Behind the Scenes of Nuohui Health's Q4 Surge: Strategic Collaboration with AstraZeneca and Product Portfolio Insights

March 15, 2021, appeared to be an auspicious day for New Horizon Health.

That afternoon, New Horizon Health and AstraZeneca signed two agreements: a promotion agreement for Cologuard® (Changweiqing®) and a memorandum of strategic cooperation. Later that evening, New Horizon Health updated its 2020 performance announcement. This marked the company’s first performance announcement since its listing, despite less than a month having passed since its IPO.

If everything had progressed smoothly, as we previously anticipated in our articles, there would be no need to revisit New Horizon Health’s financial performance and strategic layout here. However, the data in this earnings announcement was “reasonable yet unexpected,” a situation closely tied to the collaboration between New Horizon Health and AstraZeneca.

We previously discussed New Horizon Health’s performance in the first three quarters of 2020 at the time of its IPO. The latest earnings announcement released by New Horizon Health, compared with the post-hearing information package, essentially only updates the data for the fourth quarter of 2020. Based on our conservative estimate at that time, New Horizon Health’s revenue rebounded rapidly in the third quarter after the pandemic. Even if the fourth quarter had maintained and further intensified this strong momentum from the third quarter, the year-over-year growth compared to 2019 would have been only marginal.

However, the reality is that New Horizon Health’s revenue in 2020 increased substantially compared with 2019.

Selected Financial Data from New Horizon Health's 2020 Performance Announcement

In 2020, New Horizon Health recorded a total revenue of RMB 70.567 million, representing a 21.1% increase from RMB 58.275 million in 2019.It was not until September 2019 that New Horizon Health’s revenue reached only RMB 35.309 million, even lagging behind the RMB 35.440 million recorded in the first three quarters of 2019. This means that in the fourth quarter of 2020, New Horizon Health reported revenue of RMB 35.258 million, representing a year-on-year increase of more than 50% compared with the fourth quarter of 2019 and a quarter-on-quarter increase of more than 40% compared with the third quarter of 2020.

Logically, we would naturally attribute the substantial growth in fourth-quarter performance to the approval and market launch of Changweiqing during that period. However, this is not the case in reality.The key driver behind the substantial revenue growth of New Horizon Health in 2020 was not Changweiqing, which had just received market approval, but rather the low-profile Popo Tube.

Statistical Data on Partial Revenue of New Horizon Health

When we compare the data from various periods in 2019 with that of 2020, the actual situation becomes clear at a glance.

As can be seen, during the periods of January–June and January–September, New Horizon Health’s revenue structure in 2019 and 2020 remained largely consistent, with ColoClear as the primary contributor and PP Tube as a secondary one, while other products generated relatively low revenue. The company’s total revenue was also broadly similar across these two periods.

However, when considering the full-year data, the revenue generated by Changweiqing was nearly flat compared to 2019. Taking into account the time lag between shipment and revenue recognition, as well as the impact of the pandemic on Changweiqing’s shipment volume in the first half of the year, sales of Changweiqing in 2020 should be considered flat from a revenue perspective. Other products, excluding Changweiqing and Pupu Guan, experienced a significant decline; however, due to their relatively low sales volume, the impact on New Horizon Health’s overall revenue was minimal.The growth of the Popo Tube was particularly significant, with sales in 2020 more than doubling compared to 2019. Furthermore, Q4 sales of the Popo Tube in 2020 exceeded RMB 20 million, accounting for over 65% of the full-year sales volume.

Over the past few months, attention toward New Horizon Health has focused primarily on Changweiqing, which has obtained regulatory approval. Beyond Changweiqing, the second most-watched product is Youyouguan, for which a registration application was recently submitted. In contrast, Pupuguan, a product that has held a Class II medical device registration certificate for many years, has attracted relatively little attention. Yet by the end of 2020, it was this seemingly unremarkable product that emerged as the “big boss.”

The unexpected rise of the “Pupu Tube” to prominence caught many by surprise. Therefore, starting from the market approval of Changweiqing, we attempt to use logical deduction to reconstruct what exactly happened during the fourth quarter, when sales of the Pupu Tube surged.

Let’s rewind to November 2020. On November 9, 2020, New Horizon Health’s colorectal cancer early screening product, “ColoClear,” officially received the Class III Innovative Medical Device Registration Certificate issued by the National Medical Products Administration (NMPA), marking the first such certification in the field of genetic testing-based cancer early screening. In conjunction with this milestone, New Horizon Health held a press conference titled “China’s First Certificate for Cancer Early Screening” and launched extensive promotional and marketing campaigns.

Intensive marketing and promotional campaigns have increased public awareness of Changweiqing and highlighted the importance of early screening for colorectal cancer. However, Changweiqing is priced at RMB 1,996 per kit, and even during New Horizon Health’s IPO special promotions, the price per kit remained as high as RMB 1,333. While this represents a reasonable market price, it may still deter first-time users of early-screening products.

When users recognize the importance of early screening for colorectal cancer but remain hesitant due to the price of Changweiqing, the Pupu Tube becomes the optimal choice.

What is the PuPu Tube? The PuPu Tube is a proprietary, non-invasive fecal immunochemical test (FIT) product for colorectal cancer screening, designed to detect hemoglobin biomarkers associated with colorectal cancer. To put it simply, Colotect uses a FIT-DNA testing method, providing dual assurance through mutual verification; whereas the PuPu Tube relies solely on FIT (fecal occult blood testing). Although its detection depth is not as comprehensive as that of Colotect, it still offers relatively high accuracy and is more affordable, costing less than 100 yuan per test.

To put it more directly, the Pupu Tube can be regarded as a lower-tier alternative to ChangWeiqing.

Based on this logic, let us re-examine the events of the fourth quarter of last year.

1. Changweiqing's approval for market launch has triggered extensive promotional campaigns, raising market awareness of early screening;

2. The user has a need for early colorectal cancer screening but is hesitant due to the price of Changweiqing;

3. A large number of users have opted for the relatively affordable fecal occult blood test kit as their initial foray into early screening (although, strictly speaking, such kits are not classified as early-screening products).

Therefore, returning to the root of the issue,The surge in sales of the Popo Tube actually reflects the heightened awareness of early screening among the broader user base following the approval of the first early-screening certification.This heightened awareness of early screening, particularly for colorectal cancer, will further drive revenue growth for New Horizon Health’s two flagship products in the future.

So the question arises: how can we alleviate users’ concerns and ensure that their initial awareness in the field of early screening goes beyond just the “Poop Tube” and takes a further step toward adopting “Changweiqing”?

This is the crux of the collaboration between New Horizon Health and AstraZeneca.

On the afternoon of the same day that New Horizon Health released its performance announcement, New Horizon Health and AstraZeneca signed a strategic cooperation memorandum and a promotion agreement for Changweiqing®, launching an in-depth strategic partnership in the Chinese mainland market.

Traditionally, there has been a certain degree of mutual exclusivity between pharmaceutical companies and early-screening enterprises. Theoretically, if early screening were to be universally adopted, the number of patients requiring medication would decrease, leading to a corresponding decline in pharmaceutical companies’ revenues. However, as is widely known, AstraZeneca can no longer be defined simply as a “pharmaceutical company.”

Regarding the section on collaboration, we will first cite the official content here.

AstraZeneca China and New Horizon Health Strategic Cooperation Signing Ceremony

Regarding the Colotect® Promotion Agreement:Both parties will jointly promote Colotect® (a combined test kit for KRAS gene mutations, BMP3/NDRG4 gene methylation, and fecal occult blood) in public hospitals, pharmacies, and internet hospitals across mainland China. They will deeply integrate their respective advantageous resources to enhance market coverage and channel expansion for Colotect®, fully leveraging AstraZeneca’s strong commercial promotion capabilities, comprehensive market network, professional team, and leading expertise in the field of gastroenterology. This collaboration aims to accelerate the market penetration of Colotect® in mainland China and promote its application and adoption among populations at high risk for colorectal cancer. By advancing early diagnosis and treatment of colorectal cancer, the partnership seeks to provide an integrated solution encompassing prevention, diagnosis, treatment, and rehabilitation for individuals at high risk of gastrointestinal diseases.

This promotional cooperation agreement for Colotect® is valid for a three-year term. During this period, Colotect® will be the sole colorectal cancer genetic testing reagent partnered with AstraZeneca in the mainland China market.

Regarding the Memorandum of Strategic Cooperation:In the field of early cancer screening, both parties will expand their commercial collaboration on Changweiqing® in China and other international markets, building upon their existing commercial partnership, to jointly increase the early screening rate for colorectal cancer. In the oncology sector, they will explore how to leverage their respective strengths and integrate R&D platforms to conduct further exploration and research in early screening, continuously innovating new models of cooperation. Meanwhile, New Horizon Health will upgrade its sales, marketing, and training systems, while AstraZeneca, in collaboration with “AstraZeneca University,” will support New Horizon Health in continuously improving operational efficiency and enhancing its training framework.

Based on the information provided in the official news, we first raise two of the most obvious key points:

1. New Horizon Health did not divest the rights to its products; rather, it deeply integrated the complementary strengths of both parties to jointly market and sell them.This bears a striking resemblance to the prior collaboration between Junshi Biosciences and AstraZeneca.

2. The cooperation term lasts for up to three years and is exclusive.The news specifically highlighted that “during the cooperation period, Colotect® will become AstraZeneca’s sole molecular diagnostic test for colorectal cancer in the mainland China market.” This is because, in September 2019, AstraZeneca had previously entered into collaborations with other colorectal cancer auxiliary diagnostic products. The finalization of this agreement with New Horizon Health also signifies the termination of AstraZeneca’s prior related collaborations.

So, what is the significance of this matter for both parties? Let us first examine at a superficial level what each side has gained.

For AstraZeneca, it has secured the distribution rights for Changweiqing in China.Undoubtedly, this represents substantial profits. For publicly listed companies, revenue is a critical metric—both AstraZeneca and New Horizon Health need it. Thus, even at the most basic level of product sales, this agreement can achieve a win-win outcome.

Moreover, this collaboration is not merely a partnership focused on early screening for AstraZeneca; rather, it pertains to the company’s overall strategic layout in the field of early screening.

Just two days before the signing, on March 13, under the guidance of “Healthy China 2030,” the “313 Screening Week” campaign, themed “A Small Step in Early Screening and Diagnosis, A Giant Leap for Healthy China,” was simultaneously launched in one hundred counties across China. The event was hosted by the Capacity Building and Continuing Education Center of the National Health Commission and supported by multiple parties, including People’s Daily Online People’s Health, the Chinese Red Cross Foundation, the China Primary Health Care Foundation, and AstraZeneca China.

“We chose the date of March 13th because its pronunciation in Chinese sounds like ‘shai yi shai,’ which means ‘to screen.’ On our screening vehicles, we have integrated screening for 55 chronic diseases and five types of cancer, delivering these services to grassroots frontline areas, including counties, townships, and villages. If we deploy dozens of such vehicles, they can cover more than 1,000 locations annually, ensuring that people in grassroots communities receive timely screening. Therefore, within our ecosystem, there is a particular need for visionary companies like New Horizon Health to form a strategic alliance with AstraZeneca. This alliance is not only commercial but also encompasses R&D collaboration, internationalization, and public welfare initiatives focused on early screening,” said Wang Lei, Global Executive Vice President of AstraZeneca, President of International Business and China, in an interview.

AstraZeneca aims to roll out early screening programs across China; naturally, its mobile units must feature products that have secured the “first certificate for early screening.” This imperative drove AstraZeneca to ultimately sign a three-year agreement with New Horizon Health, with Wang Lei personally attending the signing ceremony.

For New Horizon Health, product sales volume is undoubtedly the most apparent factor and constitutes the primary benefit derived from the “Changweiqing Promotion Agreement.”

New Horizon Health CEO Zhu Yeqing has always held a view about users: “I believe that after seeing our product online, most users will inevitably consult doctors they know well to ask whether the product is truly reliable. If the doctor confirms that the product is compliant, has been included in clinical guidelines, and has been prescribed by them to patients, consumers will feel much more reassured.”

Therefore, the collaboration with AstraZeneca on the sales of Colotect will help New Horizon Health establish connections with a broad base of gastroenterologists, enabling more frontline physicians to understand and recognize the clinical value of Colotect. This will allow New Horizon Health to achieve significantly greater efficiency when expanding into the out-of-hospital market in the future.

As a newly listed startup, New Horizon Health should currently focus on the rapid growth of its own capabilities. Therefore, another “non-binding” strategic cooperation memorandum holds deeper significance for New Horizon Health. The content of the memorandum can be briefly summarized in four Chinese characters: “warding off external threats and stabilizing internal affairs.”

“Expanding Globally,” AstraZeneca will collaborate with New Horizon Health to commercialize Colotect® in other international markets and explore its global promotion. A more robust insurance support system in global markets could serve as a payer for Colotect®. Given the significant success of Cologuard in the United States, if Colotect®, which demonstrates superior clinical performance compared to Cologuard, successfully enters overseas markets, it may well become another market favorite.

Amid the global expansion efforts, Wang Lei and Zhu Yeqing, CEO of New Horizon Health, revealed that given the widespread adoption of Cologuard in European and American markets, the company’s initial overseas foray may prioritize developing countries. Although the overall purchasing power in most developing nations is limited, the high-income segment with sufficient payment capacity remains substantial due to the large population base.

“Internal Strengthening”: AstraZeneca will collaborate with New Horizon Health to identify application scenarios for early screening products across a broader range of specific cancer types, and to jointly conduct R&D focused on high-value targets. AstraZeneca University will open up its sales, marketing, and training systems to support the upgrading of New Horizon Health’s training framework. Currently, New Horizon Health is in a critical phase of market promotion, with a primary focus on the clinical sector. Partnering with AstraZeneca at this juncture will provide New Horizon Health with a truly well-trained, top-tier promotional team, laying the groundwork for the market launch of Colosense and subsequent products.

A wise leader leverages external strengths. By partnering with AstraZeneca, New Horizon Health has successfully achieved a win-win outcome, with both companies securing what they need most at this stage.

Having discussed the apparent benefits to both parties under the agreement, let us delve deeper. If we consider only the terms outlined above, it would seem equally plausible to substitute AstraZeneca with any other major pharmaceutical or medical device company.So, what specific qualities of AstraZeneca ultimately led New Horizon Health to choose them as a promotional partner?

Let’s first examine the collaboration mechanism between the two parties. While news reports on this partnership provided only vague details regarding the division of responsibilities, Wang Lei and Zhu Yeqing briefly outlined the collaborative framework in their interview with us.

“Although we are two separate teams, in terms of sales of Changweiqing, we can be regarded as one team working together to drive progress. Compared with AstraZeneca’s digestive disease team, which numbers in the thousands, New Horizon Health’s team is relatively small. Therefore, our team focuses more on market access, while AstraZeneca’s team concentrates more on channel development, promotion, and clinical-stage activities, complementing each other,” said Zhu Yeqing.

“Changweiqing is truly an excellent product.” Wang Lei offered a fair assessment of Changweiqing in his characteristic understated manner, “Therefore, within AstraZeneca, there is no distinction made between New Horizon Health’s Changweiqing and the company’s other products; if anything, it is even more strongly encouraged.”

AstraZeneca’s promotional capabilities are recognized by New Horizon Health. Moreover, AstraZeneca’s sales team holds a significant advantage in county-level markets. At a forum in 2020, Dong Lijun, General Manager of the Gastroenterology and Full Product Portfolio Expansion Business Unit at AstraZeneca, noted that during the first half of 2020, amid the pandemic, AstraZeneca China achieved sales of $2.659 billion, representing a 14% year-on-year increase rather than a decline. This growth was primarily driven by strong performance in county-level markets, which offset the decline in sales from major cities.

At this point, let us return to the question left in the first part of this article.How can we alleviate user concerns and ensure that the initial awareness-raising among the target population in the field of early screening goes beyond just the “Poop Tube” to further drive adoption of “Changweiqing”?The key to this issue lies inWhich specific patient population is likely to forgo Changweiqing due to price considerations, opting instead for the more affordable but less effective Pupu Tube?

While there is a segment of price-sensitive consumers in the top-tier market, the larger population is distributed across lower-tier markets.Although New Horizon Health is accelerating the build-out of its own sales team, it remains far from achieving nationwide coverage. Relying solely on its in-house team would likely leave this population unreachable for an extended period, causing the nascent awareness of early screening not only to fail to fully materialize but also to gradually dissipate over time.

Not every company has the opportunity to tap into the lower-tier market, which encompasses 700–800 million people, but AstraZeneca does, and therefore its partners can as well.In this collaboration, AstraZeneca will take the baton from New Horizon Health, shouldering the mission of raising awareness for early screening in lower-tier markets. Leveraging its robust ground promotion team, AstraZeneca aims to disseminate the importance of early screening to every corner of China.

Educating the market is an arduous task, yet it is indispensable for early cancer screening. The collaboration between New Horizon Health and AstraZeneca is not merely about driving sales of Colotect; more importantly, it lays the groundwork for the imminent, vast early-screening market. Therefore, this initiative concerns not only the product sales of these two companies but also every enterprise dedicated to early screening, every individual with a predisposition to disease, and every person who still considers themselves healthy.

"As a healthy individual, I wish to have the right to be informed about my disease status when conditions permit."