HEALTH BioMed AI+ · Industry & Company Analysis Financial Analysis & Financing Option AI Solutions...
Transcript of HEALTH BioMed AI+ · Industry & Company Analysis Financial Analysis & Financing Option AI Solutions...
Chengjie Fu, Xufeng Cai, Xingyu Zhu, Yimo Zhu,
Yucheng Men, Zhangziyi Zhan
AI+
HEALTH BioMed
Harvey Lodish• Molecular and cell biologist• Professor at the Massachusetts Institute of
Technology (MIT)• Founding Member of the Whitehead Institute for
Biomedical Research
CONTENTS
Industry & Company Analysis
Financial Analysis & Financing Option
AI Solutions to HEALTH BioMed
01 02
03
01
Industry & Company Analysis
In Vitro Diagnosis (IVD) Industry——Late start but great potential
63
38
30
59
0
10
20
30
40
50
60
70
USA ChinaWest Europe
Japan Global Ave.
-92.06%$
Annual consumption of IVD products per capita
122153
175
230
306
362
430
517
51% 53% 55%
66%70%
74% 75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
50
100
150
200
250
300
350
400
450
500
550
20172011
15%
2015
8%13%10% 11%
2016
11%
2013
32%
2010 2012
16%14%
2014
IVD Market Size
Molecular diagnosis share
Reagent share
IVD size & market segment
100 million ¥
01
In Vitro Diagnosis (IVD) Industry——Competitive Landscape
15.24%
13.70%
11.40%
11.89%
9.74%
27.73%
10.30%Others
Daan
Siemens
Abbott
QIAGEN
Kehua
Roche
01
Market Share
Pharmacogenomics Analysis
Human DNA Identification
Pathogen Detection
Drug Development
Genetic Sequencing
Service
Progestation Examination
Health √ √ √ √Daan √
Berry Genomics √ √ √
2017.12.31 2016.12.31 2015.12.31
Health Daan Berry Genomics Health Daan Berry
Genomics Health Daan Berry Genomics
Revenue (10k RMB) 225259 154242.93 117119.13 185242 161256.05 24783.03 152546 14733.91 23005.68
R&D Expenditure(10k RMB) 2173.2915 16510.09 4026.38 1501.48 15727.78 1410 1037.34 11365.31 1308
Profit (10k RMB) 24462 9612.06 24444.61 19933 13591.05 -418.59 16120 11775.26 -1300.87
Yoy�%� 22.72% -29.28% P 23.65% 15.42% L 21.81% -25.76% L
Net Margin 10.86% 6.23% 20.87% 10.76% 8.43% -1.69% 10.57% 7.99% -5.65%
R&D Expenditure/Revenue 0.96% 10.70% 3.44% 0.81% 9.75% 5.69% 0.68% 77.14% 5.69%
Business Comparison
Financial Analysis of Comparable Companies
Drug Development Industry——Limited Investment but Great Opportunity
35.0% 35.0%
15.0%5.0%
40.0% 40.0%
25.0%
15.0%
20.0% 15.0%
20.0%
10.0%
20.0%
25.0%
5.0% 8.0%20.0%
45.0%
2022E
0.0%
20162010
2.0%
2030E
First-Time Generic Drug
General Genric DrugChinese Characteristic DrugMe too/better
First-In-Class
Domestic Drug Sales Forecast
18.49
15.95
15.29
8.46 8.44 8.36
7.05 6.16 6.03
5.76
12.71%
7.40%7.99%
5.27%
6.54%
3.90%
4.75%
3.99%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
012345678910111213141516171819
LivzonHumanwell
3.83%
JoincareCSPSShanghaiHisunBeiGene
5.00%
TaslyFosun
5.53
10.70%
Hengrui
100 billion ¥
17.59
Kelun
8.30%
7.13
BuchangSino Biopharm
R&D InvestmentR&D Percentage of Revenue
2017 Top A-Share and H-Share listed Pharma Companies
01
16.7% of Roche
Drug Industry——Competitive Landscape
Large TraditionalDrug Co.
Small InnovativeDrug Co.
Professional DrugDevelopment Co.
Scientific ResearchInstitution
Large Traditional Co.start from GenericDrugs to First-In-Class
Start from Single DrugSelf-Development
Multi-National Co. Develop Drug by License-In and Self-Development
Institutions Cooperate with Universities to develop new drugs
01
Patient Journey Analysis
Demand Analysis
Discovery Diagnosis Treatment Recovery> > >
96.90%
74.20% 73.40%
27.50%
0%10%20%30%40%50%60%70%80%90%
100%
ChinaGermany JapanUSA
-71.6%
Physical examination penetration
210 240
370430
580700
910
1,170
0%
5%
10%
15%
20%
25%
30%
0
200
400
600
800
1,000
1,200
206201420122009 2011 201520132010
Physical examination size
Physical examination size YOY
Physical examination market
100 million ¥74
91
114133
160178
198
22 25 26 29 30 33 35
96116
141
162
190211
232
020406080
100120140160180200220240
2023 20242019 202120202018 2022
+17.7%
Molecular diagnosis
Molecular diagnosis equipment
Molecular diagnosis reagent
China molecular diagnosis market demand forecast
100 million ¥
Morbidity MortalityCancer World China World China
Lung 31.5 57.13 27.1 45.8
Breast (F) 46.3 41.82 13.0 23.31
Stomach 15.7 30.00 11.7 21.48
Liver 13.9 26.67 12.7 13.13
Developing C. Developed C.
India S. A. China Aus. UK US
Unpatented 32% 11% 49% 5% 14% 14%
Patented 313% 157% 293% 71% 78% 192%
Total 345% 168% 342% 76% 92% 206%
Anti-Cancer Drug Expenditure to GDP per Capita
Age Standardized Rate
IVD Drug
01
Available
Affordable
Accurate
Efficient
Effective
01 HEALTH BioMed——Overview
40.69%
39.06%
12.24%
8.01%
Main sales area
44.69%
20.88%
34.43%
Revenue by hospital
OthersJiangsu
ShanghaiZhejiang OthersGrade III Hospital
Grade II Hospital
Revenue
Net Profit
Valuation
>
Hospital
Medical Center
Lab
Epidemic Station
Blood Bank
Diagnostic enzyme, antigen, antibody,
fine chemicals, etc.
Electron device, equipment, etc.
Reagent
Instruments &accessories
IVD System Agency/Sales
Patients
R&D Manufacturing Agency/SalesDrug
IVD
Supplier HEALTH BioMed Customer
One-package
Service
Coverage Financials(Million ¥)
2743
302
8900
Molecular Diagnosis
HEALTH BioMed——Equity Structure01
HEALTH BioMed Co., Ltd.
Ningbo HEALTH BioMed
Shanghai HEALTH BioMed
Zhejiang HEALTH BioMed
HEALTH Institute of Medicine
Dahongying
HEALTH Supply Chain
Jiangsu Hengqi
MuyangHengchang
DahongyingTrading
100% 90% 90% 100% 100% 95.43% 100% 37.65%98%
100%
100%
100%
10%10%2% 39.2%
Yu Jianwei
Mao Cunliang
Yu Zhongjian & 24 natural persons
HEALTH Holding
Ningbo Lanhu
Zhejiang Yuze
47.97% 11.3% 27.69% 5.8% 3.38% 2.41% 0.97% 0.48%
55.17%
HEALTH Gene Technologies
HaiyiTechnologies
HaichangInvestment
XindaInvestment
Ningbo HEALTH BioMed
Diagnostics
>
• Equity concentrationØ Decision-making
efficiencyØ ResponsibilityØ Proactiveness
IVD Group Drug GroupResearch Group
• Internal DifferentiationØ Precise DivisionØ Clear ResponsibilityØ Synergy
Drug ConsignmentNational presence, large amount of suppliers and clients
Drug Development & Sales154 products, 168 drug registration numbers, 20 drugs under production, 16 drugs in essential drug list
Integrated Diagnosis Product ConsignmentStable relationship with Beckman Coulter, Werfen
group, Immucor, Alere, Bio-Rad, etc
Molecular Biological Detection TechniquesHuman DNA Identification, Pathogen detection,
Pharmacogenomics, tec.10+ molecular diagnostic reagent research results, 22
patents
IVD Drug
HEALTH BioMed——Main Business01
95%
5% 25%
75%
01 HEALTH BioMed——Pain Points
Low Efficiency & Long Cycle
3854
78
156
200
2015 201720162014 2018E
+426.3%
Number of Agents of Imported IVD
High Consignment RatioFierce Competition Fungibility
1
4
14
20152013 2017
Agents of Beckman Coulter
78% 63%
Lower Margin
10k RMBMolecular Diagnosis Reagents
- ConsignmentMolecular Diagnosis Reagents
- Self-developed
Revenue 3,942.90 438.10 Cost 2,168.60 131.43
Margin 45% 70%
Ave. survival time for liver cancer patient
6 Months— 3 Years
12 years
HEALTH Ave. R&D Cycle for Anti-cancer Drugs
Tim
e G
ap
Mr. AI
02
AI Solutions to HEALTH BioMed
PHARMACOGENOMICS ANALYSIS
PATHOGENDETECTION
HUMAN DNA IDENTICFICATION
Artificial Intelligence
GENE TECHNOLOGIES
SURVEY
EXPERIMENT
PRODUCTION
KEY WORDS HERE
Process of DevelopingGene Detection Products
02
We apply big data and NLP technologies to build
a system to find the relationship between
genes and diseases fromthousands of papers.
AI+ Retrieval System
Molecular dynamics methodologies are
applied to simulate the process of interaction
between biological targets and specific binding substances.
AI+ Simulation System
We carry out researching experiments according to
the results of our retrieval and simulation
system.
Experiments
Finally, we put our experimental results into
mass production.
Production
01 02 03 04
AI+ GENE DETECTION PRODUCTS DEVELOPING PROCESS02
We first collect relevant abstracts on PubMed or other sites using drug names of certain diseases, and then select candidate sentences from those abstracts.
Text retrieval
Extracted relations obtained are grouped, and then we calculate
resistance type by machine learning regression methods.
Relation combination
We do simplification of sentences, parsing simplified sentences and
generating grammatical relations in this part.
Text preprocessing
According to the form of Englishlanguage expressions, we define distinct rules to extract relationsfrom parsed sentences.
Relation extraction
AI+ RETRIEVAL SYSTEM: FINDING BIOLOGICAL TARGET02
01
02
0304
Force fields are of necessity for us when doing molecular dynamic simulations. We develop a tool-kit which can learn force fields of reactants through short-time MD.
AI+ force fields build-up
We do molecular dynamics simulations of reactants selected with force fields given by AI tool-kit.
MD with FFs predicted by AI
Through our AI+ retrieval system, we obtain the proper biological targets and specific
binding substances to do simulations.
Reactant selection
Our researchers look into the results of MD, and do
evaluation to see whether such specific binding
substances are suitable to combine the biological targets.
MD results evaluation
AI+ SIMULATION SYSTEM: MOLECULAR DYNAMICS SIMULATION02
PROBLEMS OF NEW DRUGS
the rate of return for large cap biopharma companies
Drug development is a complex, high-risk and costly process
02
PROBLEMS OF NEW DRUGS
5.5 Years
Drug Discovery
10,000COMPOUNDS
Preclinical
250COMPOUNDS
~6.5 Years
$0.3 Billion
13.5 Years5 COMPOUNDS
Clinical Trails FDAReview
~7 Years
02
task1
task2
task3
task4
Activity againstAssay Target
Cytochrome P450, family 3
Cytochrome P450, family 2
Cytochrome P450, family 4
Cytochrome P450, family 1
InputLayer
HiddenLayer
Output Layer
The best drug molecules:
active against target proteins but nonactive against others
AI+ VIRTUAL SCREENING: Multi-task Neural Networks 02
More accurate prediction
Less development time
AI VS Traditional Way in HEALTH BioMed
Less cost for trial
02
03
Financial Analysis &
Financing Option
Cost and time of laboratory development greatly reduced
Independent R&D ability improved
Self-developed molecular diagnosis reagent
revenue increased. IVD
After introducing AI… By setting up AI R&D Division in two subsidiaries of Health BioMed Health Gene Technologies which focuses on in vitro diagnosis (IVD) especially molecular diagnosis products & Dahongying which focuses on pharmaceutical especially self-produced medicine
Better grasp IVD market growth space - revenue!
Self-produced medicine revenue improved for Health BioMed
03
Drug
Before AIRMB ten thousand
Molecular Diagnosis Reagents- Consignment
Molecular Diagnosis Reagents- Self-developed
Revenue 3,942.90 438.10 Cost 2,168.60 131.43
Margin 45% 70%Aggregate margin 47.5%
After AIRMB ten thousand
Molecular Diagnosis Reagents- Consignment
Molecular Diagnosis Reagents- Self-developed
Revenue 1971.45108 2409.55132Cost 1084.298094 722.865396
Margin 45% 70%Aggregate margin 58.75%
* Rationale: The adoption of AI will increase the weight of SDR and lower the weight of CR, thus change the structure of current Revenue/Cost
After Adopting AI, more Self-Develop, less Consignment
03 After introducing AI… IVD – Health Gene Technologies
Typical timeline for Pharmacy Development:
Three dimensional benefits: Time, Money and Success rate
AI can significantly cut down on the time spent during the first stage 70% ↓
AI can significantly cut down on the cost of the first stage 50%~80% ↓
AI can raise the success rate 12% to 14%
01
Total Cost for per approved new compound : 20%~30% ↓*
02
03
5 years lab experiments 5 years clinical trials
03 After introducing AI… Pharmaceutical – Dahongying
Financial Data Forecast
Revenue= Cost + Net Income + S,G&A + tax + interest
Molecular Diagnosis Reagents Self-produced medicine
ω1 1-ω1
ω2 1-ω2 1-ω3ω3
Consignment Self-developed Clinical trialLab experiment
More self-developedLess consignment
Slash on lab cost
03
Financial Data Forecast
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
20202016 20192014 2015 201820172013
Revenue�without AI adoption)
Net Income(with AI)
Renvenue(with AI)
Net Income(with AI&Resizing)Net Income (without AI adoption)
NetMargin(with AI)
NetMargin(without AI adoption)
Revenue(with AI & resizing)
Million ¥
03
Size and Specific Purposes of the Raised FundsWe can take Health Biomed as the main body to carry on the equity financing
Our Pitch: 60 Million RMB!
0.5% Equity
15
15
30
Computational Resources & Laboratory EquipmentsOutsourcing Cost, to AI specialized company during development process
staff salary, paid to Computer Scientists, Bio Scientists,Engineers etc.
03
60 million RMB for 0.5% equity of a firm with net asset of 8.9 billion RMB
Cheap price !
Potential to get back to IPO !
Perfect timing to get into a blue ocean industry 01
02
03
04
What will you investors get from this precious investment opportunity?
+ ������!���)&,+���'*����(���$� #����%,+���������"�,…
Favorable regulations
03
THANKS!AI+
HEALTH BioMed
Appendix-Timeline
19.01 AI+VS 19.03
AI+retrieval system
19.02CooperatewithBaidu
19.05
AI+Simulation
System 20.02
AI+Preclinical
Drug
22.05
AI+ Clinical Trails
04
Appendix04