[HealthyWay] VB Internet Healthcare Weekly Report 20150420

Events and Perspectives
Last week, news of collaborations, financing, and new product launches in the internet healthcare sector frequently made headlines.

First, following up on the news from two weeks ago,Baidu’s “Yao Zhida” (after a two-day delay, on April 14)At the 2nd 2015 E-Commerce (West Lake) Forum on the Big Health IndustryOfficial Debut, and announced that it will officially launch in May. It will establish Direct Connect accounts for pharmacy member enterprises free of charge to help improve their online service capabilities.

Alibaba, which had already established its O2O pharmaceutical presence ahead of others, was well-prepared.Tmall Health is directly integrated into Alibaba Health, Alibaba transferred the operating rights of Tmall’s online pharmaceutical business to Ali Health in exchange for newly issued shares and convertible bonds of Ali Health. The transaction is expected to be completed in the third quarter of 2015. Upon completion, Alibaba Group’s equity stake will increase from 38% to approximately 53% (rising to about 54.6% if all convertible bonds are fully converted). Henceforth, Ali Health and Tmall Pharmacy will enjoy an even closer partnership. As soon as the news broke, Ali Health’s stock surged by 80.83% at closing. Considering Alibaba’s earlier healthcare investments, it has effectively built a comprehensive pharmaceutical services empire. The prospect is so impressive that it is almost breathtaking.

The “Blue Giant” is also making frequent moves.IBM. First, toAcquisition of Two Medical Technology Companies: Explorys and Phytel. Next isPartnering with industry leaders such as Apple in the healthcare sector，Create the Watson Health Cloud Platform (Watson Health Cloud), providing data analytics services specifically for the healthcare industry. Reportedly, the Watson Health cloud platform plans to aggregate health data from various devices and service providers through its cloud computing infrastructure, delivering analytics services to companies such as Johnson & Johnson and Medtronic. These companies can then integrate the analytical insights into services marketed to healthcare organizations. Prior to this, IBM had already established a strong partnership with Apple in enterprise applications; this latest collaboration in healthcare data will undoubtedly further strengthen their relationship.

In contrast,Apple May Gain a New Competitor: Jawbone. BecauseJawbone Launches Its Own Online Store for Smart Devices, and there have been frequent developments recently. One isThe UP3 fitness tracker will finally be officially launched on April 20., however, due to a significant portion of the UP3 units failing waterproof testing during manufacturing, the waterproof depth will not meet the initially promised 10 meters. Additionally, Jawbone recently partnered with American Express,Payment functionality will be added to the next-generation Up4 wristband.. What makes outsiders most envious is its deep pockets! According to foreign media reports,Jawbone has completed a new round of financing worth $300 million., backed by investment from the giant Blackstone, with a valuation of $3 billion.

However, Apple is not afraid either; you manufacture, and I will handle the integration. Last week,Apple Announces Opening of ResearchKit Platform to All Medical Researchers, Physicians, Scientists, and App Developers, thus attracting an increasing number of smart wearable device companies to join in.

Another Tech GiantSamsungLast week was quite intense.Partnering with Partners HealthCare to Research Personalized Digital Diagnostics；Co-developing mobile health products in partnership with LinkedIn. According to VCBeat, LinkedIn will conduct clinical trials for new software in June, initially focusing on the co-development of chronic disease management software. The primary focus will be on remote monitoring of parameters such as blood pressure, blood glucose, and body weight, along with mobile interventions in the areas of patient management, medication adherence, and self-management of health.

Now, let’s talk about traditional pharmaceutical companies.

Last week, the actions of two major pharmaceutical giants also cannot be overlooked.

British pharmaceutical giant AstraZeneca (AZN) Launches Extensive, In-Depth Collaboration with PatientsLikeMe, the Largest Patient Social Network in the United States, signed a five-year collaboration agreement, gaining access to the latter’s global network. The initial focus areas of this partnership include respiratory diseases, lupus, diabetes, and oncology. AstraZeneca stated that it would leverage patient-reported data from PatientsLikeMe to shape future pharmaceutical research and development and improve patient health outcomes in key therapeutic areas. Notably, this is not the first time PatientsLikeMe has collaborated with a pharmaceutical company. Last April, PatientsLikeMe entered into a deep strategic partnership with Genentech, a subsidiary of the Swiss pharmaceutical giant Roche, granting Genentech access to PatientsLikeMe’s entire database for the next five years. This also marked the first large-scale, in-depth collaboration between a patient social network and a pharmaceutical company.

Generic drug giant Actavis partners with Medicines360, a nonprofit women's health pharmaceutical companyAnnouncement,Launch of the New Contraceptive Device Liletta in the United States

The final piece of news is,MDLive Successfully Partners with Skype, Acquired by Microsoft, will leverage Microsoft’s Skype for Business (i.e., the enterprise version of the Skype application) service to provide remote video-based medical services.

Additional rumor: Accelerated pharmacy M&A driven by U.S. healthcare reform,Walgreens Reportedly Interested in Acquiring Rite Aid, Walgreens’ M&A activities will enable it to cut $1.5 billion in operating costs. Moreover, Rite Aid operates more than 4,500 retail stores across 31 U.S. states; if this deal materializes, it would be a dream come true.

Healthcare Reform
Foreign investment will fully adopt the negative list management approach:The State Council Information Office held a regular policy briefing. Lian Weiliang, Deputy Director of the National Development and Reform Commission (NDRC), stated at the meeting that China will fully implement the new management measures based on the negative list for foreign investment this year. Online approval processes will be introduced, and approvals in sectors such as new energy vehicles, pharmaceuticals and medical devices, and new drug registration will be further liberalized. Meanwhile, comprehensive guiding opinions on state-owned enterprise reform are being expedited.

Receiving Red Envelopes Exceeding 5,000 Yuan: Revocation of Physician’s Practice License:The Health and Family Planning Commission of Shandong Province promulgated the “Shandong Province Discretionary Standards for Administrative Penalties in Health and Family Planning (Trial)” (hereinafter referred to as the “Standards”) to regulate the exercise of discretion in administrative penalties within the health and family planning sector. Under these Standards, medical practitioners who illegally accept property or gifts from patients valued at RMB 5,000 or more shall have their Physician Practice Certificates revoked. The Standards came into effect on May 15, 2015, and remained valid until May 14, 2017.

China Food and Drug Administration Releases 90 Industry Standards for Medical Devices:Announcement No. 8 of 2015 issued by the China Food and Drug Administration promulgated 90 medical device industry standards, including YY 0572-2015 “Water for Hemodialysis and Related Therapies,” comprising 14 mandatory standards and 76 voluntary standards, covering multiple fields such as surgical implants, medical electrical equipment, in vitro diagnostic reagents, and dentistry.

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Hot Terms in Internet Healthcare:Health IT/Personal Genomics

Data
By 2019, 60 million households in the United States will own a health tracker:According to the latest report from research firm Parks Associates, 60 million U.S. households will own at least one health tracker by 2019.

The medical device market size in the Asia-Pacific region soared to $15 billion in 2017:According to forecasts by the renowned market research firm Research and Markets, the global medical device market share is projected to reach $15 billion in 2017, a significant increase from approximately $2 billion in 2012. To meet the growing demand for medical devices in Asia, the Asian biomedical device market must achieve an annual growth rate exceeding 10%. The report also highlights that Japan’s market will be the second-largest globally, trailing only the United States.

Global Social Network Advertising Revenue Reaches $23.7 Billion This Year, with China Accounting for 14.4%:According to a report by market research firm eMarketer, global advertising spending on social networks will reach $23.7 billion in 2015, a 33.5% increase from the previous year. In 2017, global advertising revenue from social networks is projected to reach $36 billion, accounting for 16% of the total digital advertising share. Reportedly, the United States and China together account for more than half of this share. Specifically, U.S. social network advertising revenue is expected to reach $9.6 billion this year, representing a 31% year-over-year growth. China’s social network advertising revenue is projected to reach $3.4 billion this year, capturing 14.4% of the global share, and is expected to rise to $6.1 billion by 2017. At the company level, Facebook unsurprisingly remains firmly in first place, with its advertising revenue anticipated to reach $15.5 billion this year, accounting for 65.5% of global social network advertising revenue.

New Technologies
*Nature Cell Biology*: Israeli Researchers Achieve Heart Cell Regeneration
Israeli and Australian researchers have made progress in cardiac tissue repair and regeneration, achieving a significant breakthrough in the medical field that could be widely applied to the treatment of heart disease patients in the future. The research project, led by Gabriel Uwa from the Weizmann Institute of Science in Israel and completed with the assistance of the Victor Chang Cardiac Research Institute in Sydney, successfully stimulated the regrowth of cardiomyocytes in mice. The researchers found that they could induce cardiac regeneration by regulating neuregulin, a hormone in the cardiac signaling system, to stimulate cardiomyocyte division.

First “Human Satellite Navigation” Device Debuts in Germany: Electrodes Emit Signals to Guide Walking
Scientists at Leibniz University Hannover in Germany have developed the first “human satellite navigation” device, which uses electrodes attached to the legs to deliver stimulation signals that “tell” users in which direction to step.

Capital