Will artificial intelligence impact the status of traditional doctors?
Author | Wu Tong
Editor Li Yiming
Source | Mustang Finance
Briefly describe their own health problems, the machine will automatically retrieve and coordinate telemedicine resources, after confirming the problem, the patient enters the medical warehouse, there is a complete system for examination, diagnosis and treatment, and no doctor can complete the whole process of diagnosis and treatment. The scene appeared in the 2012 sci-fi movie Prometheus.
With the development of artificial intelligence (Artificial Intelligence, abbreviated as "AI"), some technologies related to the medical scene in the film have made a breakthrough, and even widely used in hospitals.
(screenshot source: NetEase, Inc video)
Founded in 2017, Dukun Technology is a leader in the medical AI industry. In the four years since its establishment, it has obtained 10 rounds of financing with a total of nearly 2 billion yuan, and recently submitted a "prospectus" to Hong Kong stocks.
According to the prospectus, the "digital doctor" product portfolio pioneered by Jukun Technology can provide intelligent services in the whole clinical process of disease screening, diagnosis, treatment selection and planning for heart, brain, chest, abdomen, muscle and bone, etc. it has been used by more than 1200 hospitals in China to analyze medical imaging data and assist human doctors.
In spite of this, the commercialization and profitability of Jukun Technology remains to be seen. In the past two and a half years, Jukun Technology has lost more than 300 million yuan.
(screenshot source: "prospectus")
Of course, the loss of Jukun Technology is just a microcosm of the industry. What is more controversial in the industry is the value of medical AI products. Is it a "carnival" of entrepreneurs and capital, or does it actually match the actual needs? "after a lot of [AI Healthcare] products come out, IT people are happy." Wang Shan, former dean of the people's Hospital of Peking University, once commented that Chen Kuan, founder of the medical AI enterprise, also said, "at that time, I didn't even want to look at my own products."
The "attraction" of Jukun Technology: it has received 2 billion financing in four years, and its valuation has increased by 93 times.
Jukun Science and Technology was able to get to the door of the capital market four years after its establishment, which is caused by the combination of weather, geography, people and people.
In a chess game in 2016, Alphabet Inc-CL C's AI robot beat world go champion Lee se-dol at 4:1, pushing AI into the "tuyere", and landing medical field has become one of the most concerned directions.
In June 2017, Mao Xinsheng and Ma Chune, who had more than 10 years of experience in the field of artificial intelligence and information technology, jointly founded Jikun Technology, and their glamorous resumes brought a lot of attention to the project.
Mao holds a master's degree in computer science from Peking University and Ma Chune holds a master's degree in computer network and communications engineering from Northwestern Polytechnic University. both previously worked for IBM, an international business machine company, and served as chief technology officer of IBM China Development Center and R & D manager of emerging Technology Research Institute, respectively.
The main application fields of medical AI are auxiliary diagnosis, new drug research and development, medical imaging and so on. Among them, with the vast market and demand, medical imaging has become one of the most popular subdivision tracks in medical AI, and this track is under the pressure of Jukun science and technology.
The so-called medical images mainly include computed tomography (CT), nuclear magnetic resonance imaging (MRI), digital X-ray imaging (DR) and ultrasound, which provide visual presentation of organs and tissues in the human body for diagnosis, treatment and health management.
According to the prospectus, medical imaging accounts for more than 80 per cent of all clinical data. The market of China's medical imaging industry has rapidly increased from 248.8 billion yuan in 2015 to 375.8 billion yuan in 2020, and is expected to reach 647.8 billion yuan in 2030. The annual growth rate of domestic medical imaging data is about 30%, but the number of doctors is only growing at about 6% a year, and the number of domestic doctors is already in shortage.
(screenshot source: "prospectus")
With the halo blessing of the founding team and entrepreneurial projects, Jukun Technology received the angel round investment of Yuanyi Capital at the beginning of its establishment. Since then, with the continuous progress and breakthroughs in products, technology, qualifications and applications, more and more capital has been extended to it.
According to the prospectus, since its establishment, Jukun Technology has completed 10 rounds of financing and received a total of nearly 2 billion yuan. Among them, four rounds of financing were completed in 2020 alone, and two rounds of financing have been obtained so far this year. The investors behind include well-known capital Yuanyi Capital, Huagai Capital, Goldman Sachs Group Capital, Chunhua Capital, Sequoia Capital, Bank of China International, Jianyin International, China Reinsurance and so on.
The valuation is even higher. After the first round of financing in 2017, Jukun Technology was valued at 100m yuan; as of this time before applying for IPO, the valuation of JKun Technology has reached 9.4 billion yuan, 94 times that of four years ago.
(screenshot source: "prospectus")
At present, Mao and Ma have a combined 34.24% stake in Kun Technology, which is the single largest shareholder. According to the company valuation of 9.4 billion yuan, the two are worth as much as 3.2 billion yuan. The second to the fifth largest shareholders are Huagai entity, Yuanyi entity, Shanghai Chenxi and Sequoia entity.
(screenshot source: "prospectus")
The "gold-swallowing power" of Jukun Technology: the gross profit margin is as high as 84%, with a loss of 300 million in two and a half years.
The ability of Jukun science and technology to "absorb gold" is not to be underestimated, and the speed of "swallowing gold" is also considerable.
According to the prospectus, the Jukun digital doctor platform currently includes 12 products and 25 candidate products, forming a product matrix including digital heart, brain, chest, bone, abdomen and so on. According to the report of the third-party research and analysis institution, according to the number of medical device registration certificates obtained by the State Drug Administration, Jukun Technology ranks first among the artificial intelligence medical imaging companies in China.
Among them, the entry threshold of cardio-cerebrovascular AI is higher, and the technical challenge is also greater, but it is precisely by cutting into the heart and brain AI that Jukun Technology rapidly stands in the highland of the industry. At present, its "digital heart" has become one of the most mature AI products in the industry.
With the moat of technology, the gross profit margin of Jukun Technology is comparable to that of Maotai.
According to the prospectus, the gross profit margin of Jukun Technology was 83.4%, 83.5% and 84.2% respectively in 2019, 2020 and the first half of 2021. Guizhou Moutai 2021 China News disclosed that the company's gross profit margin was 91.38%.
(screenshot source: "prospectus")
At the same time, although the total revenue of Jukun Technology is not high, it shows explosive growth.
According to the prospectus, revenue of Jukun Technology reached 764000 yuan and 24.771 million yuan in 2019 and 2020 respectively. In the first half of this year, revenue of Jukun Technology reached 52.624 million yuan, an increase of 681 percent over the same period last year.
However, Jukun Technology has not made a profit so far, and the amount of loss even continues to expand. In 2019, 2020 and the first six months of 2021, Jukun Technology lost 90 million yuan, 129 million yuan and 87 million yuan respectively.
In this regard, the explanation given in the prospectus is that income falls short of expenditure, which is mainly caused by R & D expenditure, sales and marketing expenses, administrative expenses and so on.
Research and development expenditure alone, in 2019, 2020 and the first half of 2021, the expenditure of Jukun Technology was 42.69 million yuan, 62.93 million yuan and 81.19 million yuan respectively, far exceeding the revenue of the same period. Among them, in the first half of 2021, the R & D expenditure of Jukun Technology increased by nearly 200% compared with the same period last year, which is higher than that of 2020.
(screenshot source: "prospectus")
Under R & D expenditure, the largest proportion in 2019 and 2020 is employee welfare expenditure (mainly including the salaries and benefits of R & D staff), accounting for 60.8% and 52.4%, respectively. By the first half of this year, testing expenditure exceeded employee welfare expenditure. The amounts involved are 33 million yuan and 31 million yuan respectively.
(screenshot source: "prospectus")
Jukun Technology mentioned in its prospectus that the company's financial prospects depend largely on the company's ability to complete the development of candidate products in a timely manner, obtain the required regulatory approvals and successfully commercialize approved products. The above three links are all long, complex and expensive processes.
The IPO financing will continue to be used for R & D investment, registration application and clinical trials of digital doctor product portfolio platform, as well as commercial promotion and strategic cooperation planning, and speed up the continuous research and development of other digital doctor product portfolio and digital human technology platform.
Burning money, landing, commercialization... There are already a number of peers sprinting into the capital market.
The medical AI industry is a strong regulatory industry with a long investment return cycle, which needs huge funds to support the previous R & D work, and the follow-up commercialization is faced with many uncertain factors, such as policy, environment, industry and so on. At present, all the enterprises that can have a place in the industry have experienced many rounds of monster upgrading.
In the early days of the birth of medical AI, whether hospitals, patients, or capital, the acceptance of it is not high. It was not until the chess game in 2016 that the industry became popular with capital, and before that, many companies had hurriedly exited because of financial problems.
"when the medical AI first came out, the market still held a wait-and-see attitude, but in the past two years, many technologies have been relatively mature and actually applied to many scenarios. For example, temperature measurement used to require manual measurement, but now there is AI temperature detection equipment, which plays a particularly significant role in this epidemic. It does not require close contact between people and people, maintain a certain distance from the machine, and can detect dozens of people in a minute, which can not only improve efficiency, but also reduce cross-infection. " A staff member of a third-class and first-class hospital said.
"AI is also widely used in the field of medical imaging. Many large hospitals basically have access to this service, and the equipment will automatically generate a series of data and reports based on the images, which the doctor will use as a reference." however, the staff of the above-mentioned third-class and first-class hospitals also said that the final diagnosis report is still issued by the doctor. "this service hospital pays for the equipment, and patients don't pay for it."
Round after round of crazy influx of capital, but rarely arouse valuable splash. Many people in the industry look back and find that many medical AI products do not adapt to the real medical scene. The products that spend a lot of money on hard research and development seem to be moved only by the producers themselves. The market acceptance is low, and the time when the products are going to clinical practice is unknown. Changes in regulatory policies have also brought a lot of uncertainty to the industry. Around 2019, the industry gradually returned to rationality and calmness, and a wave of enterprises were out again.
In 2020, the track gradually matured and the landing direction became clear. For example, during the epidemic, the COVID-19 image artificial intelligence system provided by Jikun Technology helped front-line doctors quickly process massive lung CT images; the AI diagnosis system developed by BABA could diagnose suspected cases within 20 seconds, nearly 60 times faster than human detection, and the accuracy was as high as 96%.
The goal of capital is also more clear, a number of head companies began to sprint to the capital market.
According to the incomplete statistics of Mustang Finance, before Sikun Science and Technology, this year alone, three peers have successively submitted listing applications: Keya Medical, Eagle pupil Airdoc and presumptive Medical. Among them, the listing status of Keya Medical is "invalid", which also means that its capital market lost the first battle. Compared with the performance and commercialization of the other three companies, the advantage of Keya Medical is not obvious, with revenue of 1.167 million yuan in 2019 and 709000 yuan in 2020, mainly from providing research services to hospitals.
Yitu Technology, which also laid out the medical AI business, suffered setbacks when it went public twice. In March this year, due to requirements such as "issuers and sponsor agencies need a longer time to implement the rules and regulatory verification", the IPO review was "suspended" according to Tu Technology. In July, Yitu Technology voluntarily applied to withdraw the declaration materials, and immediately sold its unprofitable Yitu Healthcare.
Submitting the prospectus is only the first step in listing, and the ultimate success depends on many factors.
Jukun Technology disclosed in the "prospectus": the company has incurred significant operating losses in the past, and it is foreseeable that it may continue to generate operating losses in the future. We may need additional financing to maintain the company's operations, and if we do not get enough financing, the company may not be able to complete the development and commercialization of candidate products. This visit to Hong Kong IPO no matter logarithmic Kun technology, or behind the management are of great significance.
Have you ever photographed CT when you or someone around you went to the hospital to see a doctor? What do you think of the related AI medical technology?