After the Funding Frenzy: Is the Tipping Point for Cancer Early Screening Finally Here?

The conclusion of the 618 shopping festival propelled New Horizon Health, buoyed by strong product sales, to a nearly 50% surge in market capitalization. However, in 2022, early cancer screening projects rarely secured financing.

“Sitting on business plans for at least ten early cancer screening projects, yet reluctant to invest.” Just over a year ago, this was a highly attractive sector; teams founded by technical luminaries were in such high demand that their equity was hard to come by, even if their products had not yet been fully commercialized. Capital’s enthusiasm for technology always outpaces the market, and the cooling of hype often occurs more rapidly than anticipated. For instance, late last year, Hotgen Biotech acquired more than 30% of Aorui Bio, which had successfully developed an early liver cancer screening product. VCBeat learned from informed sources that the exiting legacy shareholders aimed merely to recoup their principal. Similarly, earlier this month, Amoy Diagnostics divested its subsidiary engaged in early cancer screening, a move mockingly described by outsiders as “unable to carry the burden.”

The absence of true early cancer screening products, in the strictest sense, remains an inherent and unavoidable flaw in the industry’s foundational logic. The best-selling early cancer screening products on the market are, in essence, adjunctive diagnostic tools applied in early screening scenarios. Most of these products, based on technological platforms such as NGS and PCR, received regulatory approval two to three years ago, after which there has been a gap in new product launches. At a deeper level of application, the anticipated key technological breakthroughs have failed to materialize as expected.

However, the market for early cancer screening has not ceased to grow. Since the inaugural year of commercialization, domestic early cancer screening manufacturers have already reached a consensus on how to position themselves in both in-hospital and out-of-hospital markets. The transformation and strategic shifting from technology to products are no longer a blind rush; instead, companies can now focus on their core strengths. More importantly, the settling of debates over industry perceptions may well be becoming the spark that reignites enthusiasm in the early cancer screening market.

People habitually categorize early tumor screening into single-cancer and pan-cancer types. The commercial penetration of single-cancer early screening products has fallen short of expectations, while no pan-cancer early screening products have yet received approval. These two factors have created the appearance of slow progress in early tumor screening, contributing to a cooling of investment and financing in this high-profile sector.

Let’s first examine single-cancer early screening. This category, which was the earliest to achieve commercialization, has the most mature overseas market application, and has accumulated the largest amount of real-world population data, is now rapidly fading from the product pipelines of most tumor early screening manufacturers.

“Sales of our existing early cancer screening products have been somewhat sluggish, and the development of new products for other cancer types is still in its early stages.” The marketing head of a domestic early cancer screening company told VCBeat that his company had vigorously promoted a liquid biopsy product for early screening of a common gynecological cancer over the past two years, but progress fell short of expectations. “Hospital adoption has been limited; most hospitals still rely on traditional methods for early screening of this cancer type, while our approach is primarily used in clinical research. We are also exploring channels such as third-party clinical laboratories and online marketplaces, but these efforts are still ongoing.”

The Commercialization Path for Single-Cancer Early Screening Is Not EasyThe out-of-hospital market is immature, and under the brand first-mover advantages established by industry giants, most clustered single-cancer early screening products struggle to capture market share. Furthermore, within China’s healthcare landscape, clinical application is undoubtedly the starting point for the research, development, and promotion of any serious medical product; clinical settings also demand robust product quality and clearly defined clinical needs. Consequently, most tumor early screening companies choose hospitals as their initial entry point for commercialization. However, this choice has resulted in single-cancer early screening products becoming an awkward novelty that forcibly inserts itself into the traditional clinical diagnostic chain without delivering significant added value.

On the one hand, the hospital-based market is extremely difficult to penetrate.

First, the traditional combined sales strategies for in-hospital marketing of IVD products cannot bypass single-cancer early screening, although it presents even greater challenges. As an exploration of clinical applications for cutting-edge technologies, many NGS large-panel screening products and ctDNA detection products face numerous hurdles during the registration and approval process. While promoting regulatory innovation, these manufacturers often have to rely on Laboratory Developed Tests (LDTs) or agency models to achieve commercial implementation of cancer early screening products within hospitals. In such scenarios, cancer early screening products can only enter physicians' prescription lists by simply adopting other existing billing codes, resulting in low pricing per service. This makes it difficult for manufacturers, who have invested substantial capital and effort into developing high-tech cancer early screening solutions, to sustain their operations over the long term.

Secondly, even early cancer screening products that have obtained medical device registration certification typically need to undergo in-hospital re-testing before being admitted to the top three mainstream hospitals, which hold significant sway. At this stage, many products whose performance does not surpass traditional methods are directly eliminated. The market competition among different manufacturers thus becomes imminent from this point onward. “There are many detailed tasks to be completed for new products to enter hospitals,” another practitioner told VCBeat. At the hospital terminal, marketing teams of early cancer screening companies can only make breakthroughs one hospital at a time. This process requires extensive communication and coordination between manufacturers and distributors. “Furthermore, considering that new products are often priced relatively high, achieving substantial sales volume will be a difficult and slow process.”

Finally, at the current stage, single-cancer early screening products are primarily introduced into hospitals through distributor channels. However, not all relevant distributors are interested in promoting such clinically innovative products. “For distributors, the advantage of representing tumor early screening products lies in the novelty of the market, lower competitive pressure, and relatively greater room for growth, indicating significant future market potential,” said an industry practitioner. “However, the downside is that physicians need to be educated, which requires marketing investment and demands that manufacturers provide a strong academic environment, offer academic support, and assist them in delivering continuing medical education (CME) for clinical practice. It is mainly small- and medium-sized distributors who proactively seek to expand their business boundaries that choose to enter the tumor early screening product market at this time.”

Previous media reports have also highlighted that commercial promotion faces numerous challenges, a reality that has become widely acknowledged by end-market sales representatives for early cancer screening products. Consequently, manufacturers are compelled to compress product costs while leaving sufficient margin for distributors. “In terms of channel selection, it is crucial to carefully screen and partner with collaborators who share common values and long-term interests, and who firmly believe in the early screening market,” added this industry practitioner.

On the other hand, the hospital market is also very difficult to defend.

First, the current level of market awareness and education is insufficient to stimulate willingness to pay across a sufficiently broad market. In fact, although competition has intensified for a few high-profile cancer types, the majority of the in-hospital market for early cancer screening remains untapped. “The challenges facing the single-cancer early screening industry are not primarily about competition among companies, but rather stem from hospitals’ limited understanding of these products, unclear usage scenarios and target populations, ill-defined positioning within clinical pathways, insufficient evidence-based support, and uncertain patient benefits. Education and information dissemination at the cognitive level still need to be strengthened,” said an industry practitioner.

The resulting market structure has concentrated the clinical application of early cancer screening in tertiary hospitals and above. Although demand in lower-tier markets is substantial and technological accessibility is sufficient to cover areas with relatively underdeveloped medical infrastructure, the commercial value of this segment remains largely untapped. The underlying reason is that the population in lower-tier markets is relatively dispersed and has limited payment capacity. “For lower-tier markets, the cultivation of awareness for early cancer screening and the selection of appropriate technological pathways are still in the exploratory stage,” admitted the industry practitioner.

Secondly, early cancer screening products have not truly been integrated into the clinical pathways of physicians. Within hospitals, clinical departments are predominantly led by surgeons, among whom awareness of early cancer screening remains notably low within their knowledge frameworks. In most cases, these specialists fail to recommend early cancer screening products to patients who meet the age criteria and present with indications aligned with clinical guidelines. In this sense, early cancer screening has not genuinely penetrated the medical community.

“The product has not been included in clinical guidelines, and its price is relatively high. Another critical factor is insufficient academic promotion and limited awareness among clinicians,” said an industry practitioner. This implies that substantial investments in personnel, capital, and resources are required to expand the market during the commercialization of early cancer screening products. The founder of a domestic early cancer screening company told VCBeat that their single-cancer-type early screening product is rapidly expanding its presence within target hospitals. In addition to strengthening communication with distributors, the company is continuously expanding its in-house marketing team. “Our training for the early cancer screening marketing team is ongoing, which leads to a significant increase in costs.”

A clear takeaway from this series of interviews is the accelerated pace of R&D in pan-cancer early screening, with interviewees consistently highlighting their progress in this area. “Following the release of our latest research data last October, we launched China’s first multi-cancer screening product based on high-throughput whole-genome sequencing technology this year,” said Zhang Yue, Strategic Development Director at Genetron Health. Previously, Genetron Health had made extensive pioneering efforts in the productization and commercialization of its liver cancer early screening solution.

According to incomplete statistics from VCBeat, nearly 10 domestic cancer early screening companies have currently laid out pan-cancer pipelines. In addition to companies that have focused on pan-cancer pipelines from the outset, such as Genetron Health, Burning Rock Biotech, Tellgen Corporation, Siqin Medical, and Vision Medicine, companies that initially focused on single-cancer pipelines, including Huirui Gene, Kangyuan Bio, and Geneseeq, are also successively entering the field of pan-cancer early screening. The entry of these industry giants has greatly accelerated the maturation of pan-cancer early screening technologies. They continue to release retrospective study data to validate the potential of their under-development pan-cancer early screening models in detecting and tracing the origin of early-stage tumors.

Over the past two years, Burning Rock Biotech’s ELSA-seq technology, Genetron Health’s HIFI technology, PanSeer® by Kangyuan Bio, and Surexam Bio’s MERCURY technology have successively published retrospective pan-cancer early screening data derived from samples collected in clinical research collaborations, all demonstrating favorable sensitivity and specificity.

For instance, according to the R&D data on MERCURY multi-omics liquid biopsy for early cancer screening released by Genetron Health in early June, screening results from 1,214 samples covering patients with lung cancer, liver cancer, and colorectal cancer showed that, at a specificity of 95.0%, the overall sensitivity for detecting all cancers reached 95.5%. The sensitivities for detecting primary liver cancer, colorectal cancer, and lung adenocarcinoma were 100%, 94.6%, and 90.4%, respectively. Earlier published data indicated that Burning Rock Biotech’s ELSA-seq achieved a specificity of over 98% and demonstrated tissue-of-origin identification accuracy as high as 82%; HIFI technology from HealGenomics achieved an overall detection sensitivity of 87.6% and specificity of 99.1%, with an overall tissue-of-origin identification accuracy of 82%; while PanSeer® from Singlera Genomics achieved sensitivity and specificity of 95% and 96%, respectively, in retrospective samples for five common malignancies: lung cancer, gastric cancer, esophageal cancer, liver cancer, and rectal cancer.

However, the impressive performance demonstrated in retrospective studies may merely mark the beginning of intense competition in the red ocean of pan-cancer early screening. For tumor early screening products, completing retrospective studies only constitutes the first half of the R&D journey; subsequent prospective studies, commercial implementation, and market promotion remain entirely new challenges.

At this stage, there are no significant differences among the more advanced pan-cancer pipelines under development. Data released on pan-cancer early screening pipelines show considerable overlap across companies in terms of technology platforms, biomarkers, and selection of major cancer types.

In terms of technical platforms, whole-genome sequencing or deep sequencing of multiple loci based on next-generation sequencing (NGS) is widely used, with differences lying only in library preparation techniques, probe design strategies, and other aspects. At the biomarker level, most tumor early screening models primarily focus on circulating tumor DNA (ctDNA) and cell-free DNA (cfDNA), with differentiation reflected in the types of variations captured. For instance, Geneseeq’s MERCURY early screening model selects five fragment features, including cfDNA fragment size distribution and fragment size ratios; PanSeer® by Burning Rock Biotech captures cfDNA methylation levels; and Huirui Gene focuses on ctDNA end sequences, nucleosome footprints, fragment size distribution, and copy number variations. Regarding cancer type coverage, most pan-cancer early screening products under development target high-incidence cancers such as lung cancer, liver cancer, gastric cancer, and esophageal cancer, with minimal differences among them.

Meanwhile, prospective studies—a critical step prior to the commercialization of pan-cancer early screening—have yielded few positive developments. To date, the only large-cohort prospective studies on pan-cancer early screening that have been clearly launched are PREDICT and PRESCIENT by Burning Rock Biotech. This situation stems from the lack of precedents for designing large-cohort prospective trials in this field, coupled with the need for sustained operational, R&D, and product investments throughout the trial process. For companies holding homogeneous pan-cancer early screening technologies, this poses a significant challenge, making them hesitant to commit fully; yet, such commitment remains key to breaking through the current impasse.

So, can pan-cancer early screening technology, which has been put on the fast-forward button, turn the tide and become the turning point in the tumor early screening market? The answer may be yes.

First, in fact, at the market level, the underlying logic of pan-cancer early screening is clearer than that of single-cancer early screening. Thus, once it enters the commercialization stage, it can to some extent avoid the predicament faced by single-cancer products, which have to educate the market and struggle for survival within the cracks of traditional business models. “If tumor early screening is further broken down, it can be divided into multiple stages such as general screening, precise screening, and auxiliary diagnosis, each with different application scenarios,” a senior executive from Tellgen Corporation, a pan-cancer early screening company, explained to VCBeat. “User perceptions and needs vary across different scenarios, requiring us to address them one by one.” Over the past three years, Tellgen Corporation has conducted early pan-cancer screening using metabolomics technology, completing screenings for more than 100,000 users. These screenings were primarily carried out through local public welfare projects. While achieving scale to reduce costs, the company also leveraged continuously accumulated real-world data to iterate its pan-cancer early screening products. “The performance metrics are constantly improving,” the executive pointed out.

Secondly, the widespread adoption of pan-cancer early screening products in the future can, to a certain extent, establish a new and rational foundation for the in-hospital promotion of single-cancer early screening products. “Pan-cancer early screening currently serves as the initial entry point of the screening funnel,” noted another industry practitioner. For specific populations who have reached a certain age and possess high-risk factors, pan-cancer early screening is needed to further identify which organs may be at risk of cancer during a specific stage or in the near future. This allows for focused screening on individual cancers, thereby achieving effective cancer prevention and control. “What is urgently needed now are technologies and products that help us narrow down and focus on high-risk populations and those with very early-stage cancer. This enables single-cancer products to deliver maximum value within this more precisely defined population. Such a cancer prevention and control strategy, combined with this product portfolio, will be more efficient,” stated Zhang Yue.

Finally, let us examine feasibility and accessibility. As previously mentioned, mainstream domestic early cancer screening companies have actively deployed multi-cancer early detection (MCED) solutions and conducted preliminary validation of their proprietary models using retrospective samples. This indicates that MCED is technically feasible. In terms of accessibility, Moore’s Law continues to drive advancements in gene sequencing; with declining costs and the accumulation of related data, the application of this new technology in MCED will no longer be constrained by high costs.

Of course, the market is subject to uncertainties, and technologies and products have their own maturation cycles. Nevertheless, we look forward to the rapid market entry of pan-cancer screening products. This anticipation stems not only from the potential for such products to serve as a turning point in the early cancer screening industry, but more importantly, from the fact that their maturity means most people can be spared much of the suffering caused by cancer.