As a digital solution provider focused on the pharmaceutical and medical device industry in China, we design and deliver industry-specific software and digital services that facilitate the research and development (“R&D”) as well as commercialization of pharmaceuticals and medical devices.
The software we offer is cloud-based, allowing users to access it from various devices at any time over the internet, without the need for software installation and maintenance on their devices. These cloud-based software covers critical use cases in R&D and commercialization of innovative drugs and medical devices. For instance, our software facilitates the planning, tracking and monitoring of site and trial-related activities, and streamlines the management and filing of clinical research documents. Our software can also be used for patient recruitment and follow-up, data collection and analysis, as well as sales relationship management, to help our customers conduct their R&D and commercialization activities more efficiently and swiftly. In addition to software, we also provide a range of digital services, primarily assisting customers with independent reading of medical images, achieving efficient site management organization (“SMO”) resource distribution and execution, offering pharmacovigilance services and other services to support our customers’ R&D and commercialization activities. These services typically integrate the capabilities of our corresponding cloud-based software and platforms, delivered by our service personnel. By choosing our digital services, customers can leverage our service personnel who are well-versed in our software to fulfill their needs with consistent quality and no additional staff overhead. During the Track Record Period, we generated 42.3%, 38.4%, 35.2% and 34.3% of revenue from the sales of our cloud-based software in 2021, 2022, 2023, and the three months ended March 31, 2024, respectively, and 57.6%, 61.6%, 64.5% and 65.7% of revenue from the provision of digital services during the same periods, respectively.
Our cloud-based software includes both SaaS products that are standardized and can be nimbly deployed via public cloud, and customized, non-SaaS products tailored to our customers’ specific requirements that are typically locally deployable via private cloud. During the Track Record Period, the majority of our revenue from cloud-based software was derived from SaaS products. SaaS, or Software as a Service, is standard software that is hosted centrally by a provider and made available to multiple customers simultaneously over the internet. SaaS products are typically charged on a subscription basis. On the other hand, our customized products, which typically reside on a private cloud infrastructure operated solely for a single customer, are charged by project development workload, and our digital services are charged based on the actual services delivered.
Our SaaS products and digital services are primarily offered through our two digital collaboration platforms, namely TrialOS and PharmaOS. Our digital collaboration platforms serve as hubs, connecting various stakeholders in the pharmaceutical and medical device industry, including pharmaceutical and medical device companies, hospitals, third-party service providers, patients, and regulatory authorities. As more users integrate our products and services into their workflows, they develop strong loyalty and face high switching cost from our platforms. We also gather industry insights to enhance our offerings, opening doors for cross-selling opportunities. In 2023, over 77% of our total revenue came from customers using three or more of our products or services. We are the only domestic digital solution provider that can deliver a one-stop digital solution from R&D to commercialization for the pharmaceutical and medical device industry in China, according to CIC.
Our customers primarily comprise pharmaceutical and medical device companies, as well as third-party service providers like contract research organizations (“CROs”), and clinical research institutions. The number of our customers increased from 908 in 2021 to 1,033 in 2022, and further increased to 1,107 in 2023. The number of our customers was 893 and 867 in the three months ended March 31, 2023 and 2024, respectively. During the Track Record Period, we experienced continued revenue growth, with our total revenue increasing by 17.8% from RMB466.2 million in 2021 to RMB549.2 million in 2022, then further increasing by 4.4% to RMB573.1 million in 2023, and continuing the upward trend with a 2.2% rise from RMB129.2 million for the three months ended March 31, 2023 to RMB132.1 million for the three months ended March 31, 2024.
Our Solutions
Our solutions for the pharmaceutical and medical device industry consist of cloud-based software, including SaaS products and customized products, and digital services. Our SaaS products and digital services are primarily offered through digital collaboration platforms, including TrialOS and PharmaOS, while our customized products are mainly hosted on a private cloud, in-house infrastructure, rather than through TrialOS or PharmaOS. The following diagram illustrates our main products and services: Digital Collaboration Platforms We have developed and launched two major digital collaboration platforms to support the R&D and commercialization of pharmaceuticals and medical devices:
‧ TrialOS — Our digital collaboration platform for pharmaceutical and medical device R&D launched in 2019. With TrialOS, staff from pharmaceutical companies, hospitals, CROs, and other relevant parties can easily manage and use our cloud-based software products and digital services by logging into TrialOS through its website or mobile application and clicking on the relevant icon. They can access the latest information and collaborate online to drive clinical research using digital technologies. TrialOS is designed to achieve efficient data transfer, seamless process collaboration, and standardized workflow organization, thereby breaking down information barriers between different products and services and across the industry chain. It has both Chinese and English interfaces, enabling both domestic and overseas user outreach, and integrates crucial data such as clinical research institution specifications sourced from CDE, digital SMO partner information, and information related to independent imaging review and pharmacovigilance, providing comprehensive visibility that enhances user decision-making and operational efficiency.
‧ PharmaOS — Our digital collaboration platform for pharmaceutical and medical device commercialization launched in 2021, which supports various cloud-based software and digital services that facilitate the commercialization efforts of pharmaceutical and medical device companies. PharmaOS offers flexible, easy-to- use development tools, such as workflow engines, form engines, data modeling, and tag modeling, providing our customers with a comprehensive set of pharmaceutical and medical device commercialization cloud-based software accessible via both website and mobile applications. It adopts a unified data structure for all master data, including hospital and doctor information, as well as channel flow data. Leveraging such structure, it streamlines the utilization of industry master data, including hospital and doctor information, sourced from various public sources such as official websites of hospitals and regulatory authorities like National Health Commission of the PRC. It also helps our customers to effectively manage their distributors and sales teams, achieve transparent drug channel flows, gain clear customer insights, optimize customer relationship management and visualize sales activities, all of which contribute to driving efficient commercialization, through the utilization of our pharmaceutical and medical device commercialization solutions.
Furthermore, we have been developing next-generation digital collaboration platforms, including Trials and Wujie. Trials is designed specifically for the pharmaceutical and medical device R&D field. It features a new client-side interface and conversation-based interaction, which is expected to provide a more intuitive user experience and facilitate rapid collaboration, further breaking down artificial barriers between different software and services, and focusing on users’ needs for external collaboration and process management. Through our self- development, Trials has evolved from its 0.1 version that established a core framework for project and trial master file management, to its 0.2 version which introduced features like progress planning, instant messaging, and task collaboration for clinical trial management. Currently, it is being further developed to add additional functional modules, and is expected to launch in late 2024. To adjust and augment PharmaOS’ pharmaceutical and medical device commercialization capabilities, we developed Wujie, another next-generation platform, to complement but not replace PharmaOS. Wujie, which was launched in the second half of 2023, specializes in achieving greater external outreach to doctors via both online and offline channels.
Our digital collaboration platforms not only serve as the foundation of our solutions, but also provide us with valuable industry insights that help us continuously improve the functionality and quality of our solutions to meet the ever-expanding and diverse needs of our customers. For further information of our digital collaboration platforms, please refer to “Business — Our Platform Strategy.”
Cloud-based Software
Based on our digital collaboration platforms, we have built a series of software for different types of organizations and roles and covering critical use cases in pharmaceutical and medical device R&D and commercialization. For instance, our software facilitates the planning, tracking and monitoring of site and trial-related activities, and streamlines the management and filing of clinical research documents. Our software can also be used for patient recruitment, patient follow-up, data collection and analysis, as well as sales relationship management, to address the challenges faced by industry participants and improve workflow efficiency. The software that we offer are hosted by a central provider and offered to customers via cloud service, instead of running locally on our customers’ devices with no network connection. We offer our SaaS products through TrialOS or PharmaOS, which leverage public cloud service to deliver our SaaS products via the internet across organizations. We also offer our customized products primarily via private cloud service, which reside on a single organization’s in-house infrastructure instead of utilizing TrialOS or PharmaOS.
For our cloud-based software, we generally recognize the revenue over the contract term since our delivery of products and in accordance with our customers’ consumption of products or at a point of time when such product is delivered to and accepted by our customers. During the Track Record Period, the majority of our revenue from cloud-based software was derived from SaaS products. In 2021, 2022, 2023, and the three months ended March 31, 2023 and 2024, 42.3%, 38.4%, 35.2%, 36.1% and 34.3% of our revenue was generated from the sales of our cloud-based software. For our SaaS products, generally, we recognize the revenue over the contract term since our delivery of products and in accordance with our customers’ consumption of products. Specifically, (i) for eImage/IRC, recognition is based on the number of imaging review endpoints provided to customers; and (ii) for other software, recognition is based on the contract term. For customized products, revenue is generally recognized at a point in time when customized products are provided to the customer and accepted by the customer.
Digital Services
Based on our understanding of the industry and to better cater to the demands of different types of customers, we also provide our customers with a range of digital services, primarily assisting customers with independent reading of medical images, achieving efficient SMO resource distribution and execution, offering pharmacovigilance services and other services to support our customers’ R&D and commercialization activities. These digital services are based on our digital collaboration platforms and linked with SaaS products to enable online operation, monitoring and management for improved efficiency and quality. By offering digital services, we further accumulate industry knowledge and insights, which helps enhance our capability to optimize our platforms and software products.
For our digital services, we recognize revenue over contract term since our delivery of services and in accordance with the progress of our service obligation performance. In 2021, 2022, 2023, and the three months ended March 31, 2023 and 2024, 57.6%, 61.6%, 64.5%, 63.9% and 65.7% of our revenue was generated from the provision of digital services.
Benefits of Our Software and Digital Services
Pharmaceutical companies, as the owners of pharmaceutical products and sponsors of clinical trials, are our major customers. The benefits we provide to pharmaceutical companies and third-party service providers include:
‧ Designed for complex pharmaceutical and medical device use cases. Our software and digital services are designed to tackle the key processes and bottlenecks in pharmaceutical and medical device R&D and commercialization use cases. Through standardization, visualization, and automation of previously manual process, we aim to significantly improve the efficiency and quality of pharmaceutical R&D and commercialization, while reducing operational costs and risks and ensuring regulatory compliance.
‧ Seamless collaboration. Pharmaceutical R&D and commercialization involves significant cross-organizational and cross-role communication and collaboration among various stakeholders. Our TrialOS and PharmaOS platforms connect all parties in the pharmaceutical R&D and commercialization process and enable them to collaborate effortlessly online by breaking down the barriers between them through efficient data exchange and process coordination.
‧ Improved data analytics and insights. Our products and services support pharmaceutical companies, CROs/SMOs or hospitals in key stages throughout the entire R&D and commercialization process. Massive data are generated and managed on our platform. Our platforms allow data to flow among products and organizations using unified protocols. Our customers are able to drive the holistic process with data and improve the quality and efficiency of their research or marketing activities on our platform.
Source: Taimei Medical Tech (02576) Prospectus (IPO Date : 2024/09/27) |