Capital Empowering Innovation in China's Healthcare Industry
In recent years, with the development of socioeconomic levels and rising health demands, innovation in China’s healthcare industry has become a significant trend. However, healthcare is a highly complex systematic endeavor, and innovative achievements often require substantial long-term investment of capital and resources. Therefore, capital support plays a particularly crucial role in driving innovation and development within the healthcare sector.
So, how does capital choose its direction in the field of healthcare innovation? And what suggestions are offered for companies’ innovative development? On April 22, at the 2021 Taihu Bay Life and Health Future Conference, He Weiwei (moderator of the roundtable discussion), founder of ETP Zhihe Kangdao Investment; Yi Nuoqing, Co-Chief Investment Officer and Partner at Hillhouse Capital; Wang Hui, Founder and CEO of Honghui Capital; Huang Xiao, Executive Director at Yunfeng Fund; and Ye Xiaoping, Chairman of Tigermed, engaged in a roundtable discussion themed “Capital Empowering Healthcare Innovation,” offering insightful perspectives on how capital can drive innovation and development in the medical and health sectors.
Roundtable Discussion Scene (Image source: Tongxieyi)
What factors determine capital investment? Is it emerging trends, market sectors, or innovative technologies? In fact, every investor has their own perspective on this issue.
“Our sentiment is to invest in innovation,”Hillhouse has long adhered to a “dumbbell” theory, with one end focused on early-stage innovative enterprises and the other on the upgrading and innovation of traditional businesses..” said Yi Nuoqing. Hillhouse has always closely monitored innovative achievements across various sub-sectors of healthcare and life sciences, assisting companies in successfully establishing projects while welcoming the transformation of traditional pharmaceutical enterprises into representatives of innovation-driven businesses. Meanwhile, Hillhouse also provides a suite of solutions centered around enterprises, including digital transformation, internet-based transformation, and support for the commercialization of scientific research outcomes.
Yi Nuoqing, Co-Chief Investment Officer and Partner at Hillhouse (Image source: Tongxieyi)
Huang Xiao also expressed agreement with the view on investment-driven innovation, pointing out that,Yunfeng Capital’s Medical Investment Strategy: “Major Innovation” and “Major Platforms” as Key Focus Areas。
As an initiator of Alibaba Health, Yunfeng Capital participated in Alibaba Health’s strategic financing round in 2014. Since then, Alibaba Health has grown to serve over 200 million active users, firmly establishing itself as a major platform in the healthcare industry. For Yunfeng Capital, the “major platform” concept clearly extends beyond the online realm. “The merger of Meinian and iKang, two offline health checkup providers, generates several tens of millions of checkups annually, and this figure is projected to reach 100 million within a few years. This exemplifies our commitment to the ‘major platform’ philosophy,” stated Huang Xiao.
Huang Xiao, Executive Director of Yunfeng Capital (Image source: Tongxieyi)
For Wang Hui, who is both an entrepreneur and an investor,In its strategic positioning within the healthcare sector, Honghui emphasizes “two respects”: respect for growth and respect for young people.. In Wang Hui’s view, the power of growth is formidable. No matter how small a sapling may be, it will continue to grow as long as it absorbs sunlight and water, and the world is always in a state of forward progress. When he met Huang Xiao seven years ago, Huang had just entered the investment field; today, he is able to represent Yunfeng Capital in securing excellent deals in the healthcare industry. This exemplifies the power of growth and youth.
Respecting young people, listening to them, and serving them is the consistent principle followed by Honghui Capital., and therefore Honghui Capital also hopes to serve more emerging, young forces by actively participating in their growth journey.
Wang Hui, Founder and CEO of Honghui Capital (Image source: Tongxieyi)
Amid the wave of innovation in healthcare, an increasing number of entrepreneurs are entering the sector, accompanied by the continuous rollout of various policies and a constantly evolving market. For companies within the industry, advice from healthcare investors with extensive investment experience can significantly bolster their development. So, what specific recommendations do investors offer to healthcare enterprises?
Yinuoqing believes that,Enterprises need to concentrate more resources and attention on cutting-edge innovative fields, avoid excessive redundant development, and instead rely on top talent to engage in internationalization at an earlier stage.。
Secondly, regarding the two major events that have drawn significant attention from numerous companies in the industry—centralized volume-based procurement (VBP) and national medical insurance reimbursement negotiations—Hillhouse Capital has its own perspective. “Although VBP and insurance negotiations have driven down the prices of certain products, this is not necessarily detrimental to the development of the industry. Currently, there is substantial unmet demand in China, and innovative pharmaceuticals and medical devices still have significant opportunities to penetrate broader markets in third- and fourth-tier cities, and even fifth- and sixth-tier cities. With lower prices, drugs such as PD-1 inhibitors can benefit a larger segment of the general population. From a global market perspective, this also stands to benefit populations worldwide.”
Ye Xiaoping stated that, from an investment perspective on corporate development, the choice of strategic direction is largely similar.In the development phase, team capability remains the key factor.. Moreover, original innovation in China remains relatively insufficient; some companies recruit large sales teams before their products have withstood the test of the market. Therefore, in Ye Xiaoping’s view,Enterprises should focus more on the product itself in their early stages of development.。
Ye Xiaoping, Chairman of Tigermed (Image source: Tongxieyi)
Huang Xiao stated that the values of talent and organizational vision are particularly important,The later the stage of corporate development, the more a company needs to rely on human capital, team strength, and execution capabilities.。
“Taking Wuxi’s future development as an example, two key points warrant attention. First is differentiated development in strategic direction, seeking opportunities to leapfrog competitors in areas such as novel antibodies. Second is pursuing changes in payment innovation. Allocating several billion yuan from the annual public fiscal budget of approximately RMB 170 billion to support local payment for innovative drugs would not only constitute an innovative initiative but also align with public sentiment, without imposing an excessive burden on the government. Therefore, this represents a worthwhile direction for consideration.”
Wang Hui added in conclusion,An optimistic mindset is also an indispensable quality for enterprises.. For entrepreneurs, starting a business is a perilous journey with an uncertain outcome; the path is fraught with thorns, and only by maintaining an optimistic and positive mindset can one successfully navigate this course.