Recent China’s 2022 Government Work Report clearly pointed out nine key goals in the medical and healthcare field, including the deployment of graded diagnosis and treatment.
Just a week after the Government Work Report, Shineco, Inc. (NASDAQ: SISI), a producer and distributor of Chinese herbal medicines, organic agricultural and other biotech products, today announced that on March 4, 2022, the Company has signed a strategic cooperation framework agreement on Shineco’s Weifang Life Science Industrial Park Project with the Development Service Center of Weifang Binhai Science and Technology Innovation Park in Shandong Province to build one of China’s first city-level tumor classification diagnosis and treatment centers and an online telemedicine service platform, which would constitute Shineco’s tumor diagnosis and treatment platform.
The Company expects to complete the construction of its first city-level tumor classification diagnosis and treatment center by the end of 2022. Through leveraging respective advantages and resources, both parties expect to jointly build the Center and promote the implementation of digital medical care, internet hospitals, and the research and development of innovative medicine and devices.
Pursuant to the Agreement, subject to obtaining adequate funding, Shineco expects to invest a total of US$500 million in its Life Science Industrial Park Project, US$100 million of which will be used in building Shineco’s Diagnosis and Treatment Center as part of the Project. In order to implement this Agreement, Shineco will seek to raise funds to be used for the Life Science Industrial Park Project. The cooperation marks the official launch of the Three-Year Development Plan of Shineco Yikang Digital Tumor Diagnosis (the “Plan”) and demonstrates the Company’s actions in practice.
Furthermore, Shineco would like to establish its digital tumor diagnosis and treatment platform to potentially connect a total of ten Shineco’s city-level tumor classification diagnosis and treatment centers and more than 90 district and county-level hospitals that would collaborate with Shineco’s tumor classification diagnosis and treatment centers in the future. At this moment, Shineco has formed its plan to build one Shineco Diagnosis and Treatment Center and may or may not construct the additional nine tumor diagnosis and treatment centers.
Through building an advanced medical laboratory, an oncologists group, and an internet hospital in the anticipated digital tumor diagnosis and treatment platform and Shineco Diagnosis and Treatment Center, the Company seeks to empower one public hospital in the central area of Weifang and establish a network of local hospitals to cover the population of 10 million people in nine cities and counties successively, which are under the jurisdiction of Weifang, such as Linqu, Anqiu and Qingzhou. Once the digital classification diagnosis and treatment model established, the tumor diagnosis and treatment platform and centers, if and when established, would allow patients in Weifang to benefit from high-quality medical resources and services locally, such as accurate early tumor screening, drug screening and other medical tests, professional diagnosis, and treatment, which are the same level as the top-tier hospitals in major cities like Beijing, Shanghai, and Guangzhou.
Setting up Shineco Diagnosis and Treatment Center as the first city-level tumor classification diagnosis and treatment center in Weifang demonstrates the Company’s optimism about the local business environment and superior medical facilities. There are more than 220,000 cancer patients in Weifang, with an increase of about 31,000 new cases every year. Once built and established, the Shineco Diagnosis and Treatment Center can provide early detection and diagnosis of tumors for 200,000 tumor medical tests and treat 100,000 tumor patients annually. According to a report conducted by China Jilin Network, the medical expenses of tumor patients was approximately RMB150,000 per person in China. Shineco estimated when its Center in operation, it is likely to reduce about 33% expenses to RMB100,000 per person, which would result in a total reduction of up to RMB5 billion in medical expenses for tumor patients assuming the Center would treat 100,000 tumor patients annually.
Not only did China’s 2022 Government Work Report mention the deployment of graded diagnosis and treatment, but it also did 14th Five-Year Plan. According to the 14th Five-Year Plan on Public Service Plan released by the State Council of PRC in 2022, the development of regional medical centers, core clinical specialties, and classification diagnosis system is the key to achieving balanced distribution of medical resources.
Upon completion, the Shineco Diagnosis and Treatment Center in Weifang will be a positive response to the 14th Five-Year Plan on Public Service Plan released by the State Council of PRC. Shineco initiated its tumor classification strategy in October 2021, following the Action Plan for Improving the Quality of Cancer Diagnosis and Treatment released by The National Health Commission of PRC (the “Action Plan”). The Action Plan indicated that the improvement of cancer diagnosis and treatment is one of the key work projects for local health departments between 2021 and 2024, and tumor diagnosis and treatment system should be incorporated into the construction of classification diagnosis and treatment system, which will further improve the treatment quality and benefit patients in China.
Upon completion, Shineco expects that the Center will introduce a large number of advanced technologies for tumor testing and treatment, including CTC circulating liquid biopsy equipment, drug sensitivity detection technology of patient derived tumor organoids (PDO), capsule endoscopy robots, PET medical imaging equipment, and digital PCR technology platforms, which are usually only available in top-tier hospitals in first-tier cities. Moreover, the empowered doctor group will greatly improve the local tumor diagnosis and treatment qualities in Weifang.
“This cooperation marks our progress of entering into the field of tumor treatment and the launch of our digital tumor diagnosis and treatment platform as we aim to build and establish one of the first digital tumor diagnosis and treatment platforms in China,” Said Ms. Jennifer Zhan, CEO of Shineco, “We are confident in our investment and believe that Shineco will use its best efforts to become an industry leader in pushing the general development of tumor classification diagnosis centers and relevant upstream and downstream industries. Our goal is to provide high-quality medical resources and treatment to tumor patients in China with affordable prices.”