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Medcom, the largest doctor platform in China, released its first annual report after listing: both revenue and profit increased

Original Zhang Xiaoxu arterial network

On March 24, MedicalLink, which is positioned as the largest online professional physician platform in China, released its first performance report after listing. In 2021, Medical Pulse achieved total revenue of 284 million yuan, an increase of 33.2% over the previous year; adjusted net profit of 107 million yuan, an increase of 25.4% over the previous year.

Doctors are the core resource in the healthcare industry, and their demand has also led to the creation of a number of doctors' platforms. Among these, the number of physicians registered with Medical Pulse has increased dramatically to 3.1 million in 2021, accounting for 75% of domestic physicians.

Can serving doctors support a listed company? According to data previously released by Medical Pulse, the company's revenue and profit have continued to grow since 2018. As a result, the 2021 performance continues this trend, and the doctor platform can also support steady performance growth. So, how is Medical Pulse building a business model around doctors' services? What new breakthroughs were there in 2021, and what momentum will follow? The Arterial Network explains this.

First annual report released, excellent results continued

For different types of users, Medical Pulse has built three types of solutions. Accurate academic marketing and enterprise solutions mainly serve pharmaceutical companies, medical institutions and research institutions, etc., providing digital academic marketing services for pharmaceutical companies, and SaaS services related to clinical trials (CRO) and real world research (RWS) for medical institutions, research institutions, etc.

Medical knowledge solutions can provide matrix-layout products such as clinical guidelines, disease knowledge bases, medical progress, medication references, medical videos, etc., to solve various problems encountered by doctors in learning, scientific research, and clinical practice, and to meet the needs of medical industry practitioners for professional medical information.

Intelligent patient management solutions include Internet hospital services, as well as patient management and education services launched in cooperation with non-profit institutions and pharmaceutical companies.

Relying on the common growth of the three types of solutions, Medical Pulse achieved a “double harvest” in terms of revenue and profit in 2021.

Growth in the performance of iMaitong, data sources: prospectus and 2021 annual report, map compiled by Artery Network

In fact, as shown in the chart above, judging from the published performance data, Medical Pulse has been growing in performance in recent years. Furthermore, the gross margin of Medical Pulse remained around 70%. Continued revenue growth and stable profitability are not only the confidence of Medical Pulse when sprinting into the secondary market, but also a solid foundation for its subsequent performance to the next level.

Continuously consolidate the three major capabilities, and accurate digital marketing solutions have become the main force for performance growth

Looking through the performance reports, it is easy to see that the reason why Medical Pulse has been able to create a steady and progressive situation is because it continues to upgrade and consolidate the capabilities of the three major solutions. In 2021, Medtech made breakthroughs in the three areas of pharmaceutical enterprise services, doctor services, and patient services.

▶ Accurate digital marketing meets the needs of pharmaceutical companies to reduce costs and increase efficiency, and has become the main force for revenue growth

Pharmaceutical reforms have prompted pharmaceutical device companies to urgently seek digital academic marketing solutions. Beginning in 2013, Medical Pulse introduced M3's “accurate” academic marketing system that continues to be successful in overseas markets. This is based on doctors' internet learning behavior data, and uses AI and other technology to outline doctors' basic and clinical decision perceptions to provide pharmaceutical device companies with integrated solutions including medical strategy formulation, digital content planning and production, accurate online education for target doctors, evaluation of educational results, and group image analysis.

In the 8 years since the introduction of an “accurate” academic marketing system, Medical Pulse has continuously cooperated with the world's top level original research devices and large local companies to implement full-life cycle solutions covering new products, growth period products, mature products, etc., and improved a “accurate” academic marketing system that meets the characteristics of the Chinese market and meets the academic needs of Chinese doctors.

Using this system, pharmaceutical companies can develop personalized medical strategies to meet the corresponding needs of head hospitals, lower back hospitals, and primary hospitals at different academic levels, and discover potential opportunities in academic marketing; especially for lower back and primary hospitals, this system has obvious advantages. There are many lower back and primary hospitals, the potential for patients in individual hospitals is small, the physical distance between hospitals is scattered, and offline representatives use traditional face-to-face visits, and the input-output ratio is extremely low. “Accurate” academic marketing is based on the platform matrix developed by Medical Pulse for 26 years and has attracted doctors over a long period of time, and has standardized the academic education level of pharmaceutical companies. At the same time, through doctor portrait engines and research, an “accurate” academic marketing system can continuously obtain doctors' learning behavior and phased cognitive results, making academic marketing results more visual.

Since accurate digital education can be targeted to specific hospitals, departments, and job title dimensions, pharmaceutical companies can clearly see the education costs invested in each target hospital and can better evaluate the input-output ratio of education. This brings better choices for mature prescription drugs to further explore the grass-roots market under the influence of volume procurement, and for innovative drug products that have drastically shortened the window period due to volume procurement to quickly cover the entire Chinese market.

Medical Pulse is an accurate digital push model for medical information based on doctor portraits. Image source: Public Information

The growth of “doctors involved in accurate academic marketing” by Medical Pulse. Data source: Prospectus and 2021, Arterial Network collated and mapped

In “accurate” academic marketing services, one of the most important operating indicators is the number of “doctors involved in accurate academic marketing”. This indicator refers to the total number of people in pharmaceutical companies that accurately designate target hospitals, departments, and doctors to continuously provide online education to target doctors over a long period of time. As can be seen from the figure above, from 2018 to 2021, more and more doctors can regularly and continuously receive digital academic education from pharmaceutical companies. This data also reflects the high appeal of the Medcom platform to doctors, and the medical pulse scientific and systematic academic marketing design has developed the habit of doctors learning clinical knowledge online and receiving education from original pharmaceutical companies.

In 2021, Medcom will integrate various service models to establish capabilities based on one-stop digital clinical research platforms, Internet hospitals, electronic data collection (EDC) solutions, and remote intelligent clinical trial (DCT) solutions. Medical Pulse also combines RWS delivery with digital marketing, effectively combining RWS evidence generation with evidence-based digital marketing; the module has been successfully applied to RWS support solutions in the fields of oncology, hematology, nephrology, etc.

Thus, Medcom can provide services including project management, clinical monitoring, data management, biostatistics, program design, medical monitoring, patient recruitment and support systems in a one-stop digital clinical research platform.

Thanks to the increasing digital marketing capabilities, in 2021, the number of customers and products served by MedicalLink increased dramatically. Corresponsively, precision marketing and enterprise solutions also brought impressive returns, achieving revenue of 259 million yuan, an increase of 34.9% over the previous year. At the same time, revenue from precision marketing and enterprise solutions accounts for 91% of the company's overall revenue, making it the main force for performance growth.

The growth of precision marketing and corporate solutions of Medcom. Data sources: prospectus and 2021 annual report, arterial network compilation and mapping

▶ Doctor-side products have been expanded and quality improved, and core users have increased dramatically

Doctor users are the most important user group and core user resource of Medical Connect. Attracting more doctors to use it, increasing doctors' professional recognition of the platform, and promoting doctors' activity on the platform directly affects the sustainability of the MedicalLink business model; MedicalLink mainly achieves these goals by improving medical knowledge products, including expanding the coverage of medical knowledge, optimizing the quality of medical knowledge, and improving doctors' user experience.

Previously, after years of accumulation, Medical Pulse had created content and tool products widely used by doctors, such as clinical guidelines, medical literature king, medication references, and a complete medical dictionary.

In 2021, based on the cancer disease knowledge database, Medtech expanded clinical decision support products to diseases such as cardiovascular, endocrine, vestibular medicine, and neurological diseases; expanded the knowledge content of products such as disease knowledge base, clinical guidelines, latest medical advances, medical videos and drug information. Among them, clinical guidelines increased by about 50%, and medical videos increased by about 193.4% to 43,000.

In addition, in 2021, Medtech also launched a new “Medical Search” platform for pharmaceutical professionals to provide valuable medical knowledge content at home and abroad through an AI-enabled search engine to meet users' comprehensive, accurate and efficient search needs.

In recent years, various Internet platforms involving healthcare have fiercely contested doctors. Especially since Internet medical treatment was recognized and encouraged by the country, “attracting new and revitalizing” doctor users has become an important task, whether on large platforms or small to medium platforms. In addition, public hospitals are also vigorously launching their own Internet services. Therefore, it is not easy to attract more doctor users and seize more time for doctor users. If doctors are encouraged to register and use only through material incentives, it essentially allows doctors to “passively” become users, and meeting doctors' lifelong learning and growth needs through continuous updates of medical knowledge and tools can promote doctors to actively become platform users.

Medtech's further accumulation in medical knowledge services has also been reciprocated: the number of registered doctor users on the platform increased from 2.4 million at the end of 2020 to 3.1 million at the end of 2021; according to the “2021 China Health Statistics Yearbook”, the total number of practicing physicians in China is 4.085,700 (including assistant practicing physicians). Based on this calculation, about 75% have become Medcom users. At the same time, in the fourth quarter of 2021, the average monthly active users of iMaitong reached 1.61 million, an increase of 56% over the previous year.

Most of the medical knowledge content provided by Medical Pulse is free for users to use. Some high-quality or up-to-date content requires payment, including two models: membership fee and single download payment. Thanks to the expansion of content coverage and quality improvements, both active users and paid doctor users continued to grow in 2021, which fully reflects doctors' recognition of the value of medical knowledge.

▶ Patient-side products complete key links and can directly reach the C-end

In terms of patient services, it is different from the “drug sales” model of some Internet hospitals with all types of diseases and low profit margins; Medical Connect relies on extensive doctors' resources on the platform to provide doctors with “help management, help professionalism, and help income”, and provide patients with an integrated doctor-patient management model that “enhances doctor-patient interaction, improves disease awareness, and increases treatment compliance”.

Since the launch of the Internet Hospital in 2021, in less than a year, the Medical Pulse Patient Management Platform has accumulated 115,000 users, attracted 35,000 doctors to practice online, and built 6 single-disease management service platforms for breast cancer, lung cancer, lymphoma, Parkinson's disease, stroke, and diabetes.

On the single-disease patient management platform, from improving doctors' clinical awareness to improving patient adherence to treatment, this provides new sales growth strategy points for pharmaceutical device companies struggling with volume procurement. As solutions continue to mature, more and more companies are choosing single-disease patient education solutions. Furthermore, the continuous enrichment and enrichment of patient management platforms also provides the possibility for more efficient and sustainable development of patient recruitment for clinical trials and real-world research.

Closer business collaboration to reinforce competitive barriers

Medical Maitong continues to consolidate the service capabilities of doctor services and pharmaceutical companies, and also improves patient services, so that the three can collaborate with each other. In a collaborative relationship, doctors, pharmaceutical companies, and patients are the main participants, both users and payers, and contributors of content or resources, creating value for other participants, while Medical Connect uses their ability to integrate medical knowledge, technical ability, etc. to become a hub for maintaining these relationships.

First, doctor resources are the foundation. Using doctor resources, we can not only provide digital marketing services for pharmaceutical companies, but also provide patients with online consultation and disease management services.

According to the 2021 report, Medical Connect will further enrich the content of medical knowledge, continue to upgrade technology, and provide more support for doctors on their path to practice. For example, continue to build a knowledge map and optimize the search and recommendation functions of “Medical Search” through semantic and contextual links. Medical Pulse is also developing a single-disease clinical decision support system to provide intelligent decision services including diagnosis, intelligent warning, and treatment recommendations.

In addition, Medical Connect also plans to expand coverage of primary doctors to provide tailored solutions for doctors in county-level hospitals and primary medical institutions.

These initiatives are expected to once again expand the scale and activity of MedicalConnect's doctors' users, thereby consolidating the digital marketing of pharmaceuticals and patient service capabilities.

Second, cooperation with pharmaceutical companies can provide doctors with timely and rich medical knowledge and help doctors make decisions more effectively.

According to the prospectus, most of the top five customers of Medcom in recent years are Chinese companies that are multinational pharmaceutical companies. According to the plan, medical device companies, domestic innovative pharmaceutical companies, and pharmaceutical companies that are greatly affected by the collection policy are also key expansion targets of Medical Connect. According to the 2021 annual report, Medical Pulse has further expanded more digital solutions, and the range of service products has also expanded to fields such as device products, early screening and testing products, and bioinnovative pharmaceutical products. It is foreseeable that as the types of pharmaceutical enterprise segments covered by Medical Pulse increase, the dimensions of medical knowledge that can be provided to doctors will be wider, and doctors will be able to obtain more comprehensive and cutting-edge medical information from it.

Finally, patient service data can provide pharmaceutical device companies with more end user and R&D data, and provide doctors with a more convenient practice platform.

Although the services provided directly to patients by Medical Connect have just begun, in the long run, there is a broad scope of value for patient services.

Medical Pulse proposed in its 2021 report that Internet hospitals will launch chronic disease management services for more diseases in the future.

In the future, as the number of patients grows, clinical trial recruitment will be more efficient. At the same time, Medical Pulse has built a DCT platform to enable remote clinical monitoring, so that clinical trials are not blocked by the epidemic, and the burden on patients can also be reduced. In addition, Medical Connect can replicate the doctors' portrait construction experience to the patient side. After accumulating a certain number of users, it digitally markets OTC drugs to the C-side to generate incremental revenue.

As can be seen, the above synergy is intertwined to form a virtuous cycle. As the scale of Medtech's operations grew, partnerships became closer, and barriers to competition were further strengthened.

With a market size of 300 billion, has the business model worked?

Any sustainable business model requires growing market demand and stable payers. Judging from the revenue structure of Medical Pulse, pharmaceutical companies have become their main and stable payers based on accurate digital marketing and enterprise solutions.

Currently, China's pharmaceutical device sector is in a period of rapid transformation: innovation is intensifying, more and more innovative drugs and innovative devices are being approved for sale and entering the commercialization stage; traditional marketing channels and distribution channels are being challenged. Under the trend of normalization of health insurance negotiations and procurement, pharmaceutical companies must accelerate their market occupation or consolidate their market position through various channels. Digital marketing with higher efficiency and lower cost will undoubtedly become a necessary option for more pharmaceutical companies. According to Frost & Sullivan's report, the domestic pharmaceutical digital marketing market is only 15.2 billion yuan in 2020, and is expected to reach 363.3 billion yuan by 2030.

However, the digital marketing model is still being developed. The marketing effectiveness of different platforms varies greatly, and in-depth industry understanding is required to have better judgment, so many pharmaceutical companies are still on the sidelines. As the first doctors' platform to enter the secondary market, Medtech's performance data shows the viability of its business model. Facing the broad market space in the future, the task of Medical Maitong is not only to achieve growth in its own performance, but also to show industry value to companies that are still on the sidelines through exploration and innovation; in the future, driving the industry to run its business model will be more meaningful than simply verifying its own business model.

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