Youxun Medical Advances with Differentiated Gene Testing Portfolio Following Early NEEQ Listing and Regulatory Excellence

In July 2017, Youxun Medical secured RMB 170 million in Series A financing, setting the record for the largest funding round in its sector during the first half of the year. Investors included prominent strategic investment firms such as Shenzhen GTJA Capital, Xianfeng Qiyun, and CITIC Guoan. This marked Youxun Medical’s second round of financing; combined with the previous angel round, the company’s cumulative fundraising has exceeded RMB 200 million.

In the 2016 National Health and Family Planning Commission’s inaugural external quality assessment survey for ctDNA gene mutation testing, this company stood out from its peers with a perfect score, earning widespread acclaim in the industry.

Youxun Medical is a medical laboratory under Kexun Bio. Its founder and chairman, Wang Jianwei, was formerly the head of human resources at BGI Group and the co-founder and former CEO of Annoroad Gene Technology. Compared with most leading entrepreneurs in this industry, Wang Jianwei represents a rather unusual profile: he is neither a tech virtuoso nor a cross-industry operational powerhouse.

The seemingly “unique” nature of Wang Jianwei’s identity, in fact, provides a piece of corroborating evidence for the aforementioned argument to some extent. As Guan Yongtao, CTO of Youxun, stated, “She is better at leading generals than leading soldiers.”

Co-founder Ma Jinfeng was previously BGI Genomics’ largest partner in its reproductive health product line and one of the first market pioneers for non-invasive prenatal testing (NIPT) products in China.

Prior to entering the gene industry, Ma Jinfeng had already accumulated years of market experience and systemic resources in the pharmaceutical sector, and he was seeking a breakthrough to adapt to the new landscape for transformation and development. After leaving Annoroad Gene Technology, Wang Jianwei reached out to Ma Jinfeng with the aim of establishing a leading genetic testing company focused on clinical services, thereby driving the gene industry toward greater depth and substance.

After extensive discussions and communications with industry peers, Ma Jinfeng has gained a deeper understanding of the genetic testing industry. The future clinical impact of genetic testing services, particularly their potential for precision medicine, may be no less than—or even surpass—that of traditional industries in terms of both scale and sustainability.

This conclusion gradually became clear and definite in Ma Jinfeng’s mind, leading him to quickly reach an agreement with like-minded individuals who possessed similarly profound experience and resources, including Li Peixin, Zhu Dan, and Li Jin. Together, they co-founded Kexun Biology in 2014 and established Youxun Medical Laboratory in 2015.

The company’s CEO, Zhou Ye, holds a Ph.D. from the University of New Mexico in the United States. He conducted cancer-related research at City of Hope National Medical Center for over a decade and carried out extensive work on the clinical translation of precision oncology and liquid biopsy. His arrival has enabled the company to establish close ties with City of Hope and the USC Norris Comprehensive Cancer Center. The company’s CTC product was developed in collaboration with the University of Southern California, ensuring that its overall technology remains on par with international standards.

Dr. Yongtao Guan, Chief Technology Officer, is currently a Professor at Baylor College of Medicine in the United States. As a senior scientist in bioinformatics analysis and statistical genetics, he specializes in large-scale genomic data analysis based on Bayesian statistics, population variation of haplotypes, and association studies. Under his leadership, the Youxun bioinformatics team has developed globally leading statistical algorithms in both non-invasive prenatal testing (NIPT) and liquid biopsy.

Youxun Medical’s product portfolio is primarily focused on non-invasive prenatal testing (NIPT) and oncology. NIPT currently represents the most commercialized segment within genetic testing. As industry regulations become increasingly clear, more companies are entering the market, intensifying competition to a fever pitch. For companies that have already secured a certain market share, they will face a growing number of competitors.

In response, Ma Jinfeng shared his personal assessment in an interview with VCBeat. “The market is not yet fully developed; the coverage rate of traditional Down syndrome screening is approximately 50%, while that of NIPT is currently only 15%,” stated Ma Jinfeng.

He believes that while intensifying competition will define the future landscape, the market still offers ample room for growth and significant potential at the current stage. The key task for enterprises is to strengthen the development and expansion of the overall market system. He revealed to VCBeat that Youxun Medical will focus on launching a series of differentiated products in the next phase to gain a competitive edge in future market competition.

In addition to the Down syndrome screening products that are widely offered by most industry peers, Youxun Medical’s reproductive health portfolio also includes pre-conception tests for nutrient absorption and metabolic capacity, as well as postnatal screening for inherited metabolic disorders in newborns. Furthermore, within the non-invasive prenatal testing (NIPT) segment during pregnancy, Youxun Medical has expanded its offerings beyond the standard screening for chromosomes 18, 21, and 23 to include targeted tests for hereditary deafness and thalassemia.

In terms of technological innovation, the core bioinformatics algorithms constitute the core competitive strength of genetic testing companies. Under the leadership of Guan Yongtao, the bioinformatics team at Youxun Medical developed a statistical algorithm based on Bayesian theory and Hidden Markov Models.

This is a fully self-developed, innovative statistical algorithm for NIPT that effectively circumvents the clinical dilemma encountered with Z-score testing (the current mainstream statistical method in China), where results falling within the "gray zone" cannot be definitively interpreted. The related research findings and clinical analyses have been accepted for publication by Genetics in Medicine, a journal under the American College of Medical Genetics and Genomics (ACMG), and are scheduled to be published next month.

Ma Jinfeng stated that the company aims to build its market moat by achieving comprehensive coverage of its fertility testing product portfolio and implementing a differentiation strategy relative to competing products on the market.

Genetic testing originated in non-invasive prenatal testing, will rise with precision oncology, and reach its zenith in comprehensive whole-genome services for individuals.

At the time of its founding, Youxun Medical entered the market during the peak of public interest in non-invasive prenatal testing (NIPT). While deepening its expertise in NIPT service systems, the company also began to position itself for the next potential boom industry: precision oncology.

In 2014, while tumor-related products of other testing companies founded during the same period were still in their nascent stages, Youxun Medical embarked on a dual strategic layout in reproductive testing and tumor liquid biopsy upon its establishment.

In October 2015, the company completed the research, development, and incubation of its first personalized oncology testing product, “Youti,” and officially launched it as a commercial product. Subsequently, CTC products such as “Youxu” and “Youyi,” along with ctDNA products, were rolled out in succession.

In February 2016, Youxun Medical joined forces with the China Cancer Foundation to establish a special fund and launched a nationwide multicenter liquid biopsy project in collaboration with 16 top-tier cancer hospitals in China.

During the product development process for liquid biopsy in oncology, blood test results must be analyzed and compared with tissue biopsy results to validate the accuracy of the product. Typically, both tests are conducted by the liquid biopsy company itself. In this project, Beijing Youxun Medical Laboratory Co., Ltd. was responsible for blood testing in over 1,000 individuals, while 16 hospitals carried out the tissue biopsy testing. The two parties then performed comparative validation of the results.

In other words, this is a double-blind validation. Ma Jinfeng told VCBeat, “This is the first time in the industry.” The project is currently being fully advanced, and related research findings will be published and announced successively starting next year.

The ultimate goal of liquid biopsy for tumors is rooted in clinical practice, and product attributes should align with clinical needs. Throughout the entire R&D process—from project initiation to product maturation—the company has maintained close communication with clinical experts. By leveraging two world-leading research institutions, City of Hope and the University of Southern California, it has integrated mature international technologies with the actual clinical demands in China.

Ma Jinfeng told reporters that physicians develop a deeper and more comprehensive understanding of tumor testing products through hands-on clinical exposure. This is an iterative process, often involving repeated cycles, that ultimately leads to a refined consensus. He particularly emphasized that, based on Youxun’s insights, having more testing products is not necessarily better. Especially in the early stages of industrialization, ambiguous genetic loci can actually complicate clinicians’ diagnostic and therapeutic decision-making.

In the field of liquid biopsy for oncology, the company has established collaborations with over 200 hospitals. The company’s marketing team in the field of precision oncology comprises more than 80 professionals.

Ma Jinfeng believes that, compared with the maturity of NIPT, tumor liquid biopsy is still in its early stages. Although he has personally overseen the entire process from R&D to market launch, which may result in slower promotion, it ensures steady progress.

“This market is still in its incubation phase. We hope to navigate the market independently, which will allow us to communicate more accurately and promptly capture clinical needs and feedback,” he stated.

During the National Day holiday in 2017, the National Development and Reform Commission (NDRC) issued a statement declaring that the gene testing industry had become a significant driver of new momentum under China’s economic “new normal.” This development served as a major boost to Youxun Medical, a company operating within the gene industry.

It is understood that the company’s oncology division is preparing for the regulatory submission of its diagnostic kits. Following the completion of this round of financing, the company plans to conduct several major studies in the fields of oncology and fertility testing to build a pipeline for future product lines. In terms of business model, the company intends to submit approval applications for its kit products next year, marking a significant transition from a pure service-based model to an integrated “product + service” model. Regarding team building, the company will continue to expand and strengthen its channel team for the oncology market.

The company was officially listed on the New Third Board at the end of 2015. Ma Jinfeng revealed that the company plans to transition to an IPO around 2020.