ALSOLIFE Files for IPO: Pioneering Digital Therapeutics for Autism in China

2021 Marks the Inaugural Year of Digital Therapeutics in China. Validated by evidence-based medicine, digital therapeutic products are built on application or artificial intelligence platforms and can be integrated with wearable devices or medical devices to prevent, manage, or treat various conditions, including mental, psychological, and cognitive disorders. According to data from VCBeat Orange, there were over 70 global financing events in the digital therapeutics sector in the first half of 2021, with total funding exceeding $2.6 billion, indicating a highly vibrant market.

2021 marked the inaugural year of China’s 14th Five-Year Plan. The major national project on “Brain Science and Brain-Inspired Intelligence” officially opened for public consultation, signaling its imminent entry into a phase of substantive policy support. Thus, the curtain has finally risen on China’s Brain Project.

China’s Brain Project comprises a “core” of fundamental brain science research, supported by “two wings”: one wing focuses on brain-inspired artificial intelligence research, while the other aims to address brain health issues by developing new therapies for currently incurable neurological and psychiatric disorders such as Alzheimer’s disease, Parkinson’s disease, depression, and autism spectrum disorder.

What sparks will fly when digital therapeutics align with the Brain Initiative? How will this reshape the industry landscape? Recently, Zhang Zhiguang, Founder and CEO of ALSOLIFE, a digital healthcare provider specializing in pediatric mental disorders, engaged in an in-depth dialogue with Jiang Tianjiao, Dean of VCBeat Institute, who has extensive expertise in digital health. Using digital therapeutics for autism rehabilitation as a case study, they jointly explored industrial development trends and opportunities under the new landscape.

Zhang Zhiguang (left), Founder of ALSOLIFE, and Jiang Tianjiao, Dean of VCBeat

Jiang Tianjiao: As the founder of ALSOLIFE, you have a profound understanding and insight into the autism industry. What are the pain points in traditional autism interventions that need to be addressed?

Zhang Zhiguang: Currently, there are three pain points in autism rehabilitation that need to be addressed.

First, in terms of demand, autism spectrum disorder (ASD) was consistently considered a "low-prevalence" mental disorder in the last century. However, since 2000, data from the U.S. Centers for Disease Control and Prevention (CDC) have shown a continuous, stable, and significant upward trend in the prevalence of ASD. The rate has risen steadily from 1 in 150 in 2000 to 1 in 54 in 2016, indicating that approximately 1.8 million children in the United States alone are affected by ASD.

This rise is directly correlated with socioeconomic advancement and heightened public awareness and sensitivity toward autism. A 2020 scientific publication indicated that the prevalence of autism in China has increased from 1.5 per 10,000 in the 1990s to approximately 1% currently, meaning that around 2.4 million Chinese children are affected by autism. This figure and its rapid rate of increase far exceed the current capacity of China’s rehabilitation workforce.

Therefore, the primary pain point that needs to be addressed is the scarcity of resources. A comparison with U.S. data reveals a stark disparity: in terms of diagnosis, there are at least 5,000 child psychiatrists and developmental-behavioral pediatricians qualified to diagnose autism spectrum disorder (ASD) in the United States, whereas in China, despite having a larger population of children with ASD, the number of such specialists does not exceed 500. In terms of rehabilitation, the United States has approximately 50,000 professionals capable of providing intermediate to advanced rehabilitation services (such as Board Certified Behavior Analysts [BCBAs] and Board Certified Assistant Behavior Analysts [BCaBAs]), while in China, this figure is projected to reach only around 600 by the end of this year. This severe talent shortage is attributable not only to the late start of China’s autism industry but also to the prolonged training period and high entry barriers for professionals in this field, which have further exacerbated the imbalance between supply and demand.

The second critical challenge to address is the difficulty in quantifying and digitizing industry metrics, which has led to slow progress in scientific research. Autism spectrum disorder (ASD) cannot be diagnosed or its severity assessed through any single biological marker, such as genetic, blood, or urine tests. Furthermore, there are no medications available to treat or even alleviate the core symptoms of autism. When clinical indicators cannot be quantified or digitized, physicians and rehabilitation therapists must rely solely on their clinical experience for observation and practice, making it difficult to accurately evaluate rehabilitation outcomes. This exacerbates the already severe shortage of resources.

On the other hand, there are certain differences in early developmental patterns across different countries and even ethnic groups. However, we lack diagnostic and assessment tools specifically designed for Chinese children with autism spectrum disorder (ASD), a deficiency that is fundamentally attributable to the insufficient number of high-caliber research institutions in China dedicated to ASD research.

The third pain point that needs to be addressed is the persistently high cost of rehabilitation. As previously mentioned, autism spectrum disorder (ASD) cannot be diagnosed based on biological markers, nor can it be treated through pharmacological interventions. So, what are the traditional intervention approaches? Currently, we employ the gold standard for ASD intervention: Applied Behavior Analysis (ABA). Autism therapists utilize the scientific principles of ABA to establish connections with children, systematically organizing and restructuring developmental milestone goals. This systematic approach helps children build interactions with the external world, thereby improving their core deficits—namely, social communication and behavioral challenges. Although ASD cannot be cured, this intervention can enhance the functional performance of children with autism and improve the quality of life for their families.

However, autism rehabilitation is not a quick fix. The most common approach in traditional interventions—early intensive behavioral intervention—typically requires 25 to 40 hours per week, entailing remarkably high labor costs. Data from 2014 shows that the United States spent between $61 billion and $66 billion on autism care for young children. The low efficiency and high cost of manual intervention constitute the third major pain point in autism rehabilitation.

Jiang Tianjiao: Pain points in the diagnosis and intervention of autism have remained unresolved for years. In your view, how can digital therapeutics, as an innovative solution in China, break through the current market status quo? Is now the right time?

Zhang Zhiguang:Digital Therapeutics Are Timely. As the demand for autism rehabilitation has risen, supply has failed to keep pace, making it extremely difficult to find suitable and adequately staffed intervention centers and therapists. Unlike in the United States, where insurance coverage and public school districts play significant roles, the costs of care for individuals with autism in China are largely borne by families. Consequently, even when rehabilitation options are available, their prohibitive costs are often beyond the reach of ordinary parents. To break this impasse, ALSOLIFE believes that digital therapeutics can offer innovative solutions, and now is the ideal time to act.

ALSOLIFE currently operates seven offline autism intervention centers across China. I have a personal habit of regularly contacting parents who have withdrawn their children from our programs to understand their reasons for leaving. In many cases, the feedback from parents is: “We’ve run out of money.” This means that while their willingness to pay remains, their ability to pay no longer exists.

Last year, ALSOLIFE, together with the China Association of Rehabilitation of Disabled Persons and the Institute of Population Research at Peking University, jointly launched a survey covering 8,103 families across China. The average monthly expenditure on intervention per family has reached RMB 6,950. Additionally, 56% of these families have one member who does not work outside the home but instead provides full-time care for their child with autism, further exacerbating financial strain and leading many households into deficit.

Therefore, we have consistently aimed to use digital therapeutics to replace manual labor to the greatest extent possible. Tasks requiring extensive repetitive practice during intervention are handled by digital tools to help children achieve optimal therapeutic outcomes. Additionally, we have considered how to fully leverage the advantages of digitalization to demonstrate areas where digital tools outperform human practitioners. For instance, when children with autism see a card depicting a jumping figure, they may struggle to associate it with the action of “jumping.” However, digital tools can easily demonstrate this concept to children using consistent animated GIFs of “jumping,” thereby facilitating cognitive understanding of the concept.

Jiang Tianjiao: Mr. Zhang has consistently emphasized that our solution can replace manual labor, offering lower costs, and even higher efficiency and better outcomes. In comparison to traditional interventions, how does digital therapeutics for autism ensure patient adherence and rehabilitation efficacy?

Zhang Zhiguang: In recent years, digital therapeutics have been gradually proven by the academic community to effectively improve learning, cognitive, and social skills in children with various cognitive impairments. The literature highlights several advantages of existing digital therapeutics. First, as previously mentioned, the predictability and consistency of digital tools can make children’s learning more efficient. Meanwhile, compared with the high demand for intensive manual intervention, digital therapeutics are more affordable per unit, significantly alleviating the financial burden on families.

Meanwhile, studies have also shown that digital therapy models can be designed to be engaging and dynamic, customized according to users’ individual characteristics to provide “real-time” and “online” feedback. Research has found that game-based digital therapies can capture students’ interest and attention, help them build confidence through gameplay, improve their social problem-solving skills, and enhance academic skills such as mathematics. These studies demonstrate the potential and effectiveness of digital interventions in improving the core symptoms of autism.

What ALSOLIFE aims to achieve is to systematically migrate the established scientific knowledge of autism rehabilitation from offline settings to online platforms, employing rigorous evidence-based medicine methodologies, while simultaneously demonstrating its continued efficacy.

Throughout this R&D process, we have always maintained a deep reverence for digital therapeutics. ALSOLIFE is not aiming to produce a product for quick profit; instead, we prioritize ensuring that every aspect of the product’s design aligns with foundational medical and psychological mechanisms, ultimately forming a closed-loop theoretical framework. Furthermore, we meticulously design clinical trials to obtain valid clinical data, thereby empirically validating the product’s efficacy from an evidence-based perspective. Thirdly, it is crucial to recognize that although termed “digital medicine,” it is not actual “medicine.” Traditional medication incurs no usage cost beyond adherence to a prescribed schedule—patients simply take it at the designated time. In contrast, digital medicine entails significant usage costs. It requires patients to engage in various forms of therapeutic interaction and sustain this engagement over a period of time before therapeutic effects can be realized.

Therefore, patient compliance has become critically important. This is particularly true for the population of children with autism spectrum disorder (ASD), where attention and cooperation often present the greatest challenges to rehabilitation. In offline clinical settings, ALSOLIFE collects comprehensive data throughout the intervention process for children with ASD, documenting their emotional states and levels of attention. We have observed a noteworthy phenomenon: when the overall pass rate for intervention goals exceeds 80%, children tend to become bored and may engage in task avoidance; conversely, when the pass rate falls below 65%, children often exhibit negative emotional responses, including apprehension toward difficult tasks. Leveraging extensive empirical data from offline interventions, we have translated these insights into algorithmic foundations for our online system, enabling the precise customization of intervention programs to optimize each child’s compliance.

Achieving strong adherence also requires a deep understanding of the industry and the profession. Product managers often make the mistake of designing products from the perspective of neurotypical children. To develop an effective product, it is essential to align with the cognitive patterns of children with autism, thinking and solving problems from their perspective.

Jiang Tianjiao: Mr. Zhang just mentioned using data from offline institutions as the algorithmic basis for online services. From a management perspective, traditionally establishing chain rehabilitation institutions has been highly labor-intensive. So, what will the development model of digital therapeutics for autism look like in the future? If it is purely online digital therapeutics, can it truly replace human labor? And if it combines online and offline approaches, what are the advantages of this model?

Zhang Zhiguang: As I briefly mentioned earlier, ALSOLIFE’s digital therapy is delivered in a game-based format. First, grounded in child development theory, play serves as a crucial cognitive channel for children. Through play, interactions and communication between adults and children are facilitated, fostering positive relationships and thereby enhancing children’s language, social, and cognitive abilities. Second, the game-based format is more effective than rigid, manual interventions at capturing children’s interest and attention, thus boosting their motivation.

While I have highlighted the various advantages of digital therapeutics, it is crucial to emphasize that their primary objective is not to replace human therapists but to complement them, thereby achieving more efficient and optimal rehabilitation outcomes. For families unable to access institutional care for manual interventions, particularly in complex home environments where caregivers often struggle to provide effective guidance, digital therapeutics offer a viable solution in terms of both time and space. This allows parents some respite while ensuring that children receive timely and effective intervention. By providing an alternative option that reduces the reliance on manual labor to a certain extent, digital therapeutics align more closely with the principles of pharmacoeconomics.

Jiang Tianjiao: In fact, digital therapeutics can be understood as a powerful complement to traditional institutions. Another point is that our underlying assessment scales and intervention frameworks and methodologies may share certain similarities. Mental health disorders often exhibit a degree of extensibility, including conditions such as ADHD and depression. Our future growth potential is likely to stem from this area.

From the supply side, it is worth considering whether a suite of ancillary services can be developed for users or whether the offerings can be extended. Future strategic directions may also need to evaluate whether to partner with service-oriented institutions or research-oriented institutions.

Zhang Zhiguang: This is an excellent question. In fact, there is no need to view digital therapeutics in isolation as a specific product. From a broader perspective, it enables the digitalization of specialized vertical disease areas, spanning from screening and diagnosis to rehabilitation and disease management. Essentially, it serves as a platform that fully integrates every offline component, including research-oriented hospitals and service-oriented institutions.

For ALSOLIFE, our goal is not limited to developing this single product; rather, we aim to establish a comprehensive healthcare ecosystem that provides a holistic rehabilitation system for families affected by autism. Meanwhile, we must critically and rigorously evaluate the services and products we offer.

In contrast, within China’s autism sector, leading companies lack a critical capability: the ability to “prove that what they are doing is right.” The industry often fails to demonstrate the scientific validity of interventions through rigorous clinical medical practice, instead relying heavily on direct citations of foreign research findings.

However, due to differences in culture and living environments, there are certain variations in early developmental patterns, social expectations, and social norms across different countries and even ethnic groups. I believe that the development of digital therapeutics in China will, on one hand, help advance domestic autism research by developing effective intervention methods better suited for Chinese children; on the other hand, it will improve the industry’s labor-intensive and inefficient structural landscape, providing parents with more options.

The Future Roars In: “This Is a War of Time”

Jiang Tianjiao: But how can we achieve rapid market penetration and advancement in this matter? Moreover, several core issues of digital therapeutics themselves include who the payer is, and whether the payer can exist in a long-term and scalable manner?

Zhang Zhiguang：I have previously cited data from the United States, and here I would like to provide a brief comparison between China and the U.S. There are fundamental differences in the business models for manual intervention in autism between the two countries. In the U.S., health insurance and public school services basically cover most of the costs of manual intervention, making it essentially a G2C (Government-to-Consumer) business model. In China, rehabilitation subsidies only cover a portion of the population, and the subsidy amounts are limited; in most cases, families bear the primary cost of intervention, making it essentially a B2C (Business-to-Consumer) model. The persistently high cost of intervention is actually a bottleneck in the development of manual autism intervention in China: while there is willingness to pay, affordability remains insufficient.

These crises have instead created a turning point for digital therapeutics in autism, enabling parents to reduce intervention costs through more affordable means. Given the incurable nature of autism, once stable adherence is established, digital therapeutics in this field tend to have longer durations of use and stronger user stickiness. Meanwhile, we plan to gradually build innovative systems and business operations related to digital diagnosis and treatment, ensuring the sustainable and stable development of digital therapeutics and better addressing users’ current and future needs.

ALSOLIFE currently hosts the largest online community for autism in China. Over the four and a half years since its establishment, we have served nearly 260,000 Chinese families affected by autism. Once significant clinical efficacy is demonstrated, we will be the first to implement and deploy digital therapeutics within the ALSOLIFE community, addressing the urgent needs of these families.

Jiang Tianjiao: How do you approach differentiation in product and business strategies? In healthcare, emphasis is placed on efficacy and outcomes; however, verifying the efficacy and long-term outcomes of autism interventions requires considerable time. Rehabilitation costs are substantial, and many parents may lack strong discernment capabilities. Consequently, some ineffective therapeutic approaches may still remain mainstream practices in the rehabilitation market.

Phenomena such as competing for visibility and marketing intensity, which are prevalent in the consumer healthcare sector, are highly likely to emerge in the field of autism rehabilitation. Moreover, counterarguments may arise: while we devote our efforts to developing digital therapeutics products, others may focus their resources on marketing. Therefore, a very realistic question I am considering is whether our values will encounter setbacks.

Zhang Zhiguang:In fact, we often cite the development of astronomy in the Middle Ages as an example. Before a sufficient chain of evidence was established and a complete scientific system was built, various fields were prone to fall into a state of “dispute,” much like the current landscape of autism research and care in China. Everyone is competing for volume, as if louder voices equated to authority and professionalism.

However, I believe that medicine ultimately hinges on data, research, and rigorous clinical trial results. Although this process may not yield rapid outcomes in the initial stages, adhering to the path of scientific evidence-based efficacy and persisting in doing difficult yet right things for a period will ultimately lead the industry toward new trends.

Due to the unique nature of autism spectrum disorder, the autism rehabilitation sector is inevitably evolving into an industry characterized by high professional barriers yet promising prospects for technological breakthroughs. As a participant in this field, ALSOLIFE bears the responsibility to actively build foundational industry infrastructure and enhance overall professionalism. Digital therapeutics not only represent a new product direction for us but also, to some extent, embody the corporate values of ALSOLIFE.

Jiang Tianjiao: Your insights are very clear. Finally, I’d like to ask a broader question: How does Mr. Zhang view the future development trends of digital therapeutics for autism?

Zhang Zhiguang:As the father of an eight-year-old child with autism, I firmly endorse the development of digital therapeutics in China.

In fact, as early as 2018, ALSOLIFE began exploring the use of games as a medium to address the various challenges associated with manual rehabilitation for autism. However, we struggled to define the nature and positioning of this new intervention model until the emergence of AKILI’s EndeavorRx, which promptly resolved our uncertainties.

Globally, autism intervention represents a significant financial burden in every country, whether covered by health insurance or borne by parents, ultimately becoming a substantial societal cost. The limitations of traditional manual interventions, the difficulty in quantifying data metrics, and the challenges in improving interaction and communication efficiency between children with autism and the external world have made the development of digital therapeutics imperative.

Early intervention for children with autism is urgent. It is a race against time; the sooner we implement digital therapeutics, the more families will benefit. Admittedly, the initial investment in digital therapeutics is substantial. However, it is precisely this investment that enables us to harness vast amounts of data and high-frequency data acquisition capabilities, allowing us to develop China’s own rehabilitation tools and achieve greater, evidence-based therapeutic outcomes at a lower cost.

I firmly believe that, just as with the development of application-level internet services, China will ultimately lead the world in digital therapeutics.

Jiang Tianjiao: Thank you, Mr. Zhang! The exploration of digital therapeutics in the field of autism is what we consider a “difficult yet right” endeavor. Its “difficulty” is precisely where its value lies, while being “right” allows us to align with trends and achieve success. We look forward to ALSOLIFE moving faster, farther, and more steadily in this sector.

Disclaimer: All data and related statements involved in this conversation have been verified by authoritative literature.