#FMCG Eight Talks##Consumption##IVF##Health##Infertility#"Once IVF fails, you have to start all over again, from re-taking medicine to injections, a cycle can easily cost tens of thousands. A woman told a reporter from Beijing Business Daily. Before the "door" of medical insurance is opened to assisted reproductive technology, there have always been calls for higher IVF costs.
This can be seen from the prospectus of Aviaf, which submitted its listing application a few days ago. Aviaf currently has a total of 4 operating entities. In 2022, the average fees for each IVF (egg retrieval cycle) of these four hospitals were 58,800 yuan, 67,000 yuan, 71,200 yuan and 52,200 yuan, respectively, with an average fee of 62,300 yuan.
An IVF cycle is the cycle that begins with the retrieval of eggs contained in the ovarian follicles, after which the egg retrieval cycle generally progresses to the union of the egg with sperm to produce an embryo. However, not every IVF cycle guarantees success. For many infertile couples, the IVF live birth rate is a more intuitive indicator. In 2022, the IVF cycle success rate was 58.2% on average across IVF hospitals. According to the calculation that each patient needs to go through 2-3 cycles, its customer unit price exceeds 120,000 yuan.
Having a baby is easy for some people, but hard for others. Aviaf disclosed in the prospectus that infertility refers to a reproductive system disease in which couples of childbearing age have normal sex without contraception for at least 12 months and fail to achieve pregnancy. The causes of female infertility include fallopian tube factors, ovulation disorders, reduced ovarian reserve, etc. Causes of male infertility include low sperm production, abnormal sperm function, and obstructed sperm delivery.
As one of the methods of treating infertility, "IVF" is commonly known as "in vitro fertilization-embryo transfer", which is the technology of removing the sperm and eggs of infertile couples from in vitro, fertilizing and developing into embryos in the external culture system, and then transferring embryos into the uterine cavity to achieve pregnancy, which is the core technology of assisted reproduction.
Evie is one such business. Aviaf's business model is focused on providing ART (Assisted Reproductive Technology) treatment to patients. ART is effective in treating infertility patients compared to the other two methods (medical treatment and surgical treatment), and ART treatment consists of two major solutions: artificial insemination (AI) using artificial insemination (AIH) or donor sperm (AID), in vitro fertilization and embryo transfer (IVF-ET), where fertilization is achieved through conventional IVF or intracytoplasmic sperm injection (ICSI), and preimplantation genetic testing (PGT), which screens embryos for genetic diseases.
Since its establishment in 2006, Avieve has provided comprehensive diagnostic, fertility and complementary treatment services to its patients through its four franchised hospitals – Zhanjiang Jiuhe Hospital in Guangdong Province, Tianjin Avi Hospital in Tianjin, Jieyang Avi Hospital in Guangdong Province and Avi Ave Hospital in Kunming, Yunnan Province, all of which are capable of performing AIH, routine IVF and ICSI.
In the past few years, the prevalence of infertile couples has increased. The number of infertile couples in China increased from 55.4 million in 2018 to 56.7 million in 2022 and is expected to increase to 64.8 million in 2030, Aviave said in the prospectus.
Zhang Wenbo, a senior partner at Beijing Jundu Law Firm and director of the life sciences and health care legal department, believes that through the listing, Avieve can raise funds for further customer acquisition and open up brand influence.
According to industry insiders, there are many unsuccessful implants in IVF, such as the embryo successfully implanted, but it didn't take long for it to suddenly be an empty sac, or it was a healthy embryo when it was transferred, but it did not "sprout" after being transferred to the mother, or the fetus suddenly stopped after a period of time, and there are many of these cases.
Judging from the prospectus, in 2022, the success rates of IVF cycles in Zhanjiang Jiuhe Hospital in Guangdong Province, Tianjin Aiwei Hospital in Tianjin, Jieyang Aiwei Hospital in Guangdong Province and Kunming Aiwe Hospital in Yunnan Province will be 55.7%, 55.2%, 65.3% and 56.6% respectively, with an average success rate of 58.2%.
According to the CEO of a private hospital, the cost of one cycle of artificial insemination is about 35,000-85,000 yuan, and most couples need to do four or five cycles of in vitro fertilization, with a success rate of about 30% for each cycle. According to the calculation that each patient needs to go through 2-3 cycles, the unit price of Aviaf exceeds 120,000 yuan.
The high unit price has supported Aviave's performance, and the company is now profitable. The services provided by AVIE to patients are divided into four categories: initial consultation and pre-treatment services, AI or IVF-ET treatment services, post-pregnancy services, and drug sales. Among them, AI mainly includes follicle monitoring, semen processing and artificial insemination, and IVF-ET mainly includes ovulation induction, egg retrieval and fertilization, as well as embryo development and transfer, involving various medical and surgical procedures related to assisted reproduction. In 2022, Aviaf achieved revenue of 407 million yuan, net profit of 64.5 million yuan, and gross profit margin of 43.3%.
According to the prospectus, as of the first half of 2023, Avieve has treated more than 90,000 patients, performed more than 57,000 IVF cycles, completed more than 67,000 embryo transfers (including fresh embryo transfer and frozen embryo transfer), and witnessed the birth of more than 33,000 IVF babies. According to the Frost & Sullivan report, in 2022, Aviaf ranked fourth among China's private assisted reproductive technology service providers in terms of IVF cycles performed, with a total of 6,706 IVF cycles, accounting for 0.9% of the total in China in the same year.
The barriers to entry into the ART and ancillary services market are high, and licenses are a scarce resource. As of the end of 2022, there are only 559 medical institutions in China with a Generation (Routine IVF) license, which is equivalent to an average of only 16 medical institutions in each province that can provide IVF surgery for patients. More than ninety percent of these licenses are in the hands of public medical institutions.
After more than 30 years of development, domestic ART has become quite mature. Artificial insemination (IUI), in vitro fertilization-embryo transfer (IVF-ET, the first generation of IVF), intracytoplasmic sperm microinjection (ICSI, the second generation of IVF) and preimplantation genetic screening and diagnosis (PGS, PGD, the third generation of IVF) and other commonly used assisted reproductive technologies have been widely used.
At present, Aviaf already holds the first and second generation IVF licenses, and one of the purposes of its IPO is to obtain the qualification of a tertiary specialist hospital for its Zhanjiang Jiuhe Hospital, so as to obtain the third generation (PGT) license.
In June this year, the Beijing Municipal Medical Insurance Bureau issued a notice that since July 1, 16 therapeutic assisted reproductive technology projects such as ovulation induction examination and sperm optimization treatment will be included in the reimbursement scope of the city's basic medical insurance. The 16 assisted reproductive technology projects included in Beijing's medical insurance include first, second and third generation technologies. Some industry insiders have predicted that medical insurance may cover about half of the cost of a cycle of IVF.
"We mainly compete with public and private hospitals that provide ART and ancillary services in China," Avieve said in the prospectus. In an interview with a reporter from Beijing Business Daily, senior medical investor Lin said that in the future, the competition for assisted reproduction will tend to be hot, from grabbing licenses to grabbing expert teams, and from expert teams to grabbing operation teams. Not only is it still difficult to obtain a license for assisted reproduction, but it is also becoming more and more difficult to obtain customers, and it is even more difficult to form a replicable customer acquisition model. Although the assisted reproduction market is large, the doorway is extremely narrow.
"The inclusion of assisted reproduction in medical insurance makes the head effect more significant, and further strengthens the advantages of reproductive centers in public hospitals. Shopkeeper Lin said.
Beijing Business Daily reporter |
Image source: Aviaf's official website
Edited by Topol