Cutting-edge technology and life sciences meet each other, and industrial policies and capital markets resonate at the same frequency, giving birth to local medical technology enterprises with innovation as the core driving force, and vigorous growth.
When artificial intelligence, intelligent manufacturing and other technologies are applied in the medical field, becoming a source of innovation, but also bringing clinical verification, interdisciplinary team management and other new topics; medicine has become an important part of the capital market, but the market has also experienced fluctuations, two and eight differentiation is significant; facing global competition and cooperation, wanting to overtake in curves, but also more than any previous era to test the founder's global vision, differentiation strategy, and whether the action is decisive.
Medical technology entrepreneurship is a real "brave game", and players must have enough innovation, product power and organizational strength to truly bring technology from the laboratory to the clinic and bring more health and well-being to people.
Recently, Gaorong Capital Ronghui, together with Industrial Securities and HUAWEI CLOUD, held a closed-door meeting of THE CEOs of medical enterprises, inviting Dr. Xu Jiaxi, managing director of Industrial Securities/ vice president of the research institute / chief researcher of the pharmaceutical industry, Zhang Zhenping, specially appointed management consultant / professor / former director of the project management department of Huawei, and the founder of Gao Rong's invested medical enterprises to "talk about the trend of medical technology innovation and upgrade the organization and management of the R&D team".
Here are some of the highlights of the closed-door meeting:
Breakthroughs in AI, manufacturing, and life sciences constitute the source of medical innovation
Gao Rong is firmly optimistic about the medical track, and in the past few years, it has continued to deploy in the fields of new drug research and development, medical devices and diagnosis, digital health and medical services.
Why is it firmly optimistic in the long run? On the demand side, we see a strong demand for medical care in the whole society. On the one hand, China is entering an aging society, and as residents' incomes and life expectancy increase, the demand for innovative medical tools, high-quality medicines and instruments, and quality medical services is increasing.
From a supply perspective, the next decade will continue to be a decade of continuous and accelerated medical innovation. Breakthroughs in artificial intelligence, intelligent manufacturing, and life sciences together constitute the source of medical innovation. At the convergence of these technologies, we will see the emergence of a group of innovation-driven medical technology companies. Today, there are also more and more experts engaged in computers, materials, and devices entering the medical field, and I personally like this combination of generation difference. When cutting-edge technology is applied in a new field, it can often generate huge energy.
The application of AI+ medical treatment has moved from partial to comprehensive. Among them, AI medical imaging has reached the clinical stage and is currently moving towards the commercialization stage; in the future, there will still be many single breakthroughs in the early discovery of AI pharmaceutical fields, protein structure prediction, surgical robots, the combination of AI and intelligent medical devices.
For the AI pharmaceutical track that is attracting much attention today, we believe that we need to look at it from the perspective of industrial closed-loop. The development logic of the pharmaceutical industry in the past hundred years shows that pharmaceutical companies started from Biotech, slowly grew into Biopharma, and finally grew into Big Pharma, during which there were often many integration mergers and acquisitions. Biotech is emerging, but established pharmaceutical companies continue to exist. Looking back at today's AI pharmaceuticals, we need to think about many deeper questions: Once it enters the clinical stage, what is the molecular effect? What are the systemic advantages of AI-screened molecules compared to those validated by chemists? In terms of organizational setup, is it to throw money at the clinic or on the AI computing power? And new drug research and development itself will have a certain failure rate, we recommend that AI pharmaceutical companies in the early stage of growth, as much financing as possible, multi-pipeline layout, more cooperation.
In terms of manufacturing + medical treatment, under the influence of changes in internal and external factors, innovation and import substitution are needed at the same time. The COVID-19 pandemic has triggered the reshaping of the global medical supply chain, and China needs to upgrade the medical industry chain/supply chain system, with core elements including key materials, processing technology, core reagents and consumables.
We also look forward to seeing more new materials, new technologies, new processes and medical treatments in China.
In terms of devices and IVDs, itself and manufacturing are a natural combination, of which materials, precision manufacturing, and processes are the core thresholds of innovation. Many times, medical device innovation comes from engineers rather than scientists, but from clever engineers and experienced clinicians working together to create products that meet market needs.
In terms of new drug research and development, the application of intelligent manufacturing technology will lead the manufacturing process of new drugs to be intelligent and unmanned; new materials will also play a role in promoting drug delivery and preparation.
Robots are used in medical treatment, in addition to clinical directions such as surgical robots, there will also be a wide range of space in upstream production and downstream medical services. And the robot of the future is not just a robotic arm, it will certainly have sensors and the ability to collect and feedback data.
The threshold for innovation is getting higher and higher, and differentiation, internationalization and industrialization are the way out
In the long run, the logic of medicine has not changed, including two strategic tracks - innovation and consumption upgrading. The core lies in pricing power, innovation is to use product power to do pricing power; consumption upgrading is to use brands to do pricing power.
Today, the threshold for innovation is getting higher and higher. In 2016, for the first time, there were pharmaceutical companies with an annual R&D expenditure of more than 1 billion yuan (China Biopharmaceuticals); in 2020, the annual investment of R&D expenses of China's leading pharmaceutical companies has reached or is close to the level of 1 billion US dollars (BeiGene, Hengrui Pharmaceutical).
From the perspective of the capital market, at present, A-shares and Hong Kong stocks are already large sectors; what is more noteworthy than the change in volume is the change in structure. Institutional investors have in fact given up investment in generic drugs and auxiliary drugs in the past 5 years, and innovative drugs, CXOs, innovative medical devices, Internet medical treatment, pharmaceutical consumer goods, etc. have become new outlets.
In the field of innovative drugs, in recent years, the number of Chinese enterprises declared and the number of approved innovative drugs have been significantly improved compared with before, with the help of the policy dividends of domestic drug administration review and approval in recent years and the capital market, the research and development types of domestic enterprises are moving from simple Me-too/Me-better to Fast-follow and even gradually pursue First-in-class.
In the new era, Biotech wants to stand out from the crowd, and has the following strategies:
Option 1: Do the top few of each target and do it faster
Option 2: Do Best-in-class or even First-in-class new drugs and don't be afraid of head-to-head comparisons
Option 3: Go to the non-tumor track to "try your luck", for example, for autoimmune diseases, osteoporosis, diabetes and other diseases that are not life or death but seriously affect the quality of life, do a good job of Specialty Pharma in these tracks
As innovative drugs enter a new era of internationalization, and the target competition is extremely fierce, it is increasingly testing whether innovative drug companies can have the following capabilities:
First of all, enterprises and their management should have an international vision and action. Internationalization is not only about entering the European and American markets, but also focusing on emerging markets.
Secondly, strong R & D capabilities and excellent product quality are the cornerstones of enterprises "going out".
Third, make adequate preparations for overseas clinical trials, including the selection of targets, indications, and competitive tracks. For different countries' drug regulatory regulations, patent systems, etc., it is necessary to consider strategically.
At the same time, it is also necessary to take advantage of the wind, continue to pay attention to domestic clinical trials, and give play to the "cost-effective" advantages of domestic research and development.
Finally, enterprises should learn to judge the hour and size up the situation, learn from each other's strong points and complement each other's weaknesses. At this stage, it is still difficult for Chinese enterprises to independently develop products and sell them overseas, and it is more appropriate to carry out a strategy of all-round international cooperation.
In terms of innovative devices, the game is still in the first half. The concentration of the industry is not high enough, the difficulty of collecting and collecting is greater than that of drugs, Fast-follow still has a lot to do, and leading enterprises have gradually emerged but have not yet dominated.
What kind of products are the easiest to collect? Large volume, standardization, fierce competition, low risk; in contrast, products that are not easy to collect include growth stage, non-standard, small number of producers / difficult and high-risk surgery of import substitution.
Looking at the future of devices from the history of drugs, the key lies in innovation, differentiation, industrialization and internationalization. Import substitution will remain the main theme of China's medical device development in the next decade, and this process needs to be accompanied by the innovation and upgrading of domestic self-owned technology. So, what is the next batch of import substitution?
Supply chain barriers – such as a variety of high-value consumables that are involved
Barriers to technological innovation – such as gene sequencers
Academic standard barriers – e.g. flow cytometry, endoscopic products
On the road of device innovation, we also have 5 "hurdles" to cross.
1) Who can balance organizational vitality with platform empowerment value? (Split vs Consolidation)
2) Who can be a Biopharm in the device? (There is innovation, but also the ability to industrialization)
3) Fluctuations in the capital market, which challenge the sustainable financing ability of innovative equipment companies.
4) Who can really solve the upstream "stuck neck" problem? (Materials, Equipment, IP)
5) Which devices can be truly internationalized?
How does Huawei "ignite the polytechnic man"? Organizational management and motivation of R&D teams
Huawei's organization is a process-oriented organization, and the characteristics of the organization are to use the process system to solve the problems of efficiency and power. The essence of Huawei's introduction of Western management is to replace the rule of man with the rule of law, essentially to throw personal power aside and solve problems with process rules. Organizationally, one is to appoint a de-hierarchical appointment, the appointment of ministers, directors, and representatives, these positions can not see the level of high or low; second, the management is regarded as a (management) profession, parallel to the technical profession, which means that "being an official" in Huawei is not the only way out.
For the organizational structure, Huawei will set up a project team for R&D and marketing front-line business to operate and manage, so the organization is flattened. The front-line business center is responsible for fighting the war, with the project team as the business unit to carry out "resource sales"; the original functional departments have become the competence center, and the shared service center is responsible for public services. As a result, Huawei's organization has undergone qualitative changes, and the original organs have changed from control-oriented to service-oriented, and everything revolves around front-line projects.
Each project team in the front line is an independent business unit, including project establishment, research and development, production, manufacturing, sales, delivery, finance, etc. Huawei's R&D organizational structure has shifted from technology-centric to product management-centric, achieving a complete marketization.
To do research and development, we need to think outside the thinking of research and development, and regard research and development as a product to invest. At the heart of Huawei's integrated product development (IPD) process is product investment based on market demand. Huawei's Product Development Team (PDT) is the basic unit responsible for product development and is invested by the Huawei Investment Review Committee.
In layman's terms, Huawei's PDT manager is a "contract foreman", and the PDT manager can be from research and development, or from the market or other businesses, he is not only responsible for this product development, but also responsible for the product supply chain, procurement, manufacturing, production, sales, and delivery, and the assessment is the product success rate. In this way, the success of the product is not only technically realized, but also a simultaneous improvement in marketability, serviceability and manufacturability. This also subverts our definition of products, in addition to technological breakthroughs can bring new products, procurement, service, manufacturing can be productized, and jointly create product revenue.
Dialogue: What new possibilities will be brought about by the accelerated integration of BT+IT?
Westlake Omey is committed to solving various problems of life and health through AI-enabled proteome big data, including disease diagnosis and AI pharmaceuticals.
Protein is one of the most core molecules in the life sciences, and the best way to detect and efficiently measure proteins is mass spectrometry. Westlake Omega has a unique technology that can analyze proteomes of extremely small amounts of tissue at a lower cost. As proteome data accumulates, we need new algorithms to interpret it, and the union of BT and IT is inevitable.
In the future, we will continue to accumulate proteome dynamic data in the microscopic world to provide new dimensions for the various needs of life and health. Our vision and positioning is that of a big data company in the microscopic world.
I first studied in Tsinghua Yao class, and then went to MIT to study for a Doctorate, and I have always had an IT background. From the perspective of industrial demand, new technological breakthroughs are urgently needed in the field of drug research and development today to solve the problems of low success rate of research and development, expensive research and development, and low return on investment; from the technical side, AI technology has flourished in recent years and has gradually been applied in the fields of chemistry, chemical industry, biology and so on.
Xingyao Technology is committed to using AI technology to empower the research and development of small molecule drugs. After the early target confirmation, the entire process from drug design, screening, optimization, synthesis, and detection can be accelerated by artificial intelligence to assist scientists to make the original work more accurate, faster and less costly.
West Lake Yungu Zhiyao hopes to combine AI and BT to apply to the field of gene editing therapy. Although gene editing therapy has been listened to for a long time, in fact, there is no gene editing therapy in the world that is really on the market. There are also many basic technical accumulations that need to be completed, and there are some challenges to be overcome.
For many aspects of the process of gene editing therapy, AI can help accelerate in it, which is our very firm belief. At the same time, we have accumulated some high-quality data and built models based on it. Hopefully, we can be one of the fastest and best teams in gene editing therapy.
Based on the big data and artificial intelligence technology accumulated by HUAWEI CLOUD, we hope to provide more basic capabilities for the segmentation of the medical and health field, and we have carried out some exploratory work in omics, drug research and development, and clinical.
At present, in the field of AI pharmaceuticals, the industry has begun to pay attention to several common issues: that is, whether the molecule can be verified; whether it can really solve the actual problem and make the molecular results really reliable and effective; and the demand for security compliance and privacy.
BT+IT integration, data is a very critical element, we believe that data needs to establish standards, have sufficient data volume, timing, can be traded, is the more valuable data.