenges in the future? What key strategies will they focus on next? We will continue to keep an eye on it.

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