The Life-or-Death Gateway of Precision Medicine: Integrating Diagnosis and Treatment

On July 5, the second installment of “China Healthcare Venture Capital Dialogues” arrived as scheduled. We invited Mr. Cai Daqing, Managing Director at Legend Capital, and Mr. Wang Hui, Managing and Founding Partner at Honghui Capital, to discuss precision medicine with our audience. By exploring their six incisive perspectives, can we catch a glimpse into the critical determinants of success and failure in the future of precision medicine?

Cai Daqing

Managing Director, Legend Capital

Mr. Cai Daqing oversees Legend Capital’s specialized healthcare fund. Over the past seven years, Legend Capital has invested in more than 40 healthcare companies, with total investments reaching up to USD 300 million. He previously served as a Director and Chief Financial Officer (CFO) at BGI Genomics, working alongside scientists and entrepreneurs who were among the earliest participants from China in the Human Genome Project.

Legend Capital'sCore business is positioned in early-stage venture capital and expansion-stage growth investment.Currently, Legend Capital manages US dollar and RMB funds with a total scale exceeding RMB 26 billion, focusing on innovation and growth opportunities in China.

Wang Hui

Founder of Honghui Capital

Two years ago, he founded Honghui Capital, which currently manages four funds with a total asset under management exceeding RMB 4 billion. In the VC and PE industries, he has executed more than 30 projects.

Honghui Capital's Investment FocusFocusing on healthcare services, mobile health, medical devices (including imaging equipment, diagnostic reagents, and medical consumables), and biopharmaceuticals (chemical drugs, biological drugs, and biologics).

Five years ago, before the term “precision medicine” had even emerged, Legend Capital took the lead in investing in Berry Genomics in the field of medical sequencing—a decision that was also tied to my own professional experience.

With the advancement of genomic science, President Obama proposed the Precision Medicine Initiative last year, and China subsequently launched its own national research plan for precision medicine, galvanizing researchers across the fields of biology and medicine.

China’s Precision Medicine Initiative shares many similarities with that of the United States, while also exhibiting certain differences. Both countries place significant emphasis on the practical implementation of big data analytics, cohort studies, and related initiatives.

Although "precision medicine" is a relatively new term, it essentially reflects the growing aspiration in medicine to more accurately grasp the underlying nature of certain diseases and, based on this understanding, identify corresponding, more precise therapeutic approaches, thereby forming a closed loop. From the perspective of integrating diagnostics and therapeutics, the future prospects of precision medicine are immense.

The future is bright, but the path ahead may not be smooth; precision medicine also faces its own bottlenecks. I believe the greatest bottleneck lies in our limited understanding of natural laws, particularly the biological principles governing medicine and the human body. Precision medicine is not merely a slogan or a new buzzword; it demands arduous exploration.

Many issues in medical science cannot be thoroughly resolved simply by pouring in vast amounts of money. Precision medicine has galvanized collective attention and pooled diverse resources to tackle some of these challenges, yet the laws of natural science do not always bend to human will.

Precision medicine holds significant potential for more accurately identifying health risk factors, improving population stratification, and enabling more effective and targeted subsequent treatments. This will bring about substantial changes to the health insurance industry, with very promising prospects.

Currently in China, the application of gene sequencing technology and commercial health insurance are both in relatively early stages of exploration. We look forward to seeing effective models of integration emerge.

How Does Precision Medicine Generate Revenue? In fact, certain drugs and even diagnostic technologies are becoming increasingly precise, reflecting a broader historical trend. Significant advances have been made both in terms of precision medicine technologies and subsequent treatment modalities, as well as from the perspective of health economics.

Regarding the challenges, fueled by capital enthusiasm, there is a prevailing sense of impetuousness across investment circles, industrial sectors, and consumer groups. Therefore, the ability to separate fact from fiction amidst the noise is also of critical importance.

However, both investors believe that talent is the key breakthrough point and major challenge for precision medicine in China. Especially in technology-driven fields, the importance of talent goes without saying.

Domestic startup teams and investment funds attach great importance to precision medicine, hoping to catch the next wave. However, at present, basic research that should ideally be funded by scientific foundations and government agencies is being undertaken by venture capital (VC) firms instead, a trend whose efficiency is open to question.

In the entire field of precision medicine, any seminar held is always packed with attendees. Many startup teams have emerged, commanding high valuations. In my view, a bubble has already formed.

In the first half of this year, more than 40 specialized pharmaceutical investment funds were established, but the market does not have sufficient capacity to absorb them.

How can we more calmly explore the path of precision medicine development in the future? These matters still require our joint discussion.

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