Walnut Technology's Ren Wei: Addressing Bottlenecks in Drug Development and Unlocking Clinical Value Are the Core Missions of Digital-Intelligent CRO
CROs are hailed as accelerators of new drug development and indispensable partners in the process. They have experienced explosive growth driven by declining success rates, prolonged development cycles, rising R&D costs, and continuously diminishing returns on investment for global pharmaceutical companies. Although China’s CRO industry started later, it boasts substantial market potential and a growth rate outpacing the global average, having now become a core force in global new drug development.
The CRO industry has a very high professional threshold, yet it is now simplistically categorized as a “labor-intensive” service sector, viewed by some as dependent enterprises that merely “sell shovels” without regard for the outcomes of pharmaceutical R&D. According to Ren Wei, Founder and Chairman of Beijing Hutao Computer Technology Co., Ltd. (“Hutao Tech”), this perspective distorts the core values of CROs, causing a shift in focus for certain CRO operations. “Professional expertise remains the core competitiveness of CROs; their fundamental value lies not in securing specific projects or obtaining regulatory approvals, but in achieving ultimate clinical benefits for products (drugs).”
Hutao Technology pioneered the development of digital hospitals early on, facilitating medical data utilization through data governance and transforming previously fragmented, low-quality, and unusable data into hospital productivity. In this process, Hutao Technology identified substantial demand for research data and recognized both the value and obstacles associated with data in drug development. Leveraging its strong foundation in hospital partnerships and the promising outlook for pharmaceutical R&D outsourcing markets, Hutao Technology has transitioned from a smart hospital builder to a digital Contract Research Organization (CRO) service provider. By capitalizing on its team’s dual expertise in data management and pharmaceutical sciences, Hutao Technology enhances the quality, reduces costs, and improves efficiency in the translation of medical research achievements.
Scientific research and innovation can be described as the lifeblood of the industry. Ren Wei pointed out that the domestic clinical research environment is challenging, with researchers commonly facing three dilemmas: 1) Inaccurate identification of available in-house research resources, making project introduction difficult; 2) Lack of effective tools—hospital information systems are underutilized, serving merely as aids for diagnosis and treatment rather than providing access to desired research data; 3) Absence of supportive mechanisms—scientific research cannot be accomplished by a single department alone, as major studies often require multidisciplinary and multi-center collaboration, resulting in substantial communication costs and insufficient motivation among participating departments or centers.
“This leads to inefficient research output and insufficient capacity at hospitals, making it difficult for sponsors to collaborate with them,” said Ren Wei. To address these issues, Hutu Technology offers three solutions: first, helping hospitals organize their research and business development (BD) projects to identify precise research directions; second, providing digital system tools to enhance the quality, efficiency, and collaborative capabilities of research; and third, optimizing hospital process systems, formulating research execution plans, and ensuring project quality control.
Ren Wei emphasized that empowering researchers through technological means and focusing on clinical operations (site operations) is the company’s current business priority. This also means that Hutu Technology’s core competitiveness does not lie in a full-chain layout of CRO services, but rather in the execution of clinical trials built upon deep hospital collaborations, covering the entire process from trial design to implementation.
From providing researchers with digital tools to executing entire clinical studies, Hetao Technology aims to comprehensively integrate clinical medical resources and reshape the new drug development ecosystem, ultimately delivering two key forms of empowerment to hospitals: Commercial Empowerment—enhancing hospitals’ academic standing and research productivity, rather than passively accommodating sponsors’ demands during the drug development process; and Data Empowerment—leveraging digital tools to reengineer medical service workflows, thereby driving a transformation in hospitals’ development models.
Hutao Technology positions itself as a “research partner for hospitals,” with a focus on clinical operations at the hospital level. This strategy is rooted in Hutao Technology’s accumulated strengths over the years, leveraging its advantageous resources from partnerships with hundreds of hospitals. More importantly, bottlenecks in pharmaceutical R&D often occur within hospitals, such as when new drugs await clinical trials but struggle to find eligible clinical trial institutions.
Hutao Technology leverages digital solutions to establish hospital-side environments that comply with clinical research requirements. This approach not only supports hospitals’ independent research needs but also helps them identify pharmaceutical industry-sponsored research projects, thereby strengthening their Site Management Organization (SMO) capabilities and fully unleashing their scientific research potential.
“Emphasizing hospital-side operations does not mean we neglect our services to pharmaceutical companies; Walnut Tech is also a ‘commercial partner for pharma enterprises,’” said Ren Wei. He explained that the two “partner” positions are complementary, as CROs inherently serve as intermediaries bridging both hospitals and pharmaceutical companies. The tighter this connection, the easier it is to uncover valuable opportunities.
By forging strong ties between hospitals and pharmaceutical companies, the latter no longer operate in isolation. Hospitals leverage their clinical capabilities to help pharmaceutical companies identify more growth opportunities, creating a win-win situation for both parties. For Hetao Technology, acting as the adhesive in this relationship and the fulfiller of bilateral demands, it can generate sustained orders. “This deeply integrated model also provides Hetao Technology with opportunities to secure more projects from pharmaceutical companies, expanding from clinical trials into broader areas such as real-world studies and digital therapeutics, thereby delivering comprehensive solutions,” said Ren Wei.
In addition to its robust digital technology capabilities and extensive hospital resources, Hutao Technology has adopted a specialized strategy in entering the CRO sector. By focusing on specific therapeutic areas (TAs), it is building a TA-led clinical trial collaboration network.
It is reported that choosing specialized disease treatment as the entry point serves a dual purpose. On one hand, it aligns with the R&D pipeline characteristics of biopharmaceutical companies, as biotech firms typically focus on specific disease areas rather than pursuing a broad spectrum of indications. On the other hand, this strategy is driven by commercial considerations: by entering the service sector through technological R&D and anchoring its offerings to specific diseases, Walnut can more effectively leverage pharmaceutical companies’ resources. This approach also aims to establish early competitive barriers by achieving depth and specialization in a chosen field, thereby building a sustainable moat.
“We need to consider whether others will actually run their trials on the infrastructure we build and the pathways we lay out; therefore, setting entry thresholds is crucial. Moreover, with hundreds of active hospital users, it is impossible to convert them all into GCP-capable resources overnight. We must first streamline our focus by selecting advantageous specialties for in-depth collaboration,” introduced Ren Wei. Currently, Hutu Technology collaborates with numerous leading hospitals across China in the fields of liver and lung tumors. Leveraging data-driven SMO services, it achieves up to a 50% reduction in specific expense categories and an overall cost savings of more than 22% across modules including data management, platform system development, patient recruitment, and clinical coordination.
Focusing on the treatment of special diseases, Hutu Technology has rapidly captured market share by establishing clinical pathways and data labeling systems for liver and lung diseases, delivering significant value to sponsors. This process also strengthens its professional capabilities, driving Hutu Technology toward a design-driven, specialized CRO development path and building robust competitive barriers.
China’s CRO industry has experienced rapid growth over the past two decades, with a broad scope of services. Twenty years ago, CROs primarily served sponsors (pharmaceutical companies), addressing challenges encountered during the R&D process and effectively supplementing pharmaceutical companies’ capabilities. Today’s CROs perform many tasks that investigators are unable or too time-constrained to undertake, deeply engaging in the “R” (Research) aspect of CRO operations and directly contributing to new drug development. However, their excessive emphasis on “services” has become a constraint on their further growth.
Ren Wei pointed out that, due to limited clinical resources and investigators’ lack of time to engage in the entire clinical trial process, CROs are forced to take on additional responsibilities—such as data entry and patient enrollment—that should ideally be handled by investigators. These low-value, repetitive tasks not only make it difficult for the CRO industry to retain talent but also transform it from a profession driven by expertise into a labor-intensive industry, distorting its core values and shifting away from its fundamental value proposition. “Lacking essential professional capabilities most demanded by sponsors, such as endpoint planning and protocol execution, CROs are left with no choice but to engage in homogeneous, involutionary competition.”
Trapped in the current status quo, CROs not only struggle to accelerate drug development but may instead become a hindrance. This is a key reason why Walnut Technology is firmly committed to the path of digital transformation for CROs, leveraging data to unlock productivity and improve personnel efficiency, thereby allowing greater focus on refining professional capabilities. “Professionalism remains the core competitiveness of CROs, because our ultimate goal is not merely business development for specific projects or regulatory approval, but rather achieving the final clinical benefits of products (drugs),” emphasized Ren Wei. Looking ahead, Walnut Technology will continue to strengthen its professional medical expertise, building a CRO team that is grounded in clinical execution, professionally leading, and globally minded. The company will enhance design-driven approaches and serve as a true “partner” to hospitals and pharmaceutical companies.