Pinnacles

Interview with Chairman Ding Wei of Pinnacles Medical

Unconventional, breaking through in the "volume", creating a new generation of IVD platform companies | "CHC Medical Media" interviewed Mr. Ding Wei, the founder of Pinnacles Medical

 

With the recurrence of the new crown epidemic, the national epidemic prevention situation is once again severe. On March 11, the Comprehensive Team of the State Council’s Joint Prevention and Control Mechanism for Novel Coronavirus Pneumonia issued the "New Coronavirus Antigen Detection Application Plan (Trial)", deciding to add antigen detection as a supplement to the new coronavirus nucleic acid. Subsequently, as of March 21, the State Food and Drug Administration has successively approved the registration applications for the new crown antigen detection products of 17 companies.

Under the catalysis of this background, the IVD track has once again become the focus. It can be said that China's IVD industry is showing prosperity. In the long run, it is due to the dual effects of technological progress and market demand, while in the short term it is due to the catalysis of the epidemic.

According to statistics, there will be a total of 120 domestic IVD track-related financing events in 2021, with a financing amount of about 13.855 billion yuan. In 2019 before the epidemic, there were only 72 related financing incidents, with an amount of about 3.315 billion yuan.

With the help of capital, the development of the IVD industry has risen, and the track has been further subdivided. Subdivided tracks such as molecular diagnosis, POCT, and upstream raw materials have been favored by capital. So, where will the next outlet of IVD appear? Is it a new technology or a new application? Mr. Ding Wei, a senior IVD expert and founder of Pinnacles Medical, gave a unique idea.

Ding Wei studied at Fudan University as an undergraduate. He studied in the United States and obtained a master's degree in biology and an MBA degree. He is one of the inventors of BRCA, a molecular diagnostic product for cancer in the United States. BioMérieux, one of the IVD companies, served as the global vice president and president of Asia Pacific. At the end of 2016, he joined Kehua Biotech, a listed domestic in vitro diagnostic company, as the president. He is a senior expert in the global in vitro diagnostic industry. More than ten years of management experience in multinational companies and Chinese A-share companies. In 2020, Ding Wei founded Pinnacles Medical in Shanghai, and is committed to building a new generation of in-vitro diagnostic companies with smart testing and in-vitro diagnostics.

A few days ago, Mr. Ding Wei confirmed to attend the "2022 CHC CITIC Securities Medical and Health Conference and the 11th China Medical and Health Industry Investment and M&A CEO Summit" held in Shanghai from April 12th to 13th, and participated in the "Medical Devices and In Vitro Diagnostics "Special Session" will chat with several industry leaders about "Rebalancing the Value of the IVD Industry Chain in the Post-epidemic Era". At the same time, CHC Medical Media also had the honor to talk to Mr. Ding Wei before the summit to discuss the development prospects and innovation paths of China's IVD industry.

 

 

IVD track, from "Spring and Autumn" to "Warring States"

 

How do you view the current development status of China's IVD industry? Mr. Ding Wei's answer is, "China's IVD track is on the eve of the transition from 'Spring and Autumn' to 'Warring States'."

The Eastern Zhou Dynasty in Chinese history was divided into two periods, the Spring and Autumn Period and the Warring States Period, due to the different situations in which the feudal vassals dominated. During the Spring and Autumn Period, there were more than one hundred vassal states, large and small, at the peak, but in the Warring States Period, after a series of annexation wars, only the so-called Qixiong remained.

At present, there are about 1,500-2,000 IVD product R&D and production companies in my country, plus related channels and trading companies, the number of IVD companies is as high as tens of thousands. "This volume is astonishing. Except for China, there may not be such a number of IVD companies all over the world." Mr. Ding Wei believes that the number of IVD companies in my country will be greatly reduced in the future. Of course, this does not mean that the industry will Downward, but the upgrading of the industrial ecology from quantity to quality, from extensive to intensive. "In my opinion, IVD is still a sunrise industry, and there will be a relatively large growth rate in the future, and in this process, domestic companies will gain more opportunities."

At present, in addition to the new crown products, the share of domestic enterprises in my country's IVD market only accounts for 40-45%, and they are mainly concentrated in primary hospitals at or below the second level. The larger and better market share is still in the hands of multinational companies. However, with the advancement of the national accurate medical strategy, as an indispensable part of accurate medical treatment, the IVD industry will gain more market vitality. At the same time, with the continuous advancement of medical insurance fee control, domestic innovative companies that are closer to the market and have lighter assets will have the opportunity to overtake on corners.

"With the continuous breakthrough of technical barriers, domestic enterprises will occupy more than 70% of my country's IVD market in the near future. But at the same time, we must also understand that domestic enterprises have great opportunities, which does not mean that every domestic enterprise has such Opportunities.” Mr. Ding Wei believes that with the maturity of the market and industry development, it is very likely that 80% of the business will be concentrated in the hands of 8-10 leading companies in the future, and the average sales volume of these leading companies may reach 7. Eight billion, or even more than 10 billion sales. Moreover, the companies that stand out must be "hexagonal fighters", that is, they are excellent in products, technology, channels, capital, expert resources, talents, etc., and they are companies with both scale and characteristics.

It is precisely because of this trend that Mr. Ding Wei chose to start again in 2020, gathering a group of outstanding talents in the IVD industry to start their own businesses, aiming to create a new generation of leading IVD companies.

 

 

Focus on intelligent inspection and build a platform-based IVD company

 

It is necessary to look up at the starry sky, but also to walk steadily and far. Since it has aimed at becoming a platform company in the future from the beginning of its business, Pinnacles Medical is destined to take a different development path.

At present, the development path of most domestic medical enterprises is "characteristics first, then scale", while the path set by Mr. Ding Wei for Pinnacles Medical is "features + scale" to advance simultaneously. Therefore, the track for the company to enter must be the IVD subdivision field that has enough room for innovation and can quickly form a scale.

"In the past 10 years, a large number of domestic hospital laboratories and laboratories have been building assembly lines. Starting from the pre-processing link, a certain degree of automatic detection has been realized through assembly line equipment. What is the upgraded version of the assembly line? What can we do?" Pinnacles The development orientation of the first stage of medical treatment is thus determined: focus on wisdom inspection.

What is Wisdom Test? The definition of Pinnacles medical care is more pragmatic, that is, all-round automation, unified information management, and clinical decision-making assistance. And this is exactly the path for Pinnacles Medical to enter the wisdom test.

The first point is to achieve full automation. Many masters and doctors in the current laboratory department are still busy with the daily work of the laboratory. How to spend their limited time on more result analysis and clinical communication? The inspection department equipped with assembly lines has greatly improved the automation of inspection. But from sampling to specimen sorting, transportation, on-line, and specimen preservation, retesting and management at the back end of the assembly line, how to improve these blank areas of automation? In addition, the smart assembly line should not be limited to tertiary hospitals. How to promote cost-effective solutions to more customers? The goal of Pinnacles is to build a brand new "unattended laboratory", but the first step is to provide high-performance, low-cost smart inspection solutions.

The second point is to realize the unified management of informatization. The degree of informatization of mainstream laboratory departments is not low. However, this information is usually fragmented, and information between different devices and systems often requires human integration and intervention. Is it possible to have a new system that collects, integrates, and manages these fragmented information to provide managers with more integrated information? The smart screen developed by Pinnacles also emerged in response to the situation.

The third point is clinical decision-making assistance. Now the laboratory provides the test results and prompts whether it is within the normal range. But science is changing with each passing day, and new markers are emerging one after another. Can the laboratory department provide high value-added services to clinics by integrating and interpreting relevant information and multi-marker trend analysis while providing results?

For these three aspects of intelligent testing, Pinnacles Medical has a layout in reagents, instruments, consumables, information systems, etc., especially focusing on laboratory robotics products, and has already launched a variety of them, giving people a refreshing feeling. Of course, Pinnacles Medical’s ambition is even greater. Their goal is to “provide a complete solution for future medical testing needs” and “create an efficient and intelligent laboratory”. Therefore, they position themselves as "platform" enterprises, integrate resources by building platforms, and practice their own innovation path.

The reason why they dare to take such a different road of IVD enterprise development is because they use a killer trick - the BBC model.

 

 

"BBC" mode, efficient resource integration

 

The BBC (Build-Buy-Collaborate) model is a kind of productization and commercialization that realizes large-scale production and commercialization in a short period of time through self-research, acquisition, and cooperation to efficiently integrate resources and rapidly expand its own capabilities. model.

"The BBC model is relatively common among large multinational pharmaceutical companies. While ensuring that they have strong R&D capabilities, they will generally enhance their core competitiveness and further expand their market territory through acquisitions and cooperation." Ding Mr. Wei told CHC Medical Media that at present, more domestic medical companies will embrace the BBC model, but start-ups and growing companies of in vitro diagnostics have not yet seen its widespread application.

Build is a basic capability. As an IVD company, it must have its own R&D capability, verticalization, and independent productization capabilities from upstream raw materials to terminal applications. And this is also the cornerstone of building a platform enterprise.

Buy is a strategic merger and acquisition to make up for the vacancies in the company's products and markets. When the target appears and the timing is right, you can consider exchanging funds for time to acquire related companies, realize capability reinforcement in a relatively short period of time, and seize the development window. Multinational giants such as Danaher and Roche will enhance technology and expand emerging markets through acquisitions. It is a challenge for small and medium-sized enterprises to use "buy" to grow bigger and stronger, and it is not easy to replicate.

Collaborate includes a lot, it can be OEM, it can be cooperative research and development, it can be JV, and channel sharing is a very important way for enterprises to obtain resources from the outside world. Get what you need.

"The BBC model is the core competitiveness of Pinnacles Medical. Through the BBC model, we can quickly implement the strategy. We have spent more than a year building the Pinnacles ecosystem, which has truly achieved twice the result with half the effort." According to Mr. Ding Wei, Pinnacles Medical is currently in R&D and intelligent manufacturing centers have been established in Shanghai, Beijing, Guangzhou, Shenzhen, Zhengzhou and Suzhou. In terms of products, in addition to the aforementioned intelligent inspection robots, breakthroughs have been made in assembly lines, bio-immune products and molecular diagnostics. Pinnacles Medical has acquired two companies, bringing more than 100 approved reagents and a large national sales channel to the company. At the same time, Pinnacles Medical has also reached strategic cooperation with more than a dozen companies, including hardware suppliers for intelligent inspection robot products.

Mr. Ding Wei told CHC Medical Media that in order to run through the BBC model, connections and funds are essential.

In terms of contacts, Mr. Ding Wei himself is a professional who has been working in the IVD field for more than 20 years. He has served as an executive of many leading IVD companies at home and abroad, and has a solid foundation of industry contacts. In addition, Pinnacles Medical has a founding team of nearly 20 people, covering research and development, marketing, sales and registration, and almost all of them have work experience in well-known domestic and foreign companies. Therefore, Pinnacles Medical has a deep network of contacts in the field of IVD at home and abroad.

In terms of capital, thanks to the strength of the Pinnacles medical team, innovative model, and development prospects, the startup received support from Zhen Fund, Oriental Fortune, etc. at the beginning. In September 2021, on the first anniversary of the company's establishment, it completed a round A financing of up to 300 million yuan, led by Lilly Asia Fund, followed by Qingsong and Xiangfeng. In the words of Mr. Ding Wei, "ammunition is still relatively sufficient."

At the end of the conversation, Mr. Ding Wei told CHC Medical Media that Pinnacles Medical is a partnership culture, looking forward to the future and being low-key and pragmatic. The investors and partners of Pinnacles Medical are all colleagues in building an ecological circle, holding the concept and persistence of "quality is as heavy as a mountain, not just a peak".

 

 

CEO Summit·Medical Devices and In Vitro Diagnostics Session

Roundtable Forum: In the post-epidemic era, the value rebalancing of the IVD industry chain

 

Ding Wei: The new crown epidemic has spawned many things, and the rebalancing after the epidemic will also be in many ways.

The first is the rebalancing of demand, which will inevitably lead to the rebalancing of the industry. After the new crown epidemic, the new crown detection will reach a new balance point, the industry demand will gradually return to normal, and the advantages of traditional IVD enterprises will also return.

During the epidemic, in order to detect the new crown, the whole country invested a lot in the field of molecular diagnosis, and built many molecular diagnosis laboratories. The future development direction of molecular diagnosis also requires us to think carefully.

The other is the rebalancing of capital. During the epidemic, a large amount of capital was invested in molecular diagnostics and raw material-related fields. When the epidemic is over, the correctness of these investments will be verified. Enterprises and teams with their own core technologies and related commercialization resources will be able to continue to attract capital and maintain high valuations; otherwise, they may be abandoned by capital.

In addition, will the home diagnosis model or out-of-hospital diagnosis model that emerged internationally during the epidemic continue after the epidemic? These issues are worthy of our discussion. At that time, I will have a good chat with you at the CEO Summit on April 12.