N types of money making methods in in vitro diagnostic industry

Medicine Network May 22 hearing Antu Biology is a reagent company? Is not a diagnostic instrument? This is the way to make money from the in vitro diagnosis of the industry.

What is in vitro diagnosis? It is the detection and diagnosis outside the patient. Nonsense.

It is mainly to obtain samples from the patient, and then perform a series of biochemical and pathological experiments to obtain indicators that assist the doctor in diagnosis. Well, that is the diagnostic test sheet.

So, how to make money in vitro diagnosis, of course, you do a bunch of tests Huyou friends. Amount, this is the routine of the hospital. Serious in vitro manufacturers how to make money?

First, it needs to sell instruments to hospitals or now emerging third-party testing organizations. Such detection instruments, especially large-scale instruments, are not cheap, some directly go to millions, and one that earns 10 million is not a problem. We don't open a business for three years.

However, you also know that for three years, you don’t want to open. This kind of instrument is generally used for decades. Did you drink the Northwest wind in the middle?

It can be sold to more hospitals, but hospitals that require large instruments are always limited, not to mention there are other homes competing.

At this time, we must look at the second profit method, sell test reagents.

What is a detection reagent? Photoorganic devices, which cannot produce results, require reagents that are matched with them. They are usually antibodies, buffers, and the like. They are collectively referred to as consumables.

Consumables, that is, once it is gone, so many patients in the hospital, supplies are used up, we must buy again, or else the machine becomes furnishings. As long as the hospital is using its own machine, then the consumables orders are endless, like sitting down Rent collection, is not very happy?

When it comes to supplies for biochemical experiments, there is a big difference between hospitals and research institutes. When I read Bo, many reagents in the laboratory must be allocated by myself in order to save money. The hospital is different, most things are Buy ready-made, why? First, the doctor's specialty is medical care, there is no special professional biochemical training, it is impossible to own all things, optimize themselves. Second, hospitals are generally not bad money. So the general hospital use things Both are better than research units.

This has caused the supplies that are sold to the hospital to be very profitable. Considering the large amount of usage, the company can make much more money on consumables than the instruments.

In this way, we can easily understand why Antu's reagent class is the bulk.

However, selling reagents is a dangerous business, why? Because its moat is far from the instrument.

For small companies, they can't make machines, they can't deserve reagents? Even when I work in a lab, I'm going to do it. Therefore, some small companies will talk to the hospital: 'Our reagents can be used, too. At half the price, I only receive 40% of the money. The rest, meaning mean, is pure joke. Don't take it seriously.

Like we are in the lab, buying imported instruments, using homemade reagents, or self-assembling reagents is perfectly normal. If this is the case, it would be hard to sell an instrument, drink soup, and be licked by others. Go, can you endure?

How to ensure the use of their own reagents?

In general, there are 2 sets of methods:

1, Depressing prices, disguised raising industry barriers, only large-scale enterprise In order to be profitable, but generally speaking, it is not forced to a certain extent, companies are reluctant to do so, after all, reduce their own income (gross margin)

2, reduce the compatibility of reagents, so that only their own reagents can be used on their own machines.

But doing so is very dangerous. You didn't see Apple Computer that year because of poor compatibility. It was replaced by a PC. If you really want to do this, you need to have a good balance.

1) If some of your own instruments are only one, and they are relatively high-end, it is very expensive and troublesome to repair. Then your own reagents can be sold at a higher price. No one dares to take this risk;

2) If it is a very common instrument, then a certain difference design can be made on the module, or a closed design, so that other family's reagents can not be used in your home;

3) Make your own instruments form a one-stop service, so that customers face greater conversion costs.

So, how does Antu perform in the reagents field? How does it do to avoid competition from other vendors? We can get a glimpse of the report.

First, let's take a look at the division of operating income of Antuo:

Isn't it surprising? As an 'instrument' company, the revenue from selling reagents is almost 10 times that of selling instruments? In 2016 it was even close to 30 times! This shows that our previous analysis is right, the main profit of in vitro diagnostics is actually reagents. Consumables. However, the year-on-year growth in reagent consumables revenue in 17 years is far behind the growth of the instrument. This is mainly due to the fact that the growth of reagents lags behind that of the instrument. In 2018, it may be a good harvest year.

Combined with the operating costs, we can see that in 2016, instrumental gross profit is about 37%, and reagents are about 75%. How is reagents more profitable than instruments?

In 2017, instrumental gross profit was 25%, and reagents were 76%. It still relied on the profits of reagents to maintain high profit growth.

Second, we take a look at its cash flow:

What do we see in this cash flow? Isn't the graphics very attractive? Is it smooth and perfect from low to high?

Are you kidding? Is this a reliable analysis?

Yes, we have to look at the picture is not smooth. How to say it? If you sell instruments, after all, equipment sales can not be every day, often three years without opening, open for three years, then the cash flow should be What should it look like? Like diving medical in the image below, there is a wide gap between the levels, and it is not smooth at all. And the reagents of Antuo account for the main proportion of revenue, reagents, low unit price, selling and flowing, cash flow The picture naturally gets a lot smoother.

So, how did Antu seize the reagent market?

Just now we have calculated that the gross profit margins of Antu biological reagent products in 2016 and 2017 were 75% and 76%, respectively. It is clear that it did not gain market through price war.

To study the products of Antuo, we have found that it has some unique, relatively high-end products. The reagents for these products are not easy to make, and they are usually made into closed modules.

1) The core product of Antu Biologicals this year: Magnetic particle chemiluminescence reagents. This is a relatively new detection method, both sensitivity and linear range are better than traditional enzyme-linked immunoassay. And it is easy to operate. In developed countries, chemiluminescence It accounts for more than 90% of the market segment, and only about 40% in China. Therefore, Antu Bio has found a good entry point. Its revenue from chemiluminescent emission of magnetic particles has increased from 7.61 million in 2013 to 3.9 billion in 2016. The three-year compound growth rate is as high as 370%. Except for Antu, only Roche abroad, Beckman has this product, but Antu's price is only about half of the imported products.

2) Microbial detection based on mass spectrometry. Traditional methods for microbial detection require long colonies and take a long time. The identification method based on mass spectrometry can give identification results within minutes. It is of great significance for epidemiology. In this field, Antuo is at the leading position in China. Antu automatic micro-organisms mass spectrometry detection system is the first set of domestic micro-organisms mass spectrometry detection system with matching microbiological database and clinical sample testing qualification and large-scale promotion.

3) Streamlined product solutions. In the past, most domestic manufacturers only sold a single type of instrument. Only foreign manufacturers, such as Roche and Abbott, had a complete assembly line solution. Antu was the first domestic manufacturer to enter the TLA line in China and bought it. This set of lines will allow hospital With a complete set of diagnostics and testing methods, it is not necessary to buy a variety of instruments separately. Naturally, Antu can also sell its own reagent products through a complete assembly line.

Therefore, we can see that Antu is a company that is based on instrument research and development and makes money through reagents. It provides a full range of services through the development of leading-edge instrument products. It leads the instrument diagnostic market and continues to sell its own products in the leading field. The reagent consumables bring a huge profit return.

Then we compare Antu Biology with several other in vitro diagnostic equipment companies:

It is the first company in the country to develop a fully automatic tube chemiluminometer. By comparison, pre-Antu products are semi-automatic plates. Automated tube chemistry, regardless of sensitivity, specificity, and ease of operation. The luminometer is one grade higher than the semi-automatic plate type, and the fully automatic tube type consumables are sold more expensively. The new industry ranks first in terms of the installed capacity of fully automatic tube chemiluminometers.

Mike entered the in vitro diagnosis earlier, and has a history of 20 years. Therefore, his product line is relatively abundant, from high-end chemiluminescence to simple blood type testing. Because early products account for a large proportion, this leads to The share of chemiluminescence products is relatively low. However, considering the accumulation of sales channels brought about by Mike's deep-seated industry for 20 years, its high-value-added chemiluminescence business may grow rapidly. Currently, in fully automated tube-based chemiluminescence, Mike's possession of equipment occupied second place.

Antu also has a relatively old history. It used to be a semi-automatic plate type chemiluminescence faucet. Later it switched to a fully automatic tube type. Therefore, Antu can easily promote its own new products when upgrading its old customers. And, Antu The mass spectrometry diagnosis and assembly line solutions have a leading position in China.

Since the new industry was previously listed on the New Third Board and is now delisting, it is seeking an A-share listing, so the data is incomplete. Mike Bio and Antu Bio have their own advantages and disadvantages. Because of the different proportion of new product lines, the gross margin of Antu , Net profit and ROE are significantly higher than that of Mike Bio, but valuations, Antu is currently higher, and Mike is still in an underestimated range.