China-based Shineco, Inc. (NASDAQ: SISI) announced to acquire 51% of the total outstanding equity interest of Xiang Peng You Kang (Beijing) Technology Co., Ltd. (“XPYK”) on January 18, 2022. Shineco expects that the acquisition will help it accelerate its digital transformation and develop comprehensive medical and healthcare services, especially digital therapeutics in oncology.
Utilizing modern engineering technologies and biotechnologies, Shineco produces, among other products, Chinese herbal medicines, organic agricultural produce, and specialized textiles. At the same time, XPYK is a comprehensive medical and healthcare group with the self-developed “Yikang International Medical and Health Service platform.” The platform is an integrated service system with industry-leading medical and healthcare resources that provides patients with professional, fast and effective medical and healthcare solutions.
Dr. Peng He, the CEO and Founder of XPYK believes the acquisition is a win-win situation for both companies. He said, “we will focus on cancer prevention and treatment, high-tech medical technology transformation and application, and medical vocational education, and will use high-quality medical resources and high-precision medical technology to provide patients with better services and cultivate more medical and technical professionals for the society.”
Ms. Jennifer Zhan, CEO of Shineco, commented, “This acquisition will make a milestone for Shineco. We expect it may take three years to gradually achieve the strategic development plan of Shineco and XPYK’s digital medical and digital healthcare management businesses.”
Peng earned a Doctorate in Biochemistry and Molecular Biology from Peking University. As a former doctor in Peking University Cancer Hospital for three years, Dr. Peng He witnessed people’s suffering from cancer treatments, such as inefficiency and incontinence brought by the medical system, as well as high treatment fees. As a result, Peng left the hospital and founded “Yikang International Medical and Health Service platform” in 2015. The platform was recognized as the first digital one-stop medical and health service provider in China.
Jumping into 2022, with the acquisition of Shineco and XPYK, the two companies merged to be “Shineco Yikang”, focusing on digital therapeutics in oncology. Dr. Peng He mentioned, “In the next three years, we will build ten advanced medical laboratories, expecting to undertake the entire inspection commission of about 100 city and county hospitals, of which the core business is cancer prevention and treatment. We are also going to install high-end and scarce detection equipment such as PET-CT in those hospitals so that local patients can experience the same advanced diagnosis and treatment as hospitals in first-tier cities.”
Digital solutions can help patients manage their symptoms at home, and they also can provide feedback to healthcare providers about the patients’ fatigue, sleep, and physical exercise. “I have strong connections with highly skilled and famous cancer treatment doctors. We will build an oncologist group and make sure the data can be shared among those experts, to avoid repeating charges and thus save about half of the patients’ money,” Dr. Peng He added.
Shineco Yikang has five targeted tracks in digital medical care, including digital diagnosis and therapeutics in oncology, life-cycle health management platform, life science research institute, biomedical science and technology achievement transformation base, and medical education and training base.
Driven by multiple factors, such as policy changes, technological development, market evolution, and the COVID-19 pandemic, digital medical and healthcare management industries are ushering in significant development opportunities. Earlier this month, China has decided to accelerate the implementation of major projects outlined in the 14th Five-Year (2021-2025) plan for social and economic development with expanded investment, including the digital healthcare industry. Therefore, it is fair to say it’s the right time for Shineco Yikang to invest in the industry now.