Strategy Note /

Genetron Health's self-developed mutation capsule differentiates it from others

  • Genetron Health's impressive performance also results from its double-track operation mode

  • The global population has had higher overall cancer incidence rates, stimulating the rising cancer diagnostics market

  • The firm still encounters major challenges from other top players, China's economic issues and the immature market

27 May 2021
Published byEqualOcean

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Since the outbreak of COVID-19, new public health systems and advanced biotechnology have been swiftly hyped up. Genetron Health has been able to generate a surging revenue in these special social circumstances.

How gene therapy is changing lives

Genetron Health has lately attracted increasing attention from investors. Consequently, it went public on Nasdaq in June 2020, raising a total of USD 0.26 billion, which is the largest to date IPO in the precision medicine sector of the global cancer treatment market. After this IPO, the medical company's share prices fluctuated but presented an upward trend in general, with a peak of USD 30.64 in early February 2021. 

Founded in 2013, Genetron Health started its businesses from conducting brain tumor research and product development. Based on molecular biology and extensive data analysis, the firm developed a comprehensive product and service line, including early cancer screening, treatment recommendation, monitoring, and prognosis management. In 2021 spring's early cancer screening seminar hosted by Science magazine, the firm introduced its Mutation Capsule technology that can capture cell-free DNA's methylation and mutation simultaneously.

COVID-19 did not affect Genetron Health's profitability

2020 was a significant year for Genetron Health that saw it achieve good performance in its three main sectors, even during the outbreak of COVID-19. The company achieved a YoY growth rate of about 31.3%. To be more precise, it generated 72.01% of the total revenue from laboratory-developed test (LDT), appearing as the most prominent business segment in the last few years. However, the in vitro diagnostics (IVD) segment showed the highest increase rate in the past few years, with an average of 31.65%. 

The firm's anti-risk capability came from its completed business layout. It started from LDT then evolved into a double-track mode of LDT and IVD. Thanks to this double-track service, Genetron Health's gross profit margin is also increasing, and its revenues are expected to reach CNY 620 million in 2021.


External opportunities for development 

The medical firm's quick progress could not be realized without external support from substantive market opportunities of early cancer screening and the increasing number of cancer cases. As for the cancer diagnostic market size, it is expected to reach USD 14.76 billion by 2023, in which North America is still the region containing most of the profits. The rising market size for cancer diagnosis may be due to traditional cancer screening's degradation, which has lower sensitivity. Hence, Genetron Health caught up with the increasing trend of early cancer screening and realized huge profits. For instance, most of LDT's revenues were from HCCscreen specializing in liver cancer screening in 2020's fourth quarter. 

Secondly, the number of new cancer cases is still increasing. As GLOBOCAN predicted, the number of cancer cases will rise 47.15% from 2020's 19.3 million units to 2040's 28.4 million units. Under the massive increment, offering an early cancer diagnosis will become more critical, expanding the market through intersectional medical corporations among different companies. 


Genetron Health's unique strategies

Except for the above beneficiary factors, the medical company also has its customized solutions to face intense competition. Its first strategy is...

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