Decoding the Rise of Tongshu Gene: Why This Oncology Genetic Testing Dark Horse Has Captured Investors’ Attention — An Interview with CEO Yan Linghua
A Trillion-Dollar Blue Ocean, A Golden Track: Tumor Genetic Testing Has Emerged as the Dark Horse of the Healthcare Industry in Recent Years, Attracting Fierce Competition from Investors Across the Board.
According to the “2019 Global Diagnostics and Genetic Testing Industry Report,” China’s diagnostics and genetic testing sector recorded 65 private equity financing transactions in 2019, with total funding amounting to approximately US$1.25 billion. Among these, genetic testing companies stood out, ranking at the top in both transaction volume and financing amount, accounting for 36% and 70% of the industry totals, respectively. In 2020, investment enthusiasm surged again as two genetic testing firms successfully listed on U.S. stock exchanges one after another.
Just a few days ago, another major financing round emerged in the field of oncology genetic testing. On September 22, Changzhou Tongshu Biotechnology Co., Ltd. (hereinafter referred to as "Tongshu Gene") announced the completion of its Series B financing, amounting to hundreds of millions of RMB. The round was led by Yansheng Venture Capital, with participation from Longma Peak Venture Capital, Xiran Capital, and Jiangsu Tuobang. This achievement has positioned Tongshu Gene as a rising star in the oncology genetic testing industry. Previously, Tongshu Gene received angel investment from Ningbo Boyi at its inception and secured Series A funding from Fosun Medical in 2018.
Why Has TONGSHU GENE Repeatedly Attracted Favor from Industrial Capital? Does It Have the Potential to Become a Future “Dark Horse” in the Industry? Let’s Listen to the In-Depth Insights of Yan Linghua, the Company’s CEO.
Yan Linghua, CEO of TONGSHU GENE
TONGSHU GENE’s mission is defined as “Innovation, Creating Value for Cancer Patients.” Its core essence lies in solving problems for cancer patients, identifying optimal treatment regimens, and ultimately extending or even curing lives. Centered on this core, TONGSHU GENE has structured its strategic layout around three aspects: “differentiated competition in two core businesses, deep cultivation of a high-quality niche sector, and focused advancement of a premier technology.”
When discussing the company’s mission, CEO Yan Linghua was deeply moved: “As a former clinician who interacted with patients daily, I have a more profound understanding than most other professionals of the immense trauma that cancer inflicts on patients and their families. This has become the core primal drive behind my entrepreneurial journey.”
Yan Linghua has over a decade of experience in the field of molecular oncology diagnostics. Before embarking on his business career, Dr. Yan served as an oncologist at Shanghai Pulmonary Hospital for seven years. At that time, cancer patients were often referred to as “one-year friends,” particularly those with lung cancer, due to the notoriously low survival rates. With the expanding clinical application of precision medicine, the survival period for cancer patients has significantly extended, transforming them from “one-year friends” into “five-year friends.”Recalling this period, Dr. Yan shared a memorable incident: During his early years as a physician, he was so consumed by daily workload that he never deeply reflected on the true nature of his work. One night, while on duty around midnight, he walked down the hospital staircase and heard faint, suppressed sobs that conveyed profound grief. Between the 10th and 9th floors, he saw a young woman in her twenties sitting on the stairs. Acting on professional instinct, he asked, “Which bed are you assigned to?” She replied, “Bed 32. My father was just diagnosed with advanced-stage lung cancer. Doctor, what should I do? It’s just my father and me depending on each other. If he passes away, I will have no home left. Moreover, my father is only in his fifties; he is still so young.”Dr. Yan spent over two hours talking with her that night. Fortunately, her father tested positive for an EGFR mutation and responded well to targeted therapy with gefitinib. This experience profoundly enlightened Dr. Yan, helping him realize that their daily work involves not only the cancer patients themselves but also their relatives and, indeed, entire families.
As he has grown older, Yan Linghua has gained a deeper understanding of this matter, particularly after being fully involved in the journey of his loved ones battling cancer. He deeply empathizes with the helplessness and suffering experienced by patients. For the families behind cancer patients, even if the patient can gain just one additional year of life, the joy and comfort it brings to the family are immeasurable. When discussing the motivation behind starting his business, Yan Linghua said, “Life between heaven and earth passes as quickly as a white horse flashing past a crevice; it is over in an instant. One must always do something meaningful. During those days, I often asked myself: What can I do to live a fulfilling and valuable life? The first image that came to mind was that of a little girl secretly crying. I realized that enabling cancer patients to find the optimal treatment plan through genetic testing, thereby gaining more opportunities for survival, is the source of my deepest joy. Therefore, in 2016, I resolutely decided to start a business to achieve this goal through precision medicine.” We must ensure that patients do not take detours in their treatment! He silently vowed to himself.
What Kind of Company Is TONGSHU GENE, Which Huawei Has Committed All Its Resources To? It is understood that “TONGSHU” is a high-tech enterprise focused on the R&D, production, and sales of tumor genetic diagnostics, driven by innovative technologies and featuring a multi-platform layout. Since its establishment, the company has experienced exponential growth in business volume, with sales ranking among the top in the industry. Meanwhile, it has completed strategic layouts across multiple regions, including its Shanghai R&D headquarters, third-party medical testing laboratories, and GMP-compliant production facilities.
Currently, the company has successfully established a compliant operational system centered on Next-Generation Sequencing (NGS), achieving “integration of three certifications” for its NGS genetic testing services (with reagents, instruments, and bioinformatics software all being products approved by the National Medical Products Administration [NMPA]). Meanwhile, the company boasts substantial reserves of core In Vitro Diagnostics (IVD) technologies, with a broad and smoothly advancing product R&D pipeline. The development of its first IVD product, the Microsatellite Instability (MSI) Detection Kit (using multiplex fluorescent PCR-capillary electrophoresis), is at a leading position in China. Clinical trials for two kits based on the MASS-PCR technology platform are currently underway simultaneously, while several other products are in the stages of registration testing or clinical studies.
Specifically, TONGSHU GENE’s business is divided into molecular pathology diagnostic products and tumor genetic testing services.
Molecular pathology diagnostic products are primarily positioned through differentiated strategic planning. TONGSHU GENE’s strategy is to “start from clinical needs, implement multi-platform deployment based on core technologies, and develop products with significant competitiveness.”
Yan Linghua stated, “No single technology dominates the field of molecular pathology.” Although next-generation sequencing (NGS) is a core technology in molecular pathology and currently the most prominent molecular diagnostic technique, clinical needs are diverse. Each technology has its corresponding application scenarios, and relying solely on one technology is far from sufficient to meet the complex needs of cancer patients. First-generation sequencing platforms, PCR, and other methods still possess advantages over NGS in terms of accuracy, speed, and cost.
Therefore, TONGSHU GENE meets the clinical needs of different tumor patients and various application scenarios by deploying first-generation sequencing platforms, quantitative real-time PCR (qPCR), next-generation sequencing (NGS) platforms, and CRISPR technologies.
In terms of next-generation sequencing platforms, TONGSHU GENE has developed the MULI-SEQ library preparation technology, which reduces the required DNA input to as low as 1 ng, thereby significantly conserving precious tumor samples. The company has also innovatively developed the PRIDE-cfTNA enrichment and detection technology, enabling the detection of fusion genes in cell-free RNA from blood samples. This advancement lowers testing costs while enhancing sensitivity.
Regarding first-generation sequencing platforms, TONGSHU GENE has developed a highly sensitive and specific multiplex fluorescent PCR detection technology capable of simultaneously detecting microsatellite instability (MSI) with 2-base pair (bp) repeats. This innovation increases detection sensitivity by 18%, addressing the limitations of traditional techniques, which have lower sensitivity and can only detect MSI with 3-bp repeats. Furthermore, by improving the SNAPshot technique, the simultaneous detection of mutations and MSI is achieved, significantly enhancing the detection sensitivity of first-generation sequencing methods.
In the field of quantitative fluorescence PCR, the company utilizes MASS-PCR technology to avoid wild-type amplification, enabling simpler interpretation. In the CRISPR domain, the company’s proprietary Credit-CRISPR technology achieves a limit of detection as low as the attomole (amol) level.
Leveraging a multi-platform layout and a strategy of coordinated development, TONGSHU GENE has grown into a leading player in China’s tumor genetic testing industry. It is reported that the company’s first IVD product, the Microsatellite Instability Detection Kit (multiplex fluorescent PCR-capillary electrophoresis method), is at a domestic leading stage in R&D. Two kits based on the MASS-PCR technology platform are currently undergoing clinical trials simultaneously. In addition, technologies such as MASE-CE, NGS ultra-low input library preparation, and CRIDIT-CRISPR have also advanced to the registration testing or clinical study stages.
In oncology genetic testing services, TONGSHU GENE has established a compliant operational system centered on next-generation sequencing (NGS), obtaining all three required certifications. Its testing service network now covers more than 500 core hospitals across China. Leveraging accumulated data, the company has built a translational research center based on the theory of tumor evolution and a tumor genomics biobank, conducting extensive translational studies. To date, it has published SCI-indexed articles with a cumulative impact factor exceeding 120.
“Seeing which direction the wind comes from” is the secret behind TONGSHU GENE’s ability to stay at the forefront of innovation. With years of deep engagement in the field of precision oncology diagnostics and extensive clinical experience, Yan Linghua and the company’s core team possess keen insight into industry trends and developments. This strategic acumen is precisely what industrial investors value in their participation in financing rounds.
In 2016, when China’s precision medicine industry was still in its infancy, Yan Linghua made several forward-looking predictions: low industry penetration, targeted therapies replacing chemotherapy as an emerging trend, the removal of payment barriers for targeted drugs, and a promising industry outlook. These insights guided Yan Linghua to establish TONGSHU GENE, firmly expanding into the tumor genetic testing market. Within just three years, the company’s business volume experienced exponential growth, with sales ranking among the top in the industry.
Today, precision oncology diagnostics has entered the 2.0 era, transitioning from a phase of rapid expansion to one characterized by intensive cultivation and compliance-driven restructuring. This new period brings fresh opportunities. Yan Linghua is confident about leading the race in precision oncology diagnostics. “Research data shows that there are approximately 4 million new cancer cases annually in China, with about 6%–10% of patients utilizing tumor genetic testing products. The average expenditure per patient on such tests is around RMB 8,000. Based on this, the conservative estimate for the market size is RMB 1.9 billion. In addition, there are non-essential products including prevention, early screening, and recurrence monitoring. Comprehensive calculations suggest that the total market size of the tumor genetic testing industry ranges from RMB 27 billion to RMB 42 billion. Currently, the competitive landscape of the tumor genetic testing market remains unsettled, indicating at least a tenfold growth potential. As long as we adhere to the path of compliance and productization, success is inevitable.”
Building on its multi-platform layout, TONGSHU GENE’s strategy includes focusing on developing deep expertise in a specialized area. Yan Linghua stated that the company’s ctDNA detection technology platform is now among the best in China and ranks at an internationally advanced level.
ctDNA is the future of tumor genetic testing. It not only spares patients with advanced-stage cancer from the hardships of tissue biopsy but also serves as a crucial monitoring tool for achieving true cure in postoperative patients with early- to mid-stage disease. However, given the trace amounts and low abundance of ctDNA, the sensitivity of ctDNA detection is particularly critical. TONGSHU GENE’s ctDNA detection technology platform addresses extraction, library preparation, sequencing, and bioinformatics analysis simultaneously, ensuring that no ctDNA molecules are lost during the detection workflow. In the future, TONGSHU GENE will concentrate the majority of its resources on the research and development of its ctDNA product line to maintain its competitive advantage.
Early prevention and early intervention represent the direction of cancer treatment. Cancer early screening based on DNA methylation has also become a key development trend in the industry, and TONGSHU GENE has established its presence in this niche sector.
Amid the favorable landscape of the precision oncology diagnostics industry, TONGSHU GENE will continue to uphold its mission of “Innovation, Creating Value for Cancer Patients.” Committed to the field of precision medicine, the company will implement a multi-platform strategy, center on hospitals, and pursue a dual-track approach integrating products and services, thereby delivering high-quality products and services to cancer patients and oncologists.