Introduction

China is a country with the high incidence of birth defects. Every year, there are more than 1.2 million new born with congenital simpleton and disability, accounting for about one fifth of the world's total more than 5 million children with birth defects. One of the reasons is that due to the uneven medical care level in different places, many pregnant women have no access to complete prenatal testing services. Another reason is the limited medical technology level. Based on China's national conditions, Celula (China) Medical Technology Co., Ltd. (hereinafter referred to as "Celula") applies unique patented technologies and focuses on the field of reproductive health, aiming to provide high-quality products suitable for China's national conditions for fetal genetic defect screening and diagnosis. For today's interview, we have invited Dr. Zhang Haichuan, founder of Celula, to talk about the establishment and operation of setting up a testing and diagnosis enterprise and insights on the development of the industry from the view of a founder of a technology-based enterprise.

Expert Introduction

Dr. Zhang Haichuan, Doctor of Engineering of Tsinghua University, has worked in the United States for more than 20 years. In 2013, he returned home to start his own business. Now, he is the founder and general manager of Celula (China) Medical Technology Co., Ltd. and also an expert in bioengineering and medical technology.

Dr. Zhang Haichuan, Founder and General Manager of Celula (China) Medical Technology Co., Ltd.

About Celula's Development Path

During his study in Tsinghua University, Dr. Zhang Haichuan majored in Precision Instrument Mechanics as a postgraduate. Upon graduation, he worked in innovative technology enterprises in the United States for many years, and implemented and led many technology product research and development projects. Such an education and working background decided his choosing to focus on developing technological strength when he returned home to start his own business, and had already mapped out its medium and long-term development path before Celula was born.

During more than 20 years of working in the United States, Dr. Zhang has learned many advanced cases on the development of technological enterprises. Such kind of working experience has virtually affected Dr. Zhang's concept of starting a business: Even at the beginning of his business, he was not eager to succeed, but rather hoped to grow the enterprise steadily by stages. In 2013, Celula was founded in Chengdu as a technological enterprise. Based on advanced technologies, it specializes in reproductive health, a subdivision of the pharmaceutical industry. In his view, the market demand for reproductive health products is permanent and rigid. Therefore, an enterprise wanting development should focus on the increase of short-term market share, but how to continuously develop technical products with distinctive features and obvious advantages.

Every year, there are about 17 million newborn babies in China. In order to ensure reproductive health and population quality, non-invasive prenatal genetic diagnosis which has received much attention and recognition and is also developing rapidly needs stronger technical support. To this end, Celula has established a perfect technology research and development base, formed a work team and developed its own technology research and development ability in a step-by-step manner; according to the actual market demand in China, it has also fostered scientific research cooperation with large hospitals so as to efficiently transform scientific achievements into high-quality technical products that meet specific requirements of clinical application.

Dr. Zhang vividly compared the whole set of human genes to a book with billions of characters, and different chromosomes are just like different chapters in the book. A book may suffer some common problems in some chapters such as misprints, overprints, incorrect page numbers, binding errors and so on. In the case of the clinical manifestations of human body, they are diseases caused by gene defects. For example, Down syndrome occurs due to the presence of an extra chromosome 21, and its incidence rate is as high as 1/750. There are currently two methods for diagnosis: ① After reading the complete book, count the number of gene information belonging to Chapter 21 sentence by sentence, and compare it with the normal number to find out whether some gene information is repeated in Chapter 21, but this method's technical cost is high and it is also not suitable for comprehensive popularization; ② grabbing the text of Chapter 21 directly from the book through special technical method, and whether the printing is repeated or not can be judged without reading the whole book. This method can greatly improve the detection efficiency. Celula, based on the second technical scheme, can solve the limitation of high cost of other methods, whilst improving the detection accuracy.

About Current Situation of Domestic Pharmaceutical Industry

In Dr. Zhang's view, China's development foundation in the biomedical industry is not strong enough, and China's experience in technology transformation is still insufficient. In China's market environment, many unique technologies have yet to be transformed into products that are truly suitable for China's national conditions through scientific and systematic processes. Mature products imported directly from overseas often face "non-acclimatization" at home (too high price, difficult to meet the application conditions, etc.). It is a must for a technology enterprise to make localized adjustment and optimization according to the actual situation of China and the needs of the people. At the very beginning of foundation, Celula had decided to take self-owned key technologies, perfect technology R&D and product transformation ability as its core competence. Dr. Zhang firmly believes that such products are more competitive sustainably in Chinese market in the long run.

Although the domestic market is huge, there are only a handful of enterprises that can provide high-quality reproductive health products and services. Celula, as an innovation-driven technology enterprise in this field, has gone from strength to strength with a staff of over 100 and an increasing number of partners, which proves that taking the medium and long-term development path and focusing on R&D of niche products is a right decision.

About product market

Only about 6% of China's gross domestic product (GDP) is used for overall medical services, compared with 17% in the United States. Imagine the gap in this proportion when the figure is divided into the detection and diagnosis field. According to Dr. Zhang, at present, only large hospitals in China have complete inspection and diagnosis equipment and service capabilities, and many reasons lead to the lack of suitable testing methods in most primary hospitals, which obviously cannot meet the actual needs and China's rapid development. Since the cost of treatment is generally higher than that of diagnosis, people lack understanding of the importance of examination and diagnosis. But in fact, scientific diagnosis is the premise of effective treatment. Accurate pre-treatment diagnosis can avoid unnecessary waste of resources such as drugs, surgery, medical personnel, etc. When asked about it, Dr. Zhang believes that two-pronged efforts should be made. First, the government needs to intervene to change this situation and coordinate the allocation of medical resources in diagnosis and treatment. Second, grassroots hospitals need to be equipped with inspection and diagnosis equipment that they can afford, and relevant enterprises should redouble their efforts to provide corresponding products.

And Celula's competitive flagship product, non-invasive prenatal testing product, can meet above needs. This product can efficiently analyze the genetic defects and health status of fetuses by using the peripheral blood of pregnant women, and can also reduce the detection cost several times by leveraging patented technical means. Therefore, it is suitable to be popularized in grass-roots hospitals nationwide, conforms to the basic guidance of national policies, and also meets the basic index requirements included in the medical insurance catalogue.

At present, the domestic market of flow cytometer is almost monopolized by foreign brands, and there are no high-quality suppliers in China. Major hospitals spend more than hundreds of thousands of yuan to purchase the equipment, and the testing reagents are also very expensive. While through Celula's another flagship product, flow cytometer in hematological analysis, only a small amount of fingertip blood is needed for fluorescence staining for the diagnosis of diseases such as AIDS, leukemia, lymphoma and even infertility through optical methods. The flow cytometer adopts independent research and development technology. It is expected that it will obtain a production license by the end of 2018, and will enter the market next year at a price of only one third of that of similar products imported from overseas. Meanwhile, it can also greatly simplify the operation, thus effectively meeting the use conditions of the grassroots hospitals in China. In the future, Celula will continue to upgrade its products to make the flow cytometer smaller and more portable like hand-held ultrasound and such devices.

Dr. Zhang Haichuan, Founder and General Manager of Celula (China) Medical Technology Co., Ltd.

About the Long-term Goal of Celula (China) Medical Technology Co., Ltd.

When Celula was established in Chengdu in 2013, Dr. Zhang hoped that the enterprise can set a long-term goal — to better meet the changing market demand, timely and effectively select cutting-edge technologies and experience that have been proved feasible in the U.S. environment through a sound enterprise platform, utilize China's clinical resource advantages and efficiently convert them into products that meet international standards to serve the Chinese and world markets, thus generating market value to the greatest extent possible, providing sufficient resources for further optimization and screening of next generation products, and effectively maintaining the enterprise's dominant position for a long time.

According to Dr. Zhang, there are still many clinical problems of great urgency to be solved in the field of reproductive health, such as non-invasive prenatal detection of monogenic diseases such as thalassemia, accurate prediction of premature birth, and embryo health detection of test-tube babies. Therefore, there is still a long way to go in the development of testing products in the field of reproductive health. As a technological enterprise, Celula is in a position to and also has responsibility for contributing to improving the quality of the population and ensuring a healthy future for each family.

About the Macro Development Environment of Pharmaceutical Industry

China's bio-pharmaceutical industry is developing in leaps and bounds, and its regulatory system is on the improvement and becoming more and more international. However, compared with developed countries in Europe and the United States, there is still a certain gap in many aspects like the formulation of relevant laws and regulations and the cultivation of professional quality of practitioners. Dr. Zhang explained by taking disease detection products as example. The regulation and market entry methods for new technologies and products in China lack diversity, with declaring the corresponding qualifications of medical devices to CFDA (China Food and Drug Administration) as the main method. In addition, the declaration process is often more complicated than abroad. The more advanced products are, the more likely they are to encounter delays caused by unclear declaration rules. In contrast, there are two types of regulation and market access methods for disease detection products in the United States. One is to declare to the U.S. Food and Drug Administration (FDA) which has formulated clear rules. The second is to engage in medical testing services through the establishment of third-party testing institutions. The third-party organizations are mainly responsible for their self-developed testing technologies and diagnosis results. Generally, a product can enter the market faster through the second way than FDA approval. However, in the event of a diagnostic error, the third-party institution would have to assume significant legal and economic responsibilities, and even face risks such as loss of market trust, bankruptcy, etc. Enterprises should make suitable choices based on their products' characteristics, and their market strategies.

In the United States, 60% of disease detection is done through the third-party service organizations, and most advanced and complex detection technologies enter the market in the first place through this way. While in China, the current proportion is only 5%, and the corresponding policies are not clear and perfect.

In general, the ongoing policy reform in the pharmaceutical industry will definitely offer more and more favorable conditions for the popularization of new technologies and products in the domestic market, and the regulatory system will also become more and more sound, stimulating the huge potential of China's medical market.

Dr. Zhang said frankly that there are many reasons for his returning to Chengdu to start a business. Setting up a business in Beijing, Shanghai and Guangzhou are costly, and compared with coastal cities, Chengdu is quieter and has a higher quality of life, making it suitable for the team to settle down to research and development. In the past five years, Celula, taking Chengdu as its technology R&D and service center, has begun to expand its scientific research and business to developed areas and has also attracted more and more attention from the government.

When asked about how the government supports enterprises and helps them solve problems encountered in their development course, he said that problems facing a technology enterprise in the development can be divided into internal problem and external problem. For most enterprises of this kind, the internal problem is how to develop a good technology product. It is the core competitiveness of an enterprise with which the government finds itself helpless. Only after this internal problem is solved can the government's policy support and optimization be helpful. On the topic of government assistance, Dr. Zhang specifically mentioned the assistance and support of Sichuan's governments at all levels to the bio-pharmaceutical industry, which has helped many excellent innovative enterprises to quickly get on track and foster a batch of benchmark enterprises for the industry. In the future, he hopes that the government will pay more attention to disease diagnosis which is an important part of the medical industry, and create a good environment for the development and expansion of this sub-division in Chengdu. At last, Dr. Zhang also expressed his heartfelt thanks to the management team of Tianfu Life Science Park, and spoke highly of the laboratory construction sites, research and development supporting services and manpower recruitment services provided by the park.