Pharma Digital Innovation Gains Momentum: Novartis Partners with Tencent, Eli Lilly Teams Up with Microsoft, and MSD Joins Forces with Amazon

Over the past two decades, medical e-commerce has been a burgeoning frontier and an arena dominated by industry titans and capital. Recently, VCBeat had the privilege of interviewing many of these key figures, revisiting the tumultuous journey of their rise and fall.

September 26–27, the 2018 Medical Technology World Forum (MTWF2018) will be held at Le Méridien Shanghai Minhang Baolong Hotel. The forum is co-hosted by the Industry-University-Research Collaboration Coordination Department of the China High-Tech Industrialization Research Association, VCBeat, and VBInsight, with the theme “Infinity.”

After in-depth research, VCBeat has found that the “Notice on Further Promoting the Construction of Information Systems in Medical Institutions with Electronic Medical Records at the Core” will have an extraordinary impact on the healthcare informatics market. The rigid demand driven by this policy will bring significant benefits to this sector.

Meanwhile, VCBeat has also observed that this market features a wide variety of products, lacking unified standards in terms of naming and functionality, with significant price disparities. Hospitals undertaking informatization initiatives must carefully select solutions based on their specific needs to comply with the requirements set forth in the “Notice.”

2017 was a pivotal year for advancing the Healthy China initiative and implementing the 13th Five-Year Plan, as well as the ninth year of the “New Healthcare Reform.” While China’s medical and health sector achieved certain accomplishments, it also faced numerous challenges amid the critical juncture of social transition.

In June this year, the National Health and Family Planning Commission released the “2017 Statistical Bulletin on the Development of China’s Health and Wellness Undertakings,” which presents the basic status of health resources, medical services, and primary healthcare in China in 2017. This report provides a comprehensive review of the development of China’s healthcare sector by integrating data from 2010 to 2016.

Chain pharmacies have a long-established history in the United States. Given the similar operating environments for chain pharmacies in China and the U.S., the developmental trajectory of the American market offers valuable insights and strategic guidance. For this reason, VCBeat has analyzed the evolution of the U.S. chain pharmacy industry and compared it with the current state of China’s pharmaceutical retail sector to provide directional insights.

Ma Yinglong’s Transformation: Adopting the Big Health Industry Model

On September 17, Ma Yinglong issued an investment announcement stating that it would establish Wuhan Ma Yinglong Grand Health Co., Ltd. The new company will primarily engage in the research and development, production, wholesale, and retail of cosmetics; food products (including health supplements); sanitary products; disinfectants; non-woven fabric products; plastic products; paper products; medical consumables; protective supplies; anti-static products; gloves; and related items.

Lilly China and Microsoft China Enter Strategic Partnership to Empower Healthcare Innovation with Artificial Intelligence

On September 18, Eli Lilly China and Microsoft China entered into a strategic partnership. Leveraging Eli Lilly’s leading market position and industry insights in the healthcare sector, as well as its forward-looking exploration in digital innovation, and combining these with Microsoft’s cutting-edge artificial intelligence technologies, cloud computing services, and ecosystem advantages, the two companies will jointly advance extensive collaboration in service, technology, and marketing within China, aiming to create a new industry ecosystem of “AI + Healthcare.”

On September 18, Eli Lilly China and Microsoft China entered into a strategic partnership. Leveraging Eli Lilly’s leading market position and industry insights in the healthcare sector, along with its forward-looking explorations in digital innovation, and combining these with Microsoft’s cutting-edge artificial intelligence technologies, cloud computing services, and ecosystem advantages, the two parties will jointly advance extensive collaboration in service, technology, and marketing within China, aiming to create a new industry ecosystem of “AI + Healthcare.”

WuXi AppTec Initiates H-Share Listing Process, Will Possess Dual “A+H” Financing Platforms

On the evening of September 18, WuXi AppTec’s application materials for the issuance of H shares were disclosed on the website of the Hong Kong Stock Exchange (HKEX). The process for WuXi AppTec’s H share offering was officially launched following a series of key milestones: the Board of Directors approved the proposal to issue H shares and list on the Main Board of the HKEX on July 1; shareholders voted in favor of the proposal at the general meeting on August 22; and the China Securities Regulatory Commission (CSRC) accepted the application on September 4.

Alliance Medical's Two Independently Developed Products Receive FDA Fast Track Designation

On September 21, biopharmaceutical company MicuRx Pharmaceuticals announced that the U.S. Food and Drug Administration (FDA) has granted Qualified Infectious Disease Product (QIDP) and Fast Track designations to its independently developed Contezolid (MRX-I) and its prodrug Contezolid Acefosamil (MRX-4) for the treatment of acute bacterial skin and skin structure infections (ABSSSI).

$200 Billion Trade War Erupts! The Landscape of the Medical Device Industry Chain Is Set to Change

On September 18, U.S. President Donald Trump formally announced the imposition of an additional 10% tariff on $200 billion worth of products originating from China, effective September 24. This tariff rate will remain in place until the end of the year. Starting January 1, 2019, the rate will increase to 25%. This move signifies a severe escalation of the U.S.-China trade war. Meanwhile, China will be compelled to implement simultaneous countermeasures.

The Ministry of Commerce announced that additional tariffs would be imposed on goods listed in the U.S.-targeted tariff schedules attached to MOFCOM Announcement No. 63 and the Tariff Commission’s Announcement No. 6 (specifically, the second batch of $60 billion worth of Chinese imports from the United States), effective from 12:01 a.m. on September 24, 2018. Although medical devices account for a smaller proportion of the list, which is dominated by low-end products such as cotton yarn and rubber goods, this move will bring about profound changes to the industry. In addition to accelerating import substitution, it will also reshape the structure of the medical device supply chain.

Harbin Pharmaceutical Group Seeks to Acquire Health Supplement Giant GNC

On September 17, Harbin Pharmaceutical Group released the “Announcement on Progress Regarding the Subscription of Convertible Preferred Shares Issued by GNC,” stating that the Committee on Foreign Investment in the United States (CFIUS) had completed its review of the proposed transaction under the Securities Purchase Agreement between GNC Holdings, Inc. and the Company, whereby the Company would purchase 299,950 convertible preferred shares from GNC at a price of $1,000 per share, for a total consideration of approximately $300 million. CFIUS determined that the transaction poses no unresolved national security concerns. Following CFIUS approval, the transaction remains subject to approval or filing with regulatory authorities such as the Heilongjiang Provincial Development and Reform Commission. This development marks another step closer to Harbin Pharmaceutical Group’s successful acquisition of GNC, the giant in the health supplement industry.

Jinxin Fertility Secures Strategic Lead Investment from Warburg Pincus and CITIC Bank International, Deepening Its Global Strategic Layout

Recently, Jinxin Fertility successfully completed a major transaction, led by its existing strategic shareholder Warburg Pincus and the newly introduced CITIC Bank (Hong Kong) Investment Co., Ltd. (“CITIC Bank Investment”), a subsidiary of China CITIC Bank Corporation Limited (“China CITIC Bank”). Follow-on investors included Sequoia China, WuXi AppTec, and others, fully reflecting investors’ confidence in the industry as well as in Jinxin Fertility’s investment value and prospects.

China Resources Pharmaceutical Acquires Jiangzhong Pharmaceutical

On September 17, Jiangzhong Pharmaceutical issued the “Announcement on the Supplementary Agreement to the Capital Increase Agreement Signed by the Controlling Shareholder, Jiangzhong Group.” Upon completion of this capital increase, China Resources Pharmaceutical Holdings will hold a 51% equity interest in Jiangzhong Group and thereby gain control over it. The actual controller of Jiangzhong Pharmaceutical will change from the State-owned Assets Supervision and Administration Commission of Jiangxi Province to China Resources Limited, with the ultimate actual controller being the State-owned Assets Supervision and Administration Commission of the State Council.

General Atlantic Invests $150 Million in Asian Healthcare

Hong Kong Asia Medical Corporation (“Asia Medical”) recently announced a strategic partnership with General Atlantic, a leading global investment firm, under which General Atlantic will invest $150 million in Asia Medical. Haoyue Capital served as the exclusive financial advisor.

BeautyUnited Secures 400 Million Yuan in Series C Funding from Sino-Ocean Capital

On September 18, the “Joint Ligge Group Series C Financing Round and Investment Signing Ceremony between Yuan Yang Capital and Joint Ligge” was held in Beijing. Mr. Li Bin, Founder and Chairman of Joint Ligge, and Mr. Lin Chuan, Deputy General Manager of Yuan Yang Capital, attended the event and signed the agreement. During the ceremony, Joint Ligge Group announced the completion of its RMB 400 million Series C financing, exclusively invested by Yuan Yang Capital, positioning itself as the leading entity-based medical enterprise in China’s medical aesthetics industry.

Amazon, MSD, and Accenture Partner to Build Cloud Platform

On September 17 (local time), Amazon, Merck & Co., and Accenture announced a collaborative initiative in New York. The three parties will jointly build a cloud-based information research platform aimed at helping life sciences companies improve efficiency in the early stages of drug research and development.

Breakthrough! Chinese-made sterile reagents for assisted reproduction pass FDA review, breaking the monopoly of products from Europe, the US, and Japan

After three years of effort, innovative enterprise VitaVitro (Shenzhen Weituo Biotechnology Co., Ltd.) announced on September 17 that it had recently obtained FDA clearance for its Human Embryo and Oocyte Cryopreservation/Thawing Kit, specifically the 510(k) Premarket Notification, thereby breaking the monopoly held by European and American products in the upstream segment of assisted reproductive technology.

Blue Sail Medical Changes Leadership, Joins Forces with Siemens to Target Cardiovascular Market

On September 14, Blue Sail Medical issued an announcement on the resolutions of its Board of Directors, approving the appointment of Li Bingrong as President of Blue Sail Medical, with a term coterminous with that of the current Board of Directors. Meanwhile, Sun Chuanzhi, the former General Manager of the company, has been appointed as Vice President and Chief Financial Officer (CFO). Prior to this, on September 4, Blue Sail Medical announced that the RMB 1.837 billion in raised funds designated for the acquisition of Biosensors International had been fully disbursed and completed.

Huami Technology Launches Smartwatch, Fitness Band, and Wearable AI Chip to Build a “Hardware + Software + Services” Health Ecosystem

September 17 News: Huami Technology held its 2018 new product launch event in Beijing, unveiling three major products at once: the AMAZFIT smartwatch, the AMAZFIT Health Band 1S, and Huangshan No. 1, the world’s first artificial intelligence chip for the wearable devices sector.

Medlinker and Beijing Jingdu Children's Hospital Enter Strategic Partnership to Co-establish the First Pediatric Internet Hospital

Recently, Medlinker, a leading provider of medical solutions in China, has entered into a strategic partnership with Beijing Jingdu Children's Hospital. The two parties will pool their advantageous resources to engage in in-depth collaboration across fields such as child health, medical care, rehabilitation, and telemedicine. Together, they aim to establish China’s first pediatric internet hospital, delivering integrated “Internet+” child health management services that fully combine online and offline diagnosis, treatment, and consultation, thereby providing diverse, multi-tiered healthcare access for children nationwide.

Qingdao Launches Its First Batch of “Prescription Sharing Platforms”; Qingdao Eye Hospital Partners with Yifuzhen to Establish the City’s First Prescription Sharing Pharmacy

On the morning of September 18, the Cloud Pharmacy at the outpatient department of the Northern Campus of Qingdao Eye Hospital was officially launched. This is the first prescription-sharing pharmacy established in Qingdao by the Yifuzhen third-party prescription sharing platform. As a national model for managing prescription outflow, Yifuzhen’s collaboration with Qingdao Eye Hospital marks the formal introduction of a standardized model for externalizing prescriptions in Qingdao. By leveraging the prescription-sharing platform, seamless connectivity and information sharing between hospitals and pharmacies will be achieved, thereby better serving patients.

Novartis and Tencent Join Forces to Create a Benchmark for Digital Healthcare Innovation

On September 18, Novartis Pharmaceuticals (China) and Tencent officially signed a strategic cooperation memorandum in Shanghai. Leveraging their respective resource advantages in the healthcare and internet sectors, the two parties will initially focus on cardiovascular disease, the leading health threat in China. Building on Tencent’s newly launched online drug scanning platform embedded within the WeChat social ecosystem, and utilizing innovative WeChat Mini Programs as the carrier, they aim to deliver a lightweight, systematic, and personalized medication management service model. Through this WeChat Mini Program, patients can access various services provided by Tencent, including drug traceability, comprehensive scientific education on related disease areas, and personalized health guidance and medication reminders via self-configured settings. This initiative is designed to enable more Chinese patients with cardiovascular diseases to sustainably benefit from innovative medicines.

The Era of Queues May Be “Ended” as the World’s First Hospital with Alipay Facial Recognition Payment Goes Live

Recently, VCBeat learned that Jiangxi Provincial People's Hospital, with a century-long history, has launched Alipay self-service checkout and facial recognition payment, making it the first hospital globally to support Alipay’s facial recognition payment. Since Alipay announced the commercialization of its facial recognition payment on August 15 this year, this once high-tech innovation, akin to “the swallows that used to fly only into the halls of nobility,” has now become an everyday convenience accessible to the general public.

This week, there were 8 financing events in China's medical sector.

The traditional healthcare sector has accumulated a vast amount of data. Unfortunately, much of this data is of low quality and unstructured. Privacy remains a significant challenge, as governments have enacted regulations to protect patient information by prohibiting its disclosure to third parties, such as other healthcare institutions and pharmaceutical companies.

Challenges in data collection and sharing have compelled some emerging healthcare companies to gather user feedback data by providing services, as exemplified by wearable device manufacturer Fitbit and personal genomics company 23andMe. Startups that possess high-quality data—and can leverage such data to establish a profitable business model—will hold a competitive advantage in the market and stand a greater chance of achieving higher valuations.

For the pharmaceutical industry, collecting high-quality, structured data has never been an issue. However, integrating biotechnology with data mining algorithms, artificial intelligence, prediction, and applications has become the core force enabling today’s startups to stand out.

With the widespread adoption of “precision drug administration” and advances in sequencing technology, we have reason to believe that big data will play a significant role in the development of new drugs and novel therapeutic approaches. (Source: VCBeat)

This May, Withings founder Eric Careil announced the reacquisition of the Withings brand from Nokia to continue expanding in the health monitoring market. On September 18, the new Steel HR Sport smartwatch under its proprietary brand was officially released at a price of $199.95. Key features of this watch include VO2 max monitoring, GPS positioning, and battery life lasting up to 25 days. Through the accompanying Health Mate app, users can view exercise-related information; the watch provides heart rate variability data, enabling monitoring of various metrics and exercise assessment.

Source: https://www.mobihealthnews.com

On September 18, Change Healthcare announced the establishment of a blockchain-enabled intelligent healthcare network built on Amazon Web Services (AWS) to help hospitals and insurers track claims and remittances, thereby reducing administrative costs. Leveraging blockchain technology, the network enhances the security and efficiency of financial transactions throughout the entire claims process. It currently covers nearly all government entities, more than 5,500 hospitals, 800,000 physicians, and 60,000 pharmacies, processing 12 billion medical transactions and $2 trillion in claims annually.

Source: https://www.healthcareitnews.com

Johns Hopkins University Applied Physics Laboratory Uses VR (Virtual Reality) to Help Amputees Adapt to Prosthetics. This technology can reset the nerves that control the arms and hands, using pattern recognition algorithms to identify contracting muscles, understand their connections, amplitude, and frequency, and translate this information into actual movements within the prosthetic limb. The laboratory has also customized a socket for patients that fits the residual limb, providing support for the prosthesis while connecting with the reset nerves to facilitate user control. (Source: https://www.mobihealthnews.com)

2017 was a pivotal year for advancing the Healthy China initiative and implementing the 13th Five-Year Plan, as well as the ninth year of the “New Healthcare Reform.” While China’s medical and health sector achieved certain accomplishments, it also faced numerous challenges amid the unique complexities of social transition. In June of that year, the National Health and Family Planning Commission released the Statistical Bulletin on the Development of China’s Health and Wellness Sector in 2017, which outlined the fundamental status of health resources, medical services, and primary healthcare in China. This report provides a comprehensive review of the development of China’s medical and health sector by integrating data from 2010 to 2016.

On August 30, 2018, the “2018 Guangdong-Hong Kong-Macao Greater Bay Area Life and Health Innovation Forum & Mid-Year Conference of the Gene Industry” concluded successfully in Qianhai, Shenzhen. Organized by GeneInsight, this premier industry event featured 14 insightful presentations and four panel discussions delivered by more than 30 senior experts from the fields of policy, scientific research, clinical practice, industry, and capital. Nearly 300 attendees participated in the conference and witnessed the inaugural launch of the key report, “Mid-2018 to 2019 Gene Industry Report.”