Xiamen Weizheng Biotech and Abbott Expand Strategic Partnership: A Model Collaboration Between Chinese and Global IVD Leaders

As the localization of production advances rapidly in China, imported brands are also seeking various coping strategies, such as integrating global resources to invest in the Chinese market, or penetrating the mid-to-low-end market segments, or adopting a localization strategy to closely collaborate with domestic brands.

Recently, Xiamen Wiz Biotech Co., LTD. held a strategic cooperation signing ceremony with Abbott Rapid Diagnostics, a globally renowned leader in the IVD industry. This is a renewal of their partnership, which first began in 2017. Abbott was founded in Chicago, USA, in 1888 and operates in areas such as diagnostics, medical devices, nutrition, and pharmaceuticals. After a century of development, it has become an undeniable international IVD giant and a centennial enterprise.

This move represents its expansion of cooperation with domestic partners.Conversely, it may not be a breakthrough for Wiz Biotech. Since the epidemic battle, Wiz Biotech has also been facing challenges in the POCT field., through this expanded cooperation, we hope to get out of the confusion and open up a new path.

A company that can cooperate with giants naturally has some strength. Since its establishment in July 2013,Wiz Biotech has been deeply engaged in the early cancer screening of the digestive system, with over 120 certified reagent menus obtained both in China and internationally.IncludingGastrointestinal testing, infectious disease testing, tumor marker testing, inflammation marker testing, thyroid function testing, sex hormone testing, and drug testing seriesTo date, Wiz Biotech has obtained 63 intellectual property rights, 33 product licenses for Class II and Class III in vitro diagnostic reagents in China, as well as 2 product licenses for immunoassay instruments and 188 international certification certificates. Its notable product is the Calprotectin Test Kit, used to assist in diagnosing and assessing the severity of intestinal inflammation. Internationally, 19 of its products, including the Gastrin-17 Assay Kit (Fluorescence Immunochromatography) and the Mycoplasma Pneumoniae IgM Antibody Test Kit (Colloidal Gold), have been approved in Malaysia.

Overall, it is a small and micro growth enterprise. In the popular niche track of digestive system diseases, there are many leaders, and it is not easy to carve out one's own territory.

Xiamen Wiz Biotech Co., LTD was listed on the NEEQ in February 2017. The company is engaged in rapid diagnostic reagents and supporting instruments, and has established a relatively complete technology platform and product line, including immunochromatographic colloidal gold technology platform, immunofluorescence technology platform, molecular diagnostics technology platform, as well as an instrument technology platform, which are standard and compliant.

As a small and micro-sized enterprise, the most impressive news to the public should be during the pandemic, around 2022, when it was announced that all antigen test kits produced by the company would be requisitioned by the local government to prioritize supply to government departments. If customers could not wait for delivery, Wiz Biotech promised full refunds. Once the situation stabilized, they would actively expand production capacity and make every effort to deliver on time.This is both the brilliant debut of a POCT star and the young enterprise that has contributed to the fight against the epidemic.

With the boost from COVID-19 testing, the net profits for 2020 and 2021 (calculated based on the lower of the net profits before or after deducting non-recurring gains and losses) were RMB 13.81 million and RMB 66.55 million respectively. The weighted average return on net assets (calculated based on the lower of the net profits before or after deducting non-recurring gains and losses) were 116.29% and 108.17% respectively, meeting the first financial standard for listing on the Beijing Stock Exchange. It was disclosed that in 2021, revenue reached RMB 276 million, a year-on-year increase of 375.47%, and net profit was RMB 68.13 million, a year-on-year increase of 341.44%.Obviously, the issue of sustainable development is a consideration for any exchange.

According to the 2023 annual report, revenue was 63.19 million yuan, a year-on-year decrease of 81.53%. Net profit attributable to shareholders was a loss of 47.72 million yuan, a year-on-year decrease of 175.44%. Non-recurring net profit was a loss of 51.95 million yuan, a year-on-year decrease of 194.56%. The main reasons were a sharp decline in COVID-19 testing business and increased expenses caused by the decline of related operations.

It is still in the process of listing guidance, and its future direction remains a question.

To answer this question,First, an assessment of the POCT industry must be made.The POCT track is one of the fastest-growing sectors in in vitro diagnostics, and this should be uncontroversial. Especially with the emergence of molecular POCT, which has further improved in accuracy, the application of POCT has become more mature. As for what the future development might look like, it would be helpful to refer to the international market situation, primarily in Europe and the U.S. According to Statista data, from 2015 to 2022, the global POCT market size will grow from $21.5 billion to $40.5 billion, with an average annual compound growth rate of 9.47%. In China, the market increased from 4.3 billion yuan in 2015 to 17.3 billion yuan in 2021, with a compound annual growth rate of 26.11%, and it is expected to continue growing at a rate of over 20%, reaching 29 billion yuan by 2024. This comparison illustrates that the domestic market in China indeed...Initial Stage, High-Speed Development Stage。

In 2019, POCT accounted for only 16% of the in vitro diagnostics market in China, while in the global market, POCT's share of the in vitro diagnostics market had already reached 45%. In the United States, 70% of clinical tests are performed using POCT. When compared in this context, and excluding national conditions, medical habits, and treatment efficacy,The penetration rate in China is still at a relatively low level, and with China's large population base, the POCT market has broad space.The capacity unleashed by the increase in penetration rate was already witnessed during the epidemic, and there are new opportunities in the post-epidemic era. In addition to technological upgrades, the gradual establishment of a tiered medical system and primary care will also lead to a surge in demand for POCT.

For Xiamen Wiz Biotech Co.,LTD, besides enjoying the dividends from industry development and the COVID-19 pandemic, it is also actively upgrading and expanding.Established a distribution network covering 22 provinces in China, nearly 300 tertiary hospitals at the terminal;Internationally, there were 78 diagnostic reagent products in 2023 alone.Certified by the UK, Ecuador, Malaysia, Tanzania and other countries, with 174 certified products. Additionally, there are layouts in the Philippines and African markets, among others. Breaking through to broader markets; collaborating with Abbott (Shanghai), which acts as the agent for six products sold within China. Partnering with Meinian Onehealth Healthcare, the products have entered their procurement directory and can be selected for use in stores nationwide across China.Instrument revenue in 2023 reached 3.688 million, achieving an explosive growth of 1334.06%., is a successful embodiment of this strategy.

Backed by Abbott's collaboration, Wiz Biotech stands a level higher, distinct from ordinary IVD enterprises. Its potential is more readily recognized by the industry. Faced with intense competition in China's IVD market, the company decisively looked outward, positioning itself within the vast overseas market.

From the content disclosed, many certifications are concentrated in non-Euro-American-Japanese regions with strong standards. Combined with the reality of an overall gross profit margin of 27.44%, this aligns with Xiamen Wiz Biotech Co., LTD's current capabilities. Expanding sales channels and actively seeking financing, such as going public on the Beijing Stock Exchange, are ways to enhance hard power. This is likely the pursuit of many small and micro enterprises.

References:

1. Wiz Biotech Announcements and Related Information