In the "2012 Chuangyebang Annual Meeting and Chuangyebang 100 Annual Award Ceremony" on the afternoon of December 2nd, Yang Xiangyang, the famous angel investor and chairman of Yuanzheng Investment, delivered a keynote speech "Opportunities in the medical and health Industry" and shared his experience and observation in the medical industry for more than 10 years. Yang believes that the current medical system is bound to change, and the development of IT technology, especially cloud computing, and the progress of life science itself will create huge business opportunities in the next five to 10 years. Even the development of new drugs, which he once thought had no chance, is now time to catch up with the world's best.
Yang Xiangyang, chairman of Yuanzheng Investment, photo source: Chuangyebang
There are opportunities in health care in three directions
In Yang Xiangyang's view, the changing healthcare industry will create opportunities in three directions:
First, the further deepening of medical reform will open up space for private capital to enter small and specialized hospitals and clinics. The current medical system has reached a point where both doctors and patients are deeply dissatisfied -- patients are hard to see, expensive to see, and doctors are underpaid and under pressure -- and reform has to take place. It is clear at the policy level that private capital should be allowed to run hospitals or even buy shares in public hospitals. This means that medical institutions will be diversified. In accordance with the law of the market, in addition to large general hospitals, a large number of small specialized diagnosis and treatment institutions, such as pediatrics, ophthalmology and dentistry, are also needed to meet the needs of various market segments. Medical insurance and other related services will be derived, and constraints on ownership, approval and license may be loosened. Every step of deregulation may bring changes in the industry.
Second, the informatization of medical institutions themselves and the use of informatization to do medical treatment. Medical institution informatization does not refer to the primary level of internal networking and paperless, but to support the whole hospital based on an Internet framework and form a set of medical information exchange system. Yang Xiangyang believes that in order to do this, you must understand the medical and clinical knowledge. Pure IT companies cannot do it, and many large foreign companies do not do it well, and there is a large market gap. "It's easy to understand the use of information-based medicine, such as web-based doctors based on PCS or smartphones. Some of these projects are very popular, but I think it's very early days, and no one has really established themselves in this market yet. There must be opportunities in the future, but be patient."
Third, the development of life science and technology has the potential to overturn tradition. Yang Xiangyang said that the achievements of life science and technology in the past 10 years are higher than the total of mankind in the previous thousands of years. The success of American-led research into the human genome more than a decade ago meant that modern medicine's understanding of life was already profound. These insights have upended once-mainstream ideas and drugs, such as cancer chemotherapy.
New drugs are being developed
"I have often been asked if there are any opportunities for new drug research and development or investment in China. I tell them there's hardly any. But as I stand here today, I rather agree with you to look in this direction." Yang Xiangyang's "self denial" caused a lot of commotion under the stage. Yang has invested in famous medical companies such as Hepalink, Beike Bio and Cybrio, and his views have attracted much attention in the circle.
Those who know him well know that he has long been an opponent of new drug development. There are two reasons: the product market does not support, the capital market does not support. The state does not have a strong policy boundary for drug sales, and the drugs developed do not give rebates or engage in crooked practices, which basically means that the channels cannot be opened and the drugs cannot be sold. In addition, it is difficult to win VC/PE and capital market support due to the long time, huge investment and high risk of new drug development.
Mr. Yang said he changed his tune because new drugs often rely on new technology. Nowadays, local and a large number of overseas talents have made a qualitative leap in the research and development level of Chinese pharmaceutical companies, venture capital is gradually mature, and the barriers to entrepreneurship tend to collapse. There is still considerable space for imitating overseas models or buying patents. Independent research and development is no longer impossible.
For many IT entrepreneurs and investors to do medical care, Yang Xiangyang warned that doing medical care is different from doing games, consumption and other "entertainment" and "fun" things after all. No matter which direction you focus on, you must not deviate from the essence of medical and health business: it is about life, curing diseases and saving lives.
