Xiangkang Technology Files IPO Prospectus: A Problem Solver in the Medical Device CRO Sector with Low Employee Turnover and High Client Retention
“Only with a solid professional foundation can one achieve remarkable success in the future.” In an interview with VCBeat, Ms. Yi Min, Founder and CEO of Guangzhou Xiangkang Medical Device Technology Service Co., Ltd. (hereinafter referred to as “Xiangkang Technology”), mentioned this statement more than once.
As a leading CRO company in China, Xiangkang Technology’s core business is providing high-quality, full-chain services to manufacturers of various medical devices, including medical devices, in vitro diagnostic reagents, and medical software (such as artificial intelligence).
“From my internship in 2002 to joining Mindray, a leading medical device company, I gained comprehensive insights into every aspect of the medical device industry, which solidified my career direction.” When discussing her reasons for starting a business, Ms. Yi Min stated that, on one hand, she remains optimistic about the future of China’s medical device market and hopes to leverage her 20 years of experience in medical device R&D and regulatory registration to provide high-quality technical services to the industry; on the other hand, entrepreneurship allowed her to realize service concepts that were unattainable during her corporate career, specifically by diligently helping companies address the “last mile” challenges prior to product commercialization. “Thus, in 2015, I made up my mind to turn these ideas into reality.”
“Every client who entrusts us with their clinical trial registration services places a rare and valuable trust in us. At its core, a CRO is a technology-driven service provider, where both technical expertise and high-quality service are indispensable,” said Ms. Yi Min. Over the past five years, Guangzhou Xiangkang Medical Research Co., Ltd. has remained steadfastly committed to prioritizing its clients’ needs, addressing challenges in quality systems, regulatory registration, and clinical trials from both technical and regulatory perspectives. While helping clients resolve issues throughout the service process, the company has continuously improved its own operations, fostering mutual growth with its partners.
From a business perspective, clinical trials are capital-intensive and high-risk endeavors. “The project cycles are long, process control is complex, and the risk level is high. Entrusting projects to our startup team at the very inception of our venture reflects not only confidence in our technical capabilities but also trust in our team as a whole. Therefore, we started from the ground up, accumulating experience and growing steadily through the process,” Ms. Yi Min told VCBeat. As a startup, Guangzhou Xiangkang Medical Research Co., Ltd. earned recognition from the majority of its clients by delivering high-quality services despite limited resources in its early stages. “Companies that partnered with us at the outset continue to entrust us with new projects to this day.”
It is precisely through high-quality service and strong cost-effectiveness that Xiangkang Technology has gradually built its reputation within the industry. The period from 2017 to 2020 marked three years of rapid growth for Xiangkang, during which its workforce expanded from over 30 employees to more than 60, with technical personnel accounting for 90% of the total staff. Initially focused on Guangzhou and radiating out to the Pearl River Delta region, the company’s partner network now covers the entire country. Among all regions, Guangdong Province, where Xiangkang Technology is headquartered, has the largest customer base, primarily benefiting from the cluster advantages of Guangdong’s medical device industry, where a wide variety of medical device products are available.
“For us, this presents both a challenge and an opportunity—a unique advantage that has enabled our rapid growth. Moving forward, we will further expand our service coverage to serve more enterprises,” stated Ms. Yi Min. She noted that Xiangkang Technology has consistently strengthened its core competencies and refined its internal capabilities throughout its journey, thereby earning customer trust during its development.
As of now, Xiangkang Technology has completed the registration filings for over 100 products. Its core business portfolio includes MD (Medical Device) products in interventional medicine, intracranial applications, ophthalmology, orthopedics, dressings, active rehabilitation, 3D printing, and AI-based solutions. Its IVD (In Vitro Diagnostics) full-category offerings encompass personalized medication testing reagents, companion diagnostic reagents, infectious disease diagnostics, oncology diagnostics, POCT (Point-of-Care Testing), and home-use diagnostic reagents, among others.
A Contract Research Organization (CRO) is a highly specialized outsourcing service, primarily involving clinical trial protocol design, clinical trial monitoring, project management, data management, and statistical analysis. Its clients are mainly pharmaceutical and medical device companies, for which it provides services such as clinical trials and medical statistics.
According to the “Research Report on the Prospects and Investment Opportunities of China’s Medical Device Industry (2019–2024)” released by China Business Industry Research Institute, China’s medical device market maintained a rapid growth trend from 2014 to 2018. In 2017, the market size reached RMB 445 billion, with a growth rate of 20.3%, and exceeded RMB 500 billion in 2018. The costs incurred by domestic medical device manufacturers for clinical research organization (CRO) services prior to market launch in China account for approximately 3% of their sales revenue. Based on China’s medical device market size of RMB 500 billion in 2018, the market size for medical device marketing authorization (MA) services is estimated to reach RMB 15 billion.
The market is vast, with abundant opportunities. Within this landscape, talent—as a core industry resource—has always been a key focus in the medical device CRO sector. At Guangzhou Xiangkang Medical Research Co., Ltd., 80% of team members hold bachelor’s degrees, 10% hold master’s degrees, and 10% hold doctoral degrees. All team members come from various manufacturing enterprises and CRO companies, with an average of five years of industry experience. Department heads and supervisors each have over ten years of experience in their respective fields.
“In terms of organizational management, we advocate a partnership-based working relationship, foster a learning organization, and continuously drive self-renewal. Our team shares unified and clear objectives, functioning as a cohesive group capable of collaborating effectively to achieve these goals. The company also provides competitive benefits and career development planning. Under this management model, staff turnover remains low, with an annual resignation rate below 10%,” said Ms. Yi Min.
Moreover, in terms of organizational management, Xiangkang Technology has established a comprehensive Standard Operating Procedure (SOP) management system. By strictly adhering to SOPs, the company minimizes product approval risks and accelerates time-to-market. It has also fostered strong collaborative relationships with industry associations, standards committees, testing centers, and Good Clinical Practice (GCP) hospitals. The company closely studies national policies and regulations and boasts a professional data management and statistics team, as well as a stable project management and monitoring workforce.
“Frequent repeat orders from 80% of our long-standing clients further attest to the professionalism of our team,” stated Ms. Yi Min. Over the past five years, Xiangkang has spearheaded more than 180 clinical trials, over 100 regulatory registrations, and the design and quality system establishment for more than 30 manufacturing facilities, serving over 100 medical device companies.
The outbreak of the novel coronavirus pneumonia epidemic this year has propelled the medical device industry to the forefront of the wave.
In terms of policy, the National Health Commission and the National Medical Products Administration have successively issued medical device policies. While deepening the reform of the review and approval system, greater emphasis has been placed on post-market supervision of medical devices to ensure their safety and effectiveness for public use.
Future clinical trials will become more standardized and rigorous, imposing higher demands on CRO companies. “In today’s market, where product homogenization is severe, more companies seek to pursue differentiation. With the growing number of innovative products, innovation hinges on a thorough understanding and interpretation of regulations, which presents greater challenges for CROs.”
Therefore, the ability to continuously resolve issues throughout the service process is of paramount importance. Key indicators that test a CRO’s professionalism include system establishment, preparation of registration dossiers, design of clinical trial protocols, and clinical project management, all of which directly impact whether a company can ultimately obtain marketing authorization. “Xiangkang Technology is committed to being a problem-solver, working alongside enterprises to address the various challenges encountered along the way.”
Regarding the future development of the CRO industry for medical devices, Ms. Yi Min indicated that there are three trends worth paying attention to.
First, brand and reputation building. As a service-oriented industry, it is crucial for medical device CROs to build their brand and reputation. In the future, amid increasingly stringent regulations and intense competition, brand and reputation will become key factors determining whether a company can secure a foothold in this field.
Second, improvements in management standards and project completion speed. In the face of an increasingly complex market environment, the medical device industry is placing higher demands on CRO companies. The level of management proficiency is a critical factor determining whether an enterprise can sustain steady progress.
The speed at which a project reaches the market determines the client company’s market competitiveness and the pace of future product launches; therefore, the speed of clinical trial completion is particularly critical.
Third, Internet-enabled clinical trials. “In the future, the integration of the internet with clinical trials will become increasingly prevalent; seizing this trend is key to securing the future.”
“The current national policy environment is highly conducive to industry development, presenting both opportunities and challenges for CRO companies like ours. We firmly believe that high-quality services inevitably attract more partners.” Looking ahead, Xiangkang Technology will continue to actively advance its clinical trial and process services, building a strong brand and reputable standing within the industry. The company is committed to reducing employee turnover and increasing repeat business rates through lean management and by expanding its problem-solving capabilities. It aims to secure product registrations that are well-adapted to market demands, striving to establish “Xiangkang Technology” as a top-tier domestic CRO for medical device clinical trials.