Yikon Genomics Completes RMB 220 Million Series C Financing to Lead the Assisted Reproductive Technology Market

On November 4, 2019 (Beijing Time), Shanghai Xukang Medical Technology Co., Ltd. (hereinafter referred to as “Yikon GENOMICS”) announced the completion of its Series C financing round, raising RMB 220 million. The round was led by Jinhe Capital (an affiliated fund of KingMed Diagnostics), with participation from Yuexiu Industrial Fund, Zhongyuan Jiupai Fund, and Bank of Communications Sci-Tech Innovation Equity Investment Fund, among others. The funds will be used to continuously develop and promote innovative patented products and services centered on reproductive genetics and maternal and child health, solidify Yikon GENOMICS’ leading position in the field of assisted reproduction, improve the success rates of assisted reproductive treatments, effectively prevent birth defects, and facilitate the rapid development of the global reproductive health market.

Dr. Lu Sijia, CEO of Yikon GENOMICS, and Mr. Wang Zhifei, Executive Director of Jinhe Capital, attended the signing ceremony on behalf of Yikon GENOMICS and Jinhe Capital, respectively.

Yikon GENOMICS, established in 2012, is dedicated to the development and application of single-cell whole-genome amplification and sequencing technologies, providing precise medical testing solutions for eugenics and personalized tumor diagnosis. Since its inception, Yikon GENOMICS has developed numerous innovative patented products and technologies, including NICS (Non-Invasive Chromosome Screening) for embryo aneuploidy detection, MaReCs (Marker Reduction for Embryo Chromosomal translocation Status identification) for identifying balanced translocation status in embryos, ERT (Endometrial Receptivity Test) for assessing endometrial receptivity, and ChromInst, a one-step single-cell amplification and library preparation technology. The company has published multiple papers in international journals such as *PNAS*, *Human Reproduction*, and *Cell Death & Disease*, achieved several breakthroughs through multi-center clinical research collaborations, and earned recognition and acclaim from experts, scholars, clinicians, and patients both domestically and internationally.

In June 2017, the PGS test kit developed by Yikon GENOMICS was granted special approval status for innovative medical devices by the China Food and Drug Administration (CFDA) and passed the registration testing for medical device products conducted by the National Institutes for Food and Drug Control (NIFDC).

To better promote the healthy development of the assisted reproductive technology (ART) market and improve treatment success rates in the field of reproduction, Yikon GENOMICS and KingMed Diagnostics signed a framework cooperation agreement on assisted reproduction on September 1, 2019. The two parties will collaborate in areas including the development of clinical testing capabilities for reproductive genetics, the construction of testing platforms for reproductive centers, market development, joint research and development, and in vitro diagnostics (IVD) business cooperation. Building on thorough communication and leveraging their respective advantages and resources, both parties will jointly establish the KingMed Diagnostics & Yikon Reproductive Genetics Joint Laboratory to support the healthy development of China’s eugenics and optimal childbearing sector.

Dr. Lu Sijia, CEO of Yikon GENOMICS, and Ms. Zhao Weiwei, Vice President of KingMed Diagnostics, signed the agreement on behalf of their respective companies.

To date, Yikon GENOMICS has successfully expanded its business to more than 20 countries, including the United States, the United Kingdom, Russia, Japan, Thailand, Malaysia, and Cambodia. The company has established strategic partnerships and conducted implementation validations with renowned reproductive medicine centers such as New Hope, MFC, Genetix, Foundation Lab, and CRHG. By exporting its technology, Yikon GENOMICS has promoted efficient, convenient, and precise preimplantation and prenatal genetic testing solutions—including NICS (Non-Invasive Chromosome Screening) and rapid 9-hour embryonic chromosomal testing—to a global audience. It provides personalized, comprehensive reproductive genetics solutions for individuals facing infertility challenges, collaborating with peers worldwide in the field of reproductive health to help bring new lives into the world.

Dr. Lu Sijia, Co-founder and CEO of Yikon GENOMICSstated: “We are deeply grateful to Jinhe Capital and the co-investing institutions for their trust in the Yikon GENOMICS team. I hope that we can leverage our independently developed technologies to empower the health of billions of people worldwide. I also believe that only through high-quality products and technologies, coupled with joint efforts and win-win collaboration with outstanding partners, can we maximize value for all parties involved.”

Since the birth in 2014 of a baby from the collaboration between Yikon Genomics and Peking University Third Hospital, which used MALBAC technology to block the familial inheritance of hereditary multiple osteochondromas, we have directly or indirectly helped 100,000 families with genetic disorders and infertility achieve healthy pregnancies through our independently developed technologies.

Yikon GENOMICS leverages its proprietary R&D capabilities and expert resources to deeply address the needs of patients and clinicians, consistently delivering safe, rapid, and convenient innovative products and services. The company has developed an integrated “Sunshine, Seed, and Soil” solution for reproductive genetic prevention and intervention, spanning from screening and diagnosis of monogenic and chromosomal disorders to preimplantation genetic testing (PGT). By partnering with KingMed Diagnostics, a leader in the medical laboratory industry, Yikon GENOMICS facilitates the decentralization of high-quality reproductive diagnostic resources to primary care settings, supports the implementation of tiered diagnosis and treatment, and jointly promotes the broad clinical adoption of its products and technologies.

Hao Bixi, Senior Vice President of KingMed Diagnostics"Stated: 'As a pioneer in China’s third-party medical testing industry, KingMed Diagnostics is committed to providing leading integrated medical diagnostic information services to healthcare institutions at all levels across the country, by continuously leveraging its core resource advantages of “large platform, extensive network, comprehensive services, large sample base, and big data.”'"

Jinhe Capital focuses on investments in the healthcare sector. Since its establishment, we have closely monitored frontier advancements in reproductive genetics and oncology testing. Through in-depth industry research, we believe that Yikon GENOMICS is a leading enterprise with high growth potential in its niche market. Under the leadership of Professor Xie Xiaoliang and Dr. Lu Sijia, the company has independently developed multiple core technologies that have been widely applied in both scientific research and clinical settings. In the future, both parties will leverage their respective strengths to form a powerful partnership, jointly promoting the commercialization of scientific and technological achievements in eugenics, as well as tumor detection and treatment, thereby supporting Yikon GENOMICS in achieving new development in reproductive health and other fields.

● The WHO predicts that infertility will be listed as one of the three major diseases affecting humanity in the 21st century, second only to cancer and cardiovascular and cerebrovascular diseases. In China, influenced by factors such as the natural environment, work-related stress, and delayed childbearing age among women, the incidence of infertility has been rising year by year, reaching 12.5%–15% in recent years.

● In 2018, the number of live births was 15.23 million, with a birth rate of 10.94‰, representing a decrease of 2 million from 2017. Both the number of live births and the birth rate continued to decline, with the birth rate approaching the lowest levels worldwide.

● The current status of women of childbearing age is characterized by a decline in fertility rates among those in the optimal childbearing age group and a significant increase in advanced maternal age pregnancies. Fifty million women are aged 35 or older, facing substantial challenges in ensuring infant health. The comprehensive relaxation of China’s birth policy affects a target population of 80 million women of reproductive age.

● The rate of spontaneous abortion remains high. The clinical incidence of spontaneous abortion is 15%–25%; more than 50% of miscarried embryos are caused by genetic and chromosomal abnormalities.

● The birth defect rate among newborns in China is approximately 5.6%, with monogenic disorders and chromosomal abnormalities being the primary causes. The "Healthy China Action" plan, issued by the State Council in 2019, explicitly stipulates that couples with a family history of genetic diseases or a history of adverse pregnancy outcomes should seek targeted counseling and guidance from medical institutions.

Headquartered in the BioBAY of Suzhou Industrial Park, Yikon GENOMICS is a high-tech enterprise co-founded by Professor Xie Xiaoliang, a renowned Chinese-American scientist who is a tri-academician of the U.S. National Academy of Sciences, the National Academy of Medicine, and the American Academy of Arts and Sciences, as well as a Foreign Member of the Chinese Academy of Sciences and Director of the Peking University Center for Optical Imaging, together with his former student, Dr. Lu Sijia. The company is dedicated to developing and applying single-cell whole-genome and transcriptome amplification and sequencing technologies, industrializing these innovations for precise pre-conception prevention and control of genetic diseases. It has achieved remarkable accomplishments in reproductive genetics, maternal and child health, tumor screening and diagnostics, and life sciences research. With a workforce of 220 employees, the Group has established branches in Jiangsu, Shanghai, Beijing, and the United States. Its business covers 32 provinces, municipalities, and autonomous regions across China, while also expanding into key markets in the United States, Southeast Asia, and other overseas regions, maintaining a global perspective and continuously pursuing innovation.

Guangzhou KingMed Diagnostics Group Co., Ltd. is a high-tech service enterprise centered on third-party medical testing and pathological diagnosis, dedicated to providing leading integrated medical diagnostic information services to healthcare institutions at all levels across China. Since the 1990s, KingMed’s core founding team has actively explored operational models for outsourced medical testing services in China, pioneering the domestic third-party medical testing industry. After years of development, it has become a market leader in this sector. KingMed has established 37 provincial-level medical testing laboratories in mainland China and the Hong Kong Special Administrative Region, boasting comprehensive and diverse technological platforms, a nationwide service network, and big data resources. Under its “clinical- and disease-oriented” strategy, KingMed has established a Gynecological Disease Center, offering integrated clinical testing services for infertility, covering reproductive immunology, genetics, endocrinology, and infectious diseases.

Jinhe Capital is an investment institution focused on the healthcare sector, headquartered in Guangzhou. The fund manager boasts over 20 years of experience in the medical industry and has successfully established China’s largest third-party medical laboratory. Jinhe Capital’s inaugural fund has gained recognition from numerous institutional investors, including prominent domestic fund-of-funds. Jinhe Capital will make strategic investments in areas such as in vitro diagnostics (IVD) to build an industrial ecosystem, committed to leveraging the synergy between industry and capital to cultivate enterprises with international competitiveness.

Guangzhou Yuexiu Industrial Investment Fund Management Co., Ltd. (hereinafter referred to as “Yuexiu Industrial Fund”) was established in August 2011. As a fund management institution under Guangzhou Yuexiu Financial Holdings Group, Yuexiu Industrial Fund specializes in investments in strategic emerging industries and fixed-income businesses. With strategic emerging industry investment and fixed-income investment as its two core investment pillars, the company continuously explores innovative business models. Leveraging its sustained capabilities in seizing investment opportunities in emerging industries, discovering and enhancing corporate value, and meeting the wealth management needs of high-net-worth individuals, Yuexiu Industrial Fund has built a comprehensive financial investment platform encompassing private equity investment and fixed-income financial investments represented by state-owned capital funds. By the end of 2015, the total assets under management had exceeded RMB 20 billion. The firm has emerged as a new leader in South China’s real estate investment fund and private equity investment fund sectors, making outstanding contributions to promoting regional economic growth and supporting the development of emerging industries.

Zhongyuan Jiupai Fund is an industrial fund jointly initiated in October 2016 by Zhongyuan Shares (300018), a listed company; Hubei High-Tech Industry Investment Group Co., Ltd., the science and technology investment and financing platform of Hubei Province; and Shenzhen Qianhai Jiupai, a private capital entity. With a total size of RMB 250 million, the fund focuses primarily on investments in the medical and healthcare industry and is managed by Wuhan Zhongyuan Jiupai Industrial Investment Management Co., Ltd. The Zhongyuan Jiupai management team boasts extensive experience, including multiple national and provincial-level review experts in the investment sector. The team has previously initiated, established, and participated in the management of six equity investment funds, three of which had participation from the Ministry of Science and Technology, with cumulative assets under management exceeding RMB 1 billion. Adhering to the principles of professional investment, standardized management, and market-oriented operations, Zhongyuan Jiupai is committed to growing alongside its portfolio companies, achieving win-win outcomes for investors, portfolio companies, and the management team.

BOCOM International Holdings Limited (“BOCOM International”, Stock Code: 3329.HK), established in 1998, is the sole integrated securities and securities-related financial services platform of Bank of Communications, a state-controlled joint-stock commercial bank, in Hong Kong. It is one of the earliest licensed securities firms in Hong Kong with Chinese mainland background. Having weathered multiple economic and industry cycles as well as regulatory reforms, BOCOM International has grown into one of the largest securities firms in Hong Kong, specializing in securities brokerage and margin financing, corporate finance and underwriting, investment and lending, asset management, and advisory services.The BOCOM Sci-Tech Innovation Equity Investment Fund (Shanghai) is the first private equity fund led by the BOCOM Group. Designed to leverage the extensive network of the commercial bank and the Group’s comprehensive financial service capabilities, it aims to capitalize on China’s transition from old to new growth drivers and the launch of the STAR Market, thereby creating core wealth management products linked to the capital markets. As the manager of the BOCOM Sci-Tech Innovation Fund and the cross-border wealth management integrated platform of the BOCOM Group, BOCOM International fully leverages its advantages in comprehensive cross-border financial services. With strong research capabilities and extensive domestic and international investment experience, it provides high-quality, internationalized, and market-oriented services to the Fund. Through an “investment-lending linkage” strategy, it pools the BOCOM Group’s abundant domestic and overseas resources to provide investee companies with integrated financial empowerment encompassing “investment + lending + IPO + M&A financing + research + wealth management.” Relying on a robust and mature investment research framework and a risk appetite characterized by “stability, prudence, and compliance,” BOCOM International strives to generate long-term, trustworthy investment returns for investors.