Hengrui, AstraZeneca, Yuwell, Meinian, and Berry Genomics Unveil New Strategies on the Same Day
AstraZeneca Investment China
Pharmaceutical Manufacturer
Hengrui Pharma
Innovative and High-Quality Pharmaceutical Developer
Berry Genomics
High-throughput Gene Sequencing Technology Developer
health 100
Medical Examination Service Provider
yuwell
Developer and Manufacturer of Basic Medical Devices
Currently, China's healthcare industry is facing unprecedented changes not seen in years. The strategic development of leading enterprises has always been the barometer for industrial growth, capable of clearing the fog and identifying the right direction during turbulent transitional periods, thereby driving industrial progress.
At the 2019 West China Pharmaceutical Conference’s “Innovation Strategy Launch Event for Leading Enterprises in the Health Industry,” we could deeply feel the shock and impact brought by industry transformation, as well as witness up close the determination of leading enterprises to execute their “elephant turn.” VCBeat (WeChat ID: vcbeat) has compiled the strategies of five representative companies—Hengrui Pharma, AstraZeneca, Yuwell, Meinian Onehealth, and Berry Genomics—based on the speeches delivered by industry leaders at the event, aiming to provide a quick understanding in the shortest possible time.
If 2018 was the year when the “4+7” centralized volume-based procurement policy was announced, then 2019 was a year of regulatory oversight and transformation. Against the backdrop of China’s new healthcare reforms entering deep waters, generic drugs have entered an era of slim margins, while innovative drugs and biopharmaceuticals are ushering in a golden age. As a landmark enterprise in China’s innovative drug sector, Xu Yifu, Vice President of Hengrui Pharma, stated that Hengrui is no longer just Hengrui Pharma; the Hengrui Group encompasses Hengrui Medical and Hengrui Health.
Hengrui Pharma currently boasts a product portfolio spanning nearly 200 categories and four major business divisions, including the Oncology Division, Imaging Division, General Medicine Division, and Anesthesiology Division. Supported by the “New Hengrui” strategy, the company has established its own professional pharmacy standards, built extensive cold-chain support and end-to-end management systems for innovative drugs and biologics, implemented full-lifecycle patient management, and developed channel management capabilities compliant with U.S. FDA requirements.
In terms of innovative R&D, Hengrui Pharma is supported by 11 R&D centers worldwide and has recently established a new biopharmaceutical R&D center in the United States to vigorously advance biopharmaceutical research and development, which represents Hengrui’s primary strategic direction for innovation. The company boasts a robust pipeline of innovative drugs, with five patented medicines already on the market and another 40–50 awaiting future launch. Among these, two are pending regulatory approval, 20–30 are in Phase III clinical trials, and more than 30 are in Phase I clinical trials.
At the press conference, Xu Yifu unveiled Hengrui Pharma’s new strategy: while continuing to strengthen its existing strategies in oncology, medical imaging, and perioperative medications, the company will fully embrace new retail and chronic disease management strategies. Tactically, the company will adopt a patient-centric approach. For the first time, Xu Yifu proposed the vision of research-driven pharmacies leading the development of specialized pharmaceutical care, expressing the hope that real-world study data could be used to apply for approval of new indications, thereby advancing comprehensive pharmaceutical care and full-lifecycle management—referred to as “dual-comprehensive management.”
In Hengrui Pharma’s three-year plan to expand into new retail, the company aims to achieve sales of RMB 600 million in the first year, RMB 1.2 billion in the second year, and RMB 2 billion in the third year, while growing its sales team from 1,000 to 3,000 members. Notably, these targets are set excluding the Oncology Division, suggesting that its future vision is likely to far exceed these figures.
Another leading pharmaceutical company embracing the new retail strategy is the international giant AstraZeneca. Lai Minglong, General Manager of AstraZeneca China, highlighted two key strategic considerations: first, the hospital sector, which represents specialization, where treatments for major diseases and specialty drugs will increasingly converge; and second, chronic disease management, which signals that the integration between hospitals, pharmaceutical retail, community services, and primary healthcare institutions will become increasingly important.
Future pharmacies and new retail platforms will constitute a key strategic layout for AstraZeneca China. According to Lai Minglong, the construction of this platform began in 2015. In the future, pharmaceutical new retail will serve as a one-stop solution center for patients, building an ecosystem centered on disease areas. The second platform ecosystem focuses on R&D and incubation. AstraZeneca aims to facilitate the global launch of innovative drugs first approved in China, while also introducing global startups into China through AstraZeneca’s incubation platform. The third direction involves establishing an internet-based platform.
Three years ago, AstraZeneca established its Innovation Center in Wuxi, developing eight key therapeutic areas: Chest Pain Centers, Metabolic Disease Management Centers, Integrated Lung Cancer Diagnosis and Treatment Centers, Smart Nebulization Centers, Integrated Prostate Cancer Diagnosis and Treatment Centers, Departments of Respiratory and Critical Care Medicine, Gastrointestinal Tumor Prevention and Treatment Centers, and Community Chronic Disease Management Centers. In this regard, Lai Minglong stated that AstraZeneca’s principle is to break down broad strategic directions into specific diseases, and then scale up these focused disease-specific initiatives. The company aims to achieve specialized and detailed management of individual diseases, implementing solutions on a disease-by-disease basis. In 2019, the Innovation Center planned to reach 3,076 hospitals and serve 4 million patients.
Finally, Lai Minglong also mentioned the chain extending from hospitals to pharmaceutical retail, and then leveraging pharmaceutical retail as a platform to reach family health management. “The ‘family ecosystem’ is what we need to envision: Can pharmaceutical retail create a model that reaches entire families from individual patients through an integrated approach of ‘drugs–devices–diagnostics’? This is the future we foresee. This future will not be realized in just one or two years; we are currently in ongoing discussions with medical device companies on how to build this ecosystem.”
Medical devices are a crucial component in building a healthcare industry ecosystem. As a group company focused on medical device manufacturing, Yuwell is a highly representative enterprise. The Yuwell Group has three subsidiaries, including two listed companies, Yuwell Medical and Wandong Medical, as well as Bailing Medical, which was acquired. In 2018, the total sales of the Yuwell Group reached RMB 8 billion, with Yuwell Medical contributing nearly RMB 5 billion.
2018 marked the 20th anniversary of Yuwell, and also its tenth year since going public in 2008. Wu Qun, CEO of Yuwell Group, stated that during the first decade, Yuwell primarily focused on corporate survival, whereas the next decade will be dedicated to comprehensively addressing user health. Over the next 3–10 years, all of Yuwell’s strategic planning will be user-centric, focusing on consumer-oriented strategies, rejuvenation of its brand image, and digital transformation. By leveraging technological innovation to drive industry change, Yuwell aims to create value for user health.
Consumer-centric transformation leverages the synergy among products, customers, and users to reform products starting from the business model, thereby bringing them closer to end users. In its early stages, Yuwell’s development was primarily channel-driven, operating on a distributor-to-wholesaler model. Only in recent years has it expanded into the retail pharmacy market, connecting customers and end users through its product offerings. Notably, in the chain pharmacy segment, growth this year has exceeded 40%.
Youthfulization primarily refers to internal initiatives at Yuwell, focusing on talent assessment to progressively rejuvenate its workforce. Today, Yuwell’s senior executives are all born in the 1980s, while its core middle management consists of those born after 1985. Workforce rejuvenation has become a key performance indicator for Yuwell.
Third is digitalization. Leveraging operational data to “feed” R&D and manufacturing will be a key focus for Yuwell in the next decade. For manufacturing enterprises, greater emphasis will be placed on smart manufacturing capabilities and the ability of data feedback to inform R&D. Yuwell’s transition from its previous catch-up R&D model to a data-interactive R&D approach represents an evolutionary process.
Wu Qun further pointed out that in the era of 5G connectivity, pricing power for hardware, capabilities in intelligent manufacturing, and the ability to commercialize data are also critical for Yuwell. These factors impose new requirements on both the methods of service delivery and the execution capabilities.
When discussing healthcare service capabilities, the health checkup industry must be mentioned. Against the backdrop of upgraded consumption among healthy populations, enhanced cost containment in medical settings, and advancements in life science technologies, the industry is shifting from passive to proactive health management. However, China’s market for preventive medicine and health checkups remains in its early stages of development, with low penetration rates.
According to data shared by Yu Rong, Chairman of Health 100, the company served 30 million customer visits last year and achieved revenue of RMB 8.458 billion, yet its market share remains in the single digits. This indicates that there is still substantial room for growth in this highly fragmented industry.
Health 100’s goal for the next decade is to excel in the prevention of major diseases. Yu Rong stated that Health 100’s future core strategy will be technology-led and innovation-driven, focusing on its primary health examination business, leveraging data empowerment, and establishing a closed-loop ecosystem. In his view, many stages of the information collection process can be replaced by intelligent technologies. The combination of data-driven approaches and artificial intelligence can, on one hand, provide customers with more precise services, and on the other hand, high-quality data will lead to significant breakthroughs and innovations. Continuous health examination data samples serve as crucial support for technological innovation in the life sciences sector.
The future of health management entails the deep integration of retail pharmacies, physical examination centers, and medical institutions, extending even to sports scenarios and a broader range of other settings. In this regard, Meinian has deployed nearly 700 CT scanners across China, identifying over 3 million diabetic patients last year; the population with prediabetes and chronic conditions is substantial. Data accumulation also focuses on the prevention and control of major diseases and early cancer screening, with Meinian currently operating in seven major oncology business areas. Furthermore, the launch of “Meinian Good Doctor” in partnership with Ping An Good Doctor signifies that Meinian has achieved comprehensive coverage encompassing “examination,” “data storage,” “management,” “medical care,” and “insurance.”
Regarding its future development strategy, Meinian aims to build a robust ecosystem by leveraging traffic and technological innovation in preventive care. Data traffic will drive the rapid iteration of technological innovations, which in turn will enhance the competitiveness and customer stickiness of its health checkup services, thereby delivering a superior service experience.
The gene industry aligns most closely with the early screening market prioritized by Meinian Onehealth. Non-invasive prenatal testing (NIPT) is a genetically based diagnostic technology with a high level of clinical adoption and mature commercialization. Since its inception in 2008, NIPT has developed over the past decade, a period that also propelled Berry Genomics to go public. According to Zhou Daixing, CEO of Berry Genomics, the company has provided NIPT-based testing services to more than 3 million pregnant women, identifying over 15,000 fetuses with Down syndrome and reducing economic expenditures by at least RMB 36 billion.
Traditional NIPT technology can only detect three fetal chromosomal disorders, namely trisomy 13 (Patau syndrome), trisomy 18 (Edwards syndrome), and trisomy 21 (Down syndrome). Berry Genomics has now upgraded NIPT to NIPT Plus, which can screen for 100 types of fetal chromosomal disorders. In April this year, the results of a large-scale prospective follow-up study on NIPT Plus, conducted over four years with nearly 100,000 participants, were published in *Genetics in Medicine*, a prestigious sub-journal of *Nature*. The study demonstrated that NIPT Plus can effectively improve the detection rate of clinical fetal chromosomal abnormalities, providing strong evidence for its future adoption as a first-line prenatal screening method.
“Testing for 100 diseases is not the ultimate goal. We have just developed a technology that can detect nearly all genes, enabling Whole Exome Sequencing (WES) testing to cover more than 7,000 known genetic diseases and encompass almost all hereditary conditions. The technology is currently in the final stage of research and development,” introduced Zhou Daixing.
Aligning with Yu Rong of Meinian Onehealth’s emphasis on early cancer screening, Berry Genomics is also developing products for the full cycle of cancer care, with its first major strategic focus on patients progressing from hepatitis to cirrhosis and then to liver cancer. China has approximately 120 million hepatitis B virus carriers, with nearly 1% developing liver cancer each year; currently, there are no reliable methods for early detection of liver cancer. In response, Berry Genomics is collaborating with the Shanghai National Center for Liver Cancer Science on a prospective study, tracking data from a cohort of 10,000 participants over three years to develop an early screening product for liver cancer.
Consumer-grade genetic testing is also a key market for Berry Genomics. According to Zhou Daixing, China’s consumer genomics sector is still in its very early stages; by the end of 2018, only 1.5 million individuals had undergone testing, compared with nearly 26 million in the United States during the same period. However, China is experiencing rapid growth. Based on analyses by investment firms, it is projected that 55 million people in China will have access to consumer genetic testing by 2022. Currently, Yuan Gene, a consumer-grade genetic testing company jointly established and invested in by Berry Genomics and Prenetics, has partnered with Watsons in Hong Kong to offer consumer genetic testing services in its retail stores. This collaboration represents an important direction for the global promotion of consumer-grade genetic testing.
As can be seen, Berry Genomics is continuing to deepen its expertise in non-invasive prenatal testing (NIPT), extending gene sequencing technologies to the clinical diagnosis and treatment of various diseases, including genetic disorders and cancer. Zhou Daixing believes that using gene sequencing technology for comprehensive monitoring throughout the entire course of cancer will represent the next major wave. The advent of the consumer-grade genomics era will rapidly increase public acceptance of genetic testing, which holds significant promise for disease prevention.
Both the national strategy of “Healthy China 2030” and the irreversible trend of population aging signify that prevention and chronic disease management will become key themes in the industry’s future. Emerging business models centered on chronic disease management, early screening for chronic conditions, and early cancer detection are on the rise. Companies that previously offered standalone health checkup services or sold pharmaceuticals and medical devices are now building new scenarios and ecosystems to support users’ whole-process health management. Meanwhile, technology-driven firms are gradually evolving into data-driven enterprises, aiming to deliver more precise health management and medical interventions while enhancing efficiency and accessibility. The industry is accelerating its shift from passive medical care to proactive health.