HealthyWay Inc. Files IPO Prospectus Following Strategic Investment from Baidu

Events and Perspectives

In an era of rapid technological advancement, the strong momentum of mobile internet has significantly propelled the healthcare sector. In 2014, this drive sparked a fierce competition among numerous players in the industry, and 2015 appears poised to continue this intense rivalry with even greater determination. Let us now take a look at the key developments within the digital health community during the Spring Festival holiday.

First,Baidu, following its collaboration with the 301 Hospital and the launch of the Baidu Doctor App, recentlyCompleted strategic investment in the healthcare website “Health Road” (Yihu.com), within just one month, it completed its online and offline layout in the medical field.

Next isKangmei Pharmaceutical’s E-Commerce Transformation Journey: “Virtual Pharmacy”, in simple terms, patients can go home directly after their hospital visit without waiting to pick up their medications. Additionally, according to VCBeat, Kangmei Pharmaceutical will pioneer the launch of a “virtual pharmacy” in Guangzhou this April, offering highly efficient delivery services. During the pilot phase, Kangmei Pharmaceutical will waive all delivery fees. This model will subsequently be rolled out at traditional Chinese medicine hospitals in Shenzhen, Beijing, and other cities.

During the holidays, capital markets and corporate leaders remained active, showing strong favor for the maternal and infant e-commerce sector. Following Beibei.com, which had been established for nine months, securing $100 million in venture capital funding this January, a domestic aquaculture companyDahu Shareholdinghas also entered this field. The company plans to jointly invest a total of RMB 40 million with Shanghai Chunbo Qiushou Equity Investment Fund,Capital increase in Beijing Qinqin Baobei.

In addition to their foray into the aquaculture sector, players in the automotive exterior equipment industry and financial giants are also making significant moves.

First, it is a well-established enterprise in the automotive exterior trim equipment industry.Moulding TechnologyLast week's announcement stated that it is proposed toEstablished a wholly-owned subsidiary, Wuxi Mingze Medical Investment Management Co., Ltd., in Wuxi City, Jiangsu Province, with RMB 20 million in self-owned funds.The company’s business scope primarily includes: investment in healthcare projects; management consulting; corporate investment and asset management; entrusted hospital management; medical technology development; network technology development; research and development in the field of biotechnology; health and wellness management consulting; investment and operation in the healthcare industry and related sectors (including healthcare services and medical education); and sales, technology development, technology transfer, technical consulting, and technical services for medical devices and within their related fields.

Second, financial giants such as commercial banks have also entered the fray!UnionPay’s “Modern Hospital” Integrated Payment Service Was First Launched at Zhongshan Hospital, Fudan University in Shanghai.It is understood that this is not the first instance of bank-hospital collaboration in recent years, as many banks have long set their sights on the healthcare sector. For example, Bank of China launched “Yi Da Tong.”

The sector is booming and bustling, but a word of caution is warranted: if your product lacks clear scientific evidence, you must exercise caution in its promotion and marketing. Recently, the U.S. Federal Trade Commission (FTC) issued an administrative order imposing monetary penalties on two mobile health apps for early melanoma detection—MelApp and MoleDetective—because the health and diagnostic claims made by their developers and marketers were not supported by robust scientific evidence. To borrow a phrase from Jackie Chan: “Duang~ Duang~” Hair enhanced with “special effects” is no longer real hair.

During the Spring Festival holiday in China, tech giants Apple and Google each faced somewhat negative news, starting withGoogle Announces Shutdown of Helpouts Online Q&A Platform, then Apple stated that the upcomingApple Watch No Longer Equipped with Health Monitoring Module. For details, VCBeat has published a report; you are welcome to review it.

Healthcare Reform

Shanghai to Adjust Medical Service Prices Again This Year:The Shanghai Municipal Development and Reform Commission released the "Key Points for Deepening the Reform of the Medical and Health Care System in Shanghai in 2015." Notably, Shanghai will prioritize the improvement of the compensation system for medical personnel and the adjustment of medical service prices as key, specialized reform measures.

NDRC Eases Restrictions on Telemedicine:Notice of the General Office of the National Development and Reform Commission and the General Office of the National Health and Family Planning Commission on Approving the Pilot Work of Telemedicine Policies in Five Provinces and Autonomous Regions Including Ningxia and YunnanThe Notice approves the pilot work of telemedicine policies to be carried out through cooperation between the Ningxia Hui Autonomous Region, Guizhou Province, and the Tibet Autonomous Region with the Chinese People's Liberation Army General Hospital; between the Inner Mongolia Autonomous Region and Peking Union Medical College Hospital; and between Yunnan Province and China-Japan Friendship Hospital.

Shanghai’s 2015 Healthcare Reform “Strong Medicine” List: Exploring Combined Contracting Between Residents and Medical InstitutionsThe Shanghai Municipal Development and Reform Commission released the "Key Points for Deepening the Reform of the Medical and Health System in Shanghai in 2015": This year, it will coordinate and advance five key reforms and deeply implement 13 special reforms: promote the construction of a tiered diagnosis and treatment system, and explore resident contracting with "1+1+1" medical institution combinations (one family doctor from a community health service center, one district-level hospital, and one municipal-level hospital); advance the reform of separating medical services from pharmaceutical sales, and pilot the group purchasing model for drugs in four new suburban hospitals and districts/counties with mature conditions.

Ten Ministries Jointly Issue Document Encouraging Private Capital to Participate in the Development of the Elderly Care Service Industry:Ten ministries and commissions, including the Ministry of Civil Affairs, the National Development and Reform Commission, and the Ministry of Education, jointly issued the Implementation Opinions on Encouraging Private Capital to Participate in the Development of the Elderly Care Service Industry (hereinafter referred to as the “Opinions”). The Opinions propose specific measures to “encourage private capital to participate in home- and community-based elderly care services, institutional elderly care services, and the development of the elderly care industry,” and set forth relevant regulations and policy incentives regarding the promotion of integrated medical and elderly care, improvement of investment and financing policies, implementation of tax and fee preferential policies, strengthening talent support, and ensuring land use requirements.

Online Sales of Medical Devices to Break the Ice:Chen Hongyan, Secretary-General of the Medical Device Branch of the China Pharmaceutical Material Association, revealed that the National Medical Products Administration will permit medical device companies to operate specialized online stores this year. Upon obtaining an internet-based medical device operation license, these enterprises may commence online business operations. Previously, medical devices were only allowed to be traded through online pharmacies, and specialized online stores for medical devices were not permitted.

Three Ministries Issue National Plan to Promote the Development of the 3D Printing Industry:The Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Finance jointly formulated the “National Plan for Promoting the Development of the Additive Manufacturing Industry (2015–2016).” According to the objectives set forth in the Plan, by 2016, a relatively complete additive manufacturing (also known as “3D printing”) industrial system will be initially established; overall technological capabilities will remain on par with international standards; advanced direct manufacturing applications in sectors such as aerospace will reach internationally leading levels; and a substantial share of the global market will be secured.

The National Health and Family Planning Commission to Revise the "Law on Licensed Physicians":The General Office of the National Health and Family Planning Commission issued the “Circular on the Supervision and Inspection of the Implementation of Laws and Regulations Including the Law on Licensed Physicians” (hereinafter referred to as the “Circular”), which highlighted problems encountered in the implementation of the Law on Licensed Physicians, the Regulations on the Administration of Medical Institutions, the Regulations on the Handling of Medical Accidents, the Regulations on the Administration of Rural Doctors’ Practice, and the Regulations on School Hygiene Work (collectively referred to as the “One Law and Four Regulations”). The Circular first acknowledged deficiencies in the supervision and inspection work, such as insufficient awareness of its importance and inadequate attention paid by some local authorities, who merely acted as intermediaries without formulating specific and feasible implementation plans tailored to local conditions or organizing careful deployment.

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Data

Tencent In-Depth Report: Online Healthcare Penetration Rate at 14.5%Tencent recently conducted an in-depth market analysis of internet healthcare from four perspectives. The report found that the penetration rate of online healthcare stands at 14.5%. While the adoption of online healthcare products in second- and third-tier cities is slightly lower than in first-tier cities, both segments remain in the early stages of development overall. The per-capita consumption potential for online healthcare is RMB 500, with little disparity in annual per-capita healthcare expenditure between second- and third-tier cities and first-tier cities. The satisfaction rate for online healthcare services is 10.5%, indicating that user satisfaction in both first-tier and second-/third-tier cities is not optimistic. Over 30% of users reported dissatisfaction, while only 10% expressed high satisfaction. Offline resources account for 30.9% of online healthcare offerings, and medical institutions in second- and third-tier cities demonstrate significantly lower support for online healthcare compared to those in first-tier cities.

In 2014, the healthcare sector led in both the number of U.S. initial public offerings (IPOs) and annual return on investment:Recently, PwC released its 2014 U.S. Capital Markets Review Report. Over the past three years, the healthcare sector has led all other industries in the growth of IPO activity, with the number of deals rising from 14 in 2012 to 54 in 2013, and further to 115 in 2014, making it the sector with the highest number of IPOs. The compound annual growth rate exceeded 180%. Compared with other industries, healthcare companies demonstrated stronger post-IPO performance in 2014; notably, their year-end return rate surpassed all other sectors by 30%, while the first-day return rate stood at 13%.

China to Become the World's Largest Retail Market in 2018:PwC released a report forecasting that retail sales volume in the Asia-Pacific region will grow by 4.6% this year, and that China will become the world’s largest retail market by 2018.

Global smartphone users expected to reach 2.5 billion in 2015, accounting for 35% of the total population:Strategy Analytics predicts that by the end of 2015, the number of global smartphone users will reach 2.5 billion, accounting for 35% of the world's population. Strategy Analytics defines a "user" as an individual who owns and uses one or more activated smartphones.

New Technologies

The Artificial Kidney: The Invention of Wearable Dialysis Devices
Xcorporeal Inc., a U.S.-based company, has developed a wearable artificial kidney that offers significant convenience to dialysis patients, such as reducing the time they need to remain seated. This novel therapeutic device is currently undergoing Phase I clinical trials in the United States, while human clinical trials in Italy and London have already been successfully completed.

Alzheimer's Disease, Parkinson's Disease, and Other Conditions Can Be Diagnosed Early via Skin Tests
According to a study presented at the 67th Annual Meeting of the American Academy of Neurology, scientists from the Central Hospital of San Luis Potosí in Mexico have found that skin tests may help reveal Alzheimer’s disease and Parkinson’s disease at an earlier stage. New research indicates that skin biopsies can be used to detect elevated levels of certain abnormal proteins associated with these two conditions.

Microscopic Robots Injected into the Body to Combat Diseases
Brad Nelson, a mechanical engineer at ETH Zurich, is leading a team to develop ultra-microscopic robots that can be guided by externally generated magnetic fields. These robots are injected in swarms into patients’ bodies to perform ultra-precise drug “delivery” or act as surgeons, conducting operations inside the body.

Smart Pants with Built-In Artificial Muscles Can Help Patients Regain Walking Ability
A UK robotics team has recently developed a special pair of “pants.” These smart trousers are equipped with artificial muscles, enabling users to leverage “biomimetic muscular power” to assist with standing, climbing stairs, and even walking steadily.

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