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News Oct 21, 2018 05:10 pm EqualOcean

12Sigma and Ali health held a signing ceremony, the force of medical AI + Internet of things

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Sep 16, 2019 09:10 pm ·

Linking Med Gets Class III, Paving the way for Monetization for the Rest

In August this year the National Medical Products Administration (NMPA) issued a Class III type license to Linking Med (连心医疗), a Beijing-based medical-cloud company that focuses on the processing of oncological medical images. The licensing will facilitate the company’s commercialization of its cloud solution. The first-of-its-kind license is of enormous importance, since it brings the possibility for the other AI-and cloud-driven medical companies to monetize their products.   The company’s cloud solution, which was licensed by the NMPA, has already landed in more than 50 hospitals, serving over 2,000 people per week; since the license was obtained, the cloud-provider has been negotiating the price with hundreds of hospitals, according to VCbeat, a Chinese media organization. NMPA, the regulatory department responsible for the permission and licensing of Class III-type products, took over the duty from the China Food and Drug Administration (CFDA) in 2018, after a major regulatory update by China’s State Council in 2018 that merged the CFDA and several other departments into the NMPA. From 2018 onwards, NMPA has been the official entity that directly reports to the State Council. The medical cloud provider has been generating its revenue from third-party services to the hospital’s radiotherapy departments in China. Since the country has structural problems in cancer treatment that are due to excess demand on very scarce resources, medical cloud and remote consultation have been showing potential as one of the best integrated solutions to the problem, which is Linking Med’s focus. (Check out this in-depth article on China’s structural problems in healthcare). Linear Capital (线性资本) backed health-tech company’s licensing success is good news for the rest of the industry, especially for those who have a medical cloud system that is supported by machine learning and AI. Founded in early 2016, VoxelCloud (体素科技) is one of those companies who provide intelligent cloud systems. Yet another example is 12Sigma (图玛深维), a Jiangsu-based Medical AI developer known for its lung and breast cancer-related MI diagnosis product. Several industry experts have argued that ‘Chinese regulators will not provide a Class III-type of license to any AI-driven medical product in the short-term,’ yet this licensing event shows that the regulators in China are not as ‘conservative’ as some expected. Indeed, it may be just be a beginning for the entire IT and big data-driven healthcare services scene in China. “2019 may be a heaven for monetization in China’s medical AI scene,” once said the CEO of deepwise to EqualOcean. Perhaps he is right in his optimism. 

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Jun 17, 2019 11:20 pm ·

Tencent Miying Debuts New AI Medical Image Reading Tech

On June 16th, Tencent Miying (腾讯觅影), the medical image reading platform of Tencent, and Wang Ningli (王宁利) research team from Tongren Hospital (同仁医院) debuted their latest technology in early-stage glaucoma screening on the 13th conference held by China Medical Doctor Association and eye doctor chapter in Zhengzhou. Dr. Wang Ningli asserted that early-stage glaucoma screening is the best approach to prevent vision loss caused by glaucoma. The new technology employs AI tech to screen and detect early-stage glaucoma and the accuracy is claimed to exceed 95%. Diagnosis glaucoma at an early stage can help doctors to intervene in the progress of vision loss. The AI screening technology could shed some lights to China’s eye disease diagnosis, prevention, and so the treatment. The tension caused by the shortage of China’s medical resources and unbalanced allocation can be soothed by the new AI medical image reading technology. The top three vision loss reasons are cataracts, glaucoma, and macular degeneration. However, at the current stage, eye-disease-related AI medical image reading technology mainly focuses on diabetic retina exam and glaucoma screening. Compared with curable cataracts, which can be cured by cataract surgery, glaucoma-caused vision impairment is inevitable. Hence, early-stage diagnosis of glaucoma and prevention are critical for potential glaucoma patients. Yet the glaucoma AI screening technology has not been widely applied, the diabetic retina exam has been installed in some clinics and hospitals for trials and assisting doctors in diagnosis. As the same as glaucoma, diabetic retinopathy impairs vision, which is also an inevitable process. Vision impairment caused by the two is a chronical process and it is often too late to be treated when patients discover that they have lost vision. The AI medical image reading aims at the efficiency and accuracy of medical image reading, and ultimately improves the accessibility of healthcare services from region to region in China. For medical image reading AI companies, most matured image-reading technology at the stage is pulmonary diseases, then liver and eye diseases. 12Sigma, Infervision, Airdoc, Deepwise, etc. all have image reading solutions in above-mentioned fields. Tencent Miying is a function of Tencent’s AI development department. Tencent is officially appointed as one of the National Open Innovation Platform for Next Generation Artificial Intelligence on computer vision for medical AI by China’s Ministry of Science and Technology. China has four more open innovation platforms designated for different fields: Baidu focused on autonomous driving; iFlyTek is assigned to voice intelligence field; Alibaba is tasked with “city brains”; SenseTime is the open innovation platform for computer vision

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Apr 30, 2019 02:46 am ·

Chinese Had Profitable Exchanges of Privacy; Now, Doing the Same in Healthcare

A proposal by Robin Li (李彦宏) -founder of Baidu (百度) and an influential figure amongst China’s policymakers- yet again attracted the attention to the Medical Cloud. He thinks that Medical Cloud contains rich clinical data which catalyzes the research and application of electronic medical records, improving the medical system, so as to alleviate the problem of insufficient medical resources and uneven distribution between urban and rural parts of China. Indeed, launched by the Government in 2016; rights and responsibility of data collection, sharing and utilization and cloud management have been regulated, stimulated and outsourced by giving them to the third party companies and SOEs. “9) We will implement the Healthy China Cloud Service Plan, build an integrated platform for healthcare services, provide remote consultation, remote imaging, remote pathology and remote ECG diagnosis services; and improve the mutual recognition and sharing the mechanism of inspection results. We will promote data resource sharing and collaboration between large hospitals and medical institutions, general practitioners and specialists …”    A literal translation of Article 9 says that the government will collect all the medical data coming from the smallest clinic in Guizhou to the biggest hospital in Shanghai; process it and make it useful within the cloud; and give access for this data to whoever and whenever necessary; to provide a smarter healthcare services ecosystem to the public. Once again, what is seen as “personal” in the west, had not seen that private and allowed to be exchanged for the sake of other purposes in China. What is so earth-shattering about Medical Data Privacy in the West? There are a variety of reasons for placing a value on protecting the privacy, confidentiality, and security of medical data. Underlying causes are summarized as personal autonomy, individuality, respect and dignity. However, it should be noted that we all have different dignity and self-respect evolution criteria; the solemnity of these sort of “social value-based” laws are questionable. From a pragmatic point of view; the most significant reason is that if the patient does not trust the doctor, he/she will not share the reality on what has been happening in his body, which eventually results in less effective diagnosis&treatment. In fact; even the belief that the medical data is well protected and will not be disclosed without consent influences the entire process positively. Several mass medical data theft cases filed so far. Institute for Critical Infrastructure Technology stated that between 27.8 million and 67.7 million people have had their medical records stolen since they started keeping data in 2009. Medical records may include a person’s full name, address, emergency contact information, social security number, insurance details, the name of treating physicians, diagnoses, prescriptions, treatments and several other very sensitive pieces of information. This is why they are traded as a valuable asset amongst hackers and may be used in undreamed of frauds and crimes. In the U.S. medical data is protected by the Health Insurance Portability and Accountability Act (HIPAA) which was passed in 1996 and still the law is still in effect. HIPAA protects any information that doctors, nurses, and other health care providers put in the medical record, any conversation that doctor has about patient's care, any information about the patient in the health insurer's computer system, and any billing information about the patient. The law states that none of this information can be shared with the third parties without the patient’s consent. Although the efficiency and beneficialness of the law criticized by many; it still protects the patient’s information from any third-parties and this American approach was copied or adapted by and inspired to several other developing and developed economies in upgrading their medical data laws and regulations accordingly. We can not tell the same for the Chinese. Since the very first days of the establishment of Modern China, they have never approached to the legislation and regulation from a “copy-paste” approach; but they tailored for China, with a purely pragmatic activity-based approach. Who Process Medical Data in China? There are two types of major medical data processors in China; State-Owned Enterprises (SOEs) that possess the legal right to collect and process the mass data directly from hospitals and private companies who collect various types of data from individuals in exchange to several types healthcare services. In 2016, three SOEs were licensed and granted the right to collect the big data from China’s hospitals: China Health and Medical Big Data (中国健康医疗大数据), China Medical Big Data Industry Development Group (中国健康医疗大数据产业发展集团公司) and China Medical Big Data Technology Development Group (中国健康医疗大数据科技发展集团). (English titles were unofficially translated by the author) The detailed analysis of these SOEs activities’ are not in the scope of this article, and this article only covers the private companies whose activity scopes are med-tech, big-data, AI or/and IoT. Founded in 2015, 12Sigma (图玛深维)  is one of the first companies in China to introduce AI and deep learning into the medical image diagnosis and medical data analysis. The Company’s “Cloud Cad” product aims to provide doctors with accessing the medical image data at any time from anywhere in the world while giving an AI diagnosis help to the medical personnel who has limited technical capacity in reading the medical data of CT, MR, CR, DR, ECT, DSA, ultrasound, endoscopy, pathology and various other medical equipments. As of April 2019, the company has accumulated around CNY 200 million fundings in Series B. The company is operated from Beijing, Suzhou and San Diego offices with around 70 known employee. Founded in 2012, Yitu Tech (依图科技) is one of the most comprehensive AI companies in China with its CNY 671 Million (Series C ) cumulative fundings. They have activities in Security, Healthcare, Finance, Retail and Smart City industries. Its product “care.ai” powered by AI+Big Data; providing a supportive diagnosis and treatment platform for doctors and medical personnel. The more medical data care.ai processes and collects, the more it gets accurate. Zhejiang Provincial People’s Hospital uses Yitu’s smart medical imaging platform for the early detection of lung cancer, and another hospital in Guizhou cooperates with Yitu developing a preliminary diagnosis platform. In March 2019, Huawei and Yitu (依图科技) published the intelligent healthcare cloud co-developed by them during an AI Conference held in Fuzhou. Founded by Zhu Long (朱珑) and Lin Chenxi (林晨曦); Sequoia China and Zhen Fund back the company. The company operates in China, Singapore and the USA with around 500 employees. United Imaging (联影医疗) is yet another company that aims at launching a Medical Cloud solution for several applications. In fact, the company is one the biggest and most assertive MI, MRI, CT and Xray Machine producers globally; and it wants to convey its excess technical and financial capacity to the medical cloud application; linking regions, hospitals, and departments to achieve a high-quality medical resource-sharing in the Cloud. Not surprisingly, their cloud product “uCloud” has not yet submitted to the FDA of the US. For this product, they see China as the potential market to start with. The company raised CNY 3.3 Billion (Series A) funds and operates in the US and China with more 3000 employees. China’s internet giant Tencent’s WeDoctor and PingAn’s Good Doctor are the other massive apps that provide AI driven projects. Conclusion It is not an enigma that China needs to upgrade its data privacy regulations. The Government acknowledges the fact. Perhaps, the government currently prioritize its more significant structural healthcare problems before dealing with medical privacy. “The country will need a more comprehensive regulation and legislation in personal information and data protection. Premier Li urged all related departments to work with the National Health and Family Planning Commission (NHFPC) to further improve data protection.” stated the State Council of China. Current lax of regulation is an excellent opportunity to feed the algorithms with massive real individual data for Chinese companies. When WeChat Pay and AliPay first started to operate in China, there was no regulation to protect any personal data of the payee or the payer; moreover, these applications have started as non-licensed, non-bank financial operators. Today, their payment transactions surpassed the entire transaction volume processed within the baking system of China; creating the most advanced mobile payment ecosystem globally. In public security, Chinese gave up their privacy to the State Owned and private institutions who collect their offline online activity data to get more secure and traceable environment. In contemporary China, employing big-data and smart systems, the most crowded and complex country turns out to be one of the safest countries, globally. In Healthcare, it would be too naive to state that Chinese life expectancy will reach to that of Europeans and Japanese; but would be valid to predict that they will possess the best AI and Big Data powered med-tech solution providers.

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Apr 16, 2019 02:52 pm ·

12Sigma Sweeps MI Diagnosis Competition

12 Sigma won a tumour diagnosis competition, LiTS - Liver Tumor Segmentation Challenge, outscoring 1328 global MI Diagnosis and AI teams. Participants competed in developing automatic segmentation algorithms to segment liver lesions in contrast­-enhanced abdominal CT scans. For the competition, the data provided by various clinical sites around the world and the training data set contains 130 CT scans. The challenge is organised in conjunction with international biomedical imaging standards.  12 Sigma's AI enhanced liver CT (Computerized Tomography) automatically detects the 3D surface of the liver segmentation and quantifies liver forms. It helps doctors perform an automatic analysis and detection of deep-inside tumours supporting the follow-up tracking of patients and improving the medical evidence base for patients. The system empowers doctors to make accurate and efficient clinical diagnoses and reduce workload. The system is applicable to radiology, clinical departments and imaging centres. 12 Sigma's intelligent diagnosis solutions focus on real clinical needs; covering the whole process of disease-monitoring, quantitative analysis, disease classification, benign and malignant judgment, follow-up and medical report generation. It can halve the process for radiologists and clinicians.  The company's products focus on the high incidence areas of Chinese patients such as tumours and cardiovascular and cerebrovascular diseases. They can automatically segment organs from CT, MRI, X-ray, PET/CT and ultrasound images, automatically mark the tissue structure of suspected lesions, measure their location, size, shape and other quantitative information, and can also be used to segment organs from medical images such as CT, MRI, X-ray, PET/CT and ultrasound. The benign and malignant lesions were judged. Founded in 2015, 12 Sigma is a high-tech enterprise focusing on the research and development of the world's top intelligent medical imaging diagnosis systems. Presently, its products cover a relatively complete system of medical image-assisted diagnosis products. The company's products cover more than 200 hospitals, and the company has reached scientific research cooperation with more than 30 top hospitals in the mainland and overseas. The company's global layout has gradually deepened and has completed overseas distribution in the United States, Japan, Europe and other countries. It has also cooperated with local strategic partners and top research institutes.             

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Apr 15, 2019 09:02 pm ·

Can Medical Cloud Mitigate China’s Structural Healthcare Problems?

As a contentious debate topic among economists; it is still not yet known whether China will grow old before getting rich. If the Chinese population gets old and still sticks to be a middle-income economy, it will uniquely face a demographic crisis that no country has ever met before. In that case, China has to gradually revolutionize its entire healthcare, social security and pension system while providing several forms of affordable personal healthcare equipment and solutions; much more affordable than Japanese ones. The challenges China is facing today is as arduous as it will be facing in the second half of the 21st century. In terms of the healthcare facilities and human capital, contemporary China has a serious health disparity between urban and rural. While 3.92 licensed physicians serve for 1,000 citizens in the urban areas, 1.59 physicians serve for every 1,000 citizens in the rural; equivalent to almost 1.5 times human capacity difference. A Medical Cloud is a cloud computing service used by health care providers for storing, maintaining, extracting, transferring and backing up personal health information (PHI). Medical Cloud particularly provides healthcare applications in Medical Imaging, Diagnostic Decision Making, Telemedicine, Video-cloud and Medical Collaboration Solutions. The technology has a capacity to convey the healthcare services and facilities from urban to rural via big-data collaboration and various forms of a cloud application. Medical Cloud is a potential mass solution for a nation-level healthcare infrastructure rejuvenation for China to be ready to address the upcoming and current challenges in its healthcare industry. Deep-dive Into the Structural Healthcare Problems in China Chinese healthcare system faces three major challenges; urban&rural disparity,  changing demographics and attainability&affordability issues for medical products. The most explicit problem in China is its very problematic urban and rural healthcare capacity difference. Based on the data provided by the National Bureau of Statistics of China (NBSC), the healthcare capacity difference is in both human capital and physical facilities aspects; the disparity is between double to three-fold. NBSC reveals that 576 million people are residing in the rural areas of China; which means, 576 million people enjoying and benefiting 2-3 fold fewer facilities and resources than the rest 813 million people that are residing in the urban areas. Moreover, to what extent Chinese urban residents benefit from the healthcare and social security system is an arguable topic, as well.  Naturally, the disparity results in a disastrous mortality and life expectancy differences between rural and urban. It should be noted that while 27.5 physicians are serving for every 10,000 people in the USA, the number is only 13.5 in China. One can see not only between-regional problems but also national issues in the healthcare of  China. Mentioning the rural and urban disparities, it should be noted and elaborated on that although healthcare in urban areas is much more effective than rural; it has still several challenges keeping the Chinese healthcare system lagged as a whole. Out-of-pocket costs are seen as a major problem in China’s healthcare system. Nevertheless, the Chinese system has been progressing impressively compare to its near past; during the last 17 years, out-of-pocket costs nearly halved and replaced with social and governmental benefits, compensations and expenditures. However, the Chinese system is still far from being social-friendly compare to developed economies. In 2015, out-of-pocket spendings corresponded to 32% of the heart expenditures in China; while the share is 11% and 13% in the USA and Japan respectively. It is another aspect to explain why Chinese healthcare system is not mature enough to handle an old population. The structural problems in China’s healthcare system will be multiplied and severely deteriorated as its population grow old. Especially, the second half of the 21st century will be a hard landing for China’s economy with around 150 million people older than 80 years old. A major demographic tsunami is approaching towards Chinese society, and time is against the Chinese Government to transform its infrastructure to these paradigm changes in its economy. China should not only provide political solutions to the problem, but also there need to be technical upgradings in the entire infrastructure. Applications of Medical Cloud in China Medical Cloud could potentially transmit the excess technical and human capacity from urban areas to rural which can alleviate and soften the problematic healthcare structure in China. Medical Imaging sharing is one of the most prominent solutions that will be utilized with Medical Cloud in China. Medical Imaging includes storage, sharing and collaboration of the image reading by the experts and doctors no matter where the patient is physically located. By the use of 5G, it is also possible to share real-time MI and MRI with the doctors all around the world, regardless of where the patient is. For China; it will give another chance for the patients in rural areas to get use of the doctors’ expertise in the urban areas. The only high cost of barrier will be deploying MI and MRI devices in rural areas; however, the financial costs are the secondary problems in China compared to the human capital problem. Although they are incentivized for working in rural areas, Chinese doctors and medical personnel generally do not want to work in the rural. Medical Imaging reading is especially a high-tech medical process needs well-cultivated personnel. Medical cloud is highly prospective in this respect. 12 Sigma (图玛深维) and United Imaging (联影医疗) are providing the pioneering tech in this field. Cloud-Based Electrocardiography (ECG) can provide interoperability between mobile and fixed devices by sharing ECG data that are coming from the wearable mobile healthcare devices. The other aspect is; it gives a historical perspective for the doctor to evaluate the patient’s hearth performance. Heart problems are the number-one cause of death in China. Reasons like air-pollution, smoking and unhealthy urban environment further trigger the problem. Any solution that targets the cardiovascular health of Chinese people will have significant beneficial effects on a macro scale. Medtrum (移宇科技) has several advanced solutions in addressing the issue. The company provides wearable smart hardware for the constant cardiovascular monitoring and a healthcare cloud application to store, share and analyze the healthcare data with the third parties and doctors. “The Three Tier Architecture” by Tasic and Ristov explains the mechanisms: healthcare data is collected via wearable devices and sensors based on the individual, this data and information organized and collected via mobile device of that individual; and the entire information accumulated shared with the cloud; so that it can be examined and used on demand or whenever, wherever needed. The overall system brings enormous efficiency with tangible macro benefits. Telemedicine is the remote delivery of healthcare services and facilities the sharing of ECG, pulse rate, SPO2, Blood Glucose, NIBP, Pathological Slides, X-Ray Scanner and Dermatology  Camera. Along with 5G and medical cloud, all these services can be shared real-time with the doctor via the cloud; which brings an incredible capacity increase in the high-quality healthcare services in the remote areas. Conclusion China has severe structural healthcare problems; nevertheless, Chinese are good at conquering nation-level atrocities by long-term persistent policies. In the last 40 years; they overcame poverty by lifting hundreds of millions of citizens out from the poverty line in a way that has never seen in human history. However, today, the challenge is even bigger for China. Because, this time, it has to transform its entire infrastructure under economic slowdown paradigms. China had grown double-digits for decades, but those good old days are all gone anymore. For a healthcare rejuvenation, China needs market-driven technical developments together with a competent healthcare policy from the central government. The alarming situation can only be eased by utilizing a technological push for the entire infrastructure; medical Cloud and AI will play a crucial role in this transformation.

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Mar 17, 2019 09:09 pm ·

Talk with 12Sigma III: Medical Image Cloud and the Future

Told by 12Sigma (图玛深维) CEO ZHONG Xin (钟昕), 12Sigma would explore and develop cloud in 2019. Introduced in previous articles, 12Sigma will extend its business to North America and Europe this year while it already has a strong R&D relationship with research institutes and universities in these regions. Healthcare resources in China are distributed heavily in top-tier cities and the unbalanced distribution causes that other cities’ healthcare services are far from expectation. China’s hospitals and clinics are categorized into three major grades and in a total of 10 levels (三级十等). Third-grade Class-A (三甲) is the highest level in China’s hierarchical medical system that has the best healthcare resources among all hospitals. Third-grade Class-A hospitals have the most experienced doctors and the best facilities. Reported by National Health Commission of the PRC, the total hospital number was 32,476 by the end of November 2018, in which 12,072 hospitals were state-owned and 20,404 were privately owned. Among these hospitals, only 2,498 were valued as Third-grade Class-A hospitals. From the Third-grade Class-A hospital number, it took only 7.7% of the total hospital number. Nevertheless, the patients that Third-grade Class-A hospitals accepted in 2018 Q3 was approximately 51.7% of the total visits – 463.4 million visits out of a total 897.0 million visits were accepted Third-grade Class-A hospitals. Mentioned by Zhong Xin, 12Sigma’s potential hospital clients are majorly the Third-grade Class-A hospitals. Third-grade Class-A hospitals took the main responsibility in healthcare services even though the size of them do not match with flows of accepted patients. For AI medical image reading service, it aims to assist radiologists to simplify the image reading process and relieve the work stress. In non-Third-grade-Class-A hospitals, the healthcare condition varies. Medical imaging units include X-ray machines, computed tomography (CT) units, magnetic resonance imaging (MRI) units and so on. The x-ray machine is the mostly-equipped machines in China’s hospitals, but only top-class hospitals can afford for CT and MRI units, especially MRI units due to the high costs. AI medical image reading technology lies in the data generated from these medical image generators. The scarcity of medical image generator in lower-class hospitals makes the AI technology difficult to show its powerful function. The retained quantity of MRI machines in China was only 8,289 by 2017. Statista’s 2017 data of MRI units indicates that the U.S’ number of MRI units was as high as 37.56 per million population. China’s number of MRI units per million population was only 5.96, which is only 15.9% of the number of the U.S. MRI unit is one type of the medical image generators and cannot represent the overall situation of medical image generator in different countries, but it can provide some information about the healthcare service level in the country. China’s healthcare service level is yet to be developed. If China could reach the level of U.S. MRI units per million population in 2017, the MRI units would increase to 52,208, which is 629.9% of 2017’s number and the medical images would accordingly increase based on the increase of MRI units. The potential growth of medical image generators (not only MRI units) signals the potential future of AI medical image reading’s market. Shortage of radiologists and machines in towns and small cities might result in a blank in the medical image diagnosis market, but the need is still there, especially in an aging society. With optimistic thinking, the medical image cloud service can relieve the restriction caused by radiologist shortage – towns and small cities can purchase medical image generators while no experienced radiologists are in place if the hospital has technicians that know how to take medical pictures. Medical image cloud service allows facilities to upload medical images to the storage cloud, and the AI medical image reading service providers can use their technologies to assist radiologists to diagnose based on the medical image stored in cloud, which might be sent from a hospital in rural area that no one knows how to interpret the image. With the medical image cloud, radiologists can offer telediagnosis service. The combination of 5G network and cloud computation might even be able to actualize the streaming of telediagnosis process between the radiologists and hospital ignoring the geographical restrictions. To develop cloud service is a significant task for 12Sigma in 2019. The digitalization in the healthcare area has been going on through years in China, but a systematic database that can integrate all hospitals’ digital data is yet to be built.  Currently, hospitals and even within hospitals, different databases are used and the communication among these databases breaks down – databases are independent and hence the restructuring process of the database becomes an impossible task if there is no intermediator in the process. The government is pushing and encouraging the standardized digitalization process of healthcare data. 12Sigma’s plan on medical image cloud might be benefited by the preferred policy while the cloud service allows it to expand its business into a broader scale. Scoping on the MRI units per million, China has a tremendous space to grow and this will apply to other medical image generators like X-ray machines and CT scanners, though these two might not have similar growth potential as MRI machines do. The growth of medical image generators will contribute greatly to the total number of medical images generated and the booming of the quantity will inversely push the development of medical image cloud since the population growth of radiologists cannot catch up with the growth of image produced. Adding the aging issue of China, the healthcare service will enter a fast-growing status and the demand for medical image diagnosis will correspondingly be stimulated. Cloud service and AI-assisted diagnosis are critical for medical image vertical. With other technologies’ support like the 5G telecommunication technologies, the medical image diagnosis process can be improved in speed, accuracy, and even affordability.

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Mar 15, 2019 05:28 pm ·

Talk with 12Sigma II: We Appreciate Wolf Culture in Startup Spirit

As mentioned in Talk with 12Sigma I, 12Sigma is actively developing overseas market. 12Sigma enters the fourth year and expects to close a series C financing in the first half of 2019. Implied by 12Sigma CEO ZHONG Xin (钟昕), though the expression of capital winter repeatedly appears on mass media, the capital market is capable to support several AI medical image reading companies to the next stage of financing series. Besides the traditional venture capital organizations, listed companies are becoming more active in the investment area. As MSCI increased China’s A Share’s weight, China’s stock market performed considerably optimistic. Along with the positive signal in the stock exchange market, listed companies’ increasing investment behaviors are not difficult to explain. Besides, China A Share’s performance also affected the pre-IPO market. 12Sigma as a company in its fourth year does not exclude the Science Technology and Innovation Board (STIB) for its IPO option, according to its CEO. 12Sigma’s latest financing round was in late 2017, which was led by SoftBank China and followed by Zhen Fund (真格基金), CD Capital (辰德资本), and Delian Capital (德联资本). From the investment history, 12Sigma received foreign capital and plus the background of its founding team, 12Sigma might have considered being listed outside of China in the first place. STIB, which is said China’s Nasdaq stock exchange market, is now a preferred option for 12Sigma to consider. STIB was proposed in November 2018 and will soon be officially launched on March 18th, 2019. As mentioned by Zhong Xin, 12Sigma has Chinese investment-bank-background investor and hence the team is discussing the potentiality of being listed on STIB with investors. STIB’s regulation differs from China current stock exchanges since it has fewer restrictions on the stock price boundary. The openness of STIB attracts China’s technological startups and internet companies and EquanOcean has reported STIB features with more details. STIB allows companies to go public with no restriction on net income, which is the requirement for companies for going public on other share boards in China. 12Sigma is expecting a revenue ranging from CNY 100 million to CNY 150 million, which is 10 times the revenue generated in 2018. Addressed by Zhong Xin, 12Sigma can reach the breakeven point if revenue meets CNY 100 million in 2019. The team of 12Sigma has around 150 employees by March 2019 and approximately 55% of the team are developers and engineers, while approximately 20% are in marketing and sales and 25% for post-sale customer service. The composition of 12Sigma’s team conforms to similar companies like Infervision (推想科技). Approximately 50% of Infervision employees are developers and engineers. In 2019, 12 Sigma looks forward to recruiting 50 more employees and resulting in a team size of 200. Due to Zhong Xin’s career background, though graduated from Tsinghua University and University of Michigan with a strong academic background and a solid understanding of biological engineering and electric engineering, Zhong Xin’s experience in Qualcomm, Morgan Stanley, Goldman Sachs, and Merrill Lynch has prepared him to well-handle the pressure from founding a startup. “We are exploring the best way to build our own culture and the fittest organizational structure along with company’s growth”, said by Zhong Xin, “I appreciate the climate of Alibaba and Meituan accounting to their ‘wolf culture’ (hard-charging corporate spirit), which is a must-have for all startups to thrive and prosper". The images presented by Wall Street elites and technology companies’ developers and engineers share few in common. Wall Street image conveys a sense of standard business elite who works under high pressure and on a fast pace; technology companies image displays a more relaxing atmosphere, especially for companies in Bay area like Google, Amazon, etc. The difference between these two groups comes from the nature of works. Developers and engineers who work on algorithms are like artists and scientists, in which the works or research results could not have a specific deadline, and no shortcuts can be made. Because of the career experience, Zhong Xin himself managed to balance these two different cultures – 12Sigma’s algorithm developers and engineers need a peaceful environment to do their works while the product team and marketing and sales departments must push themselves to tackle goals. Besides the difference in job contents, the regional difference is another task for the company. 12Sigma has offices in San Diego, Beijing, and Suzhou. As San Diego and Beijing are metropolitan cities with globalization signatures, Suzhou seems to be less connected to the globe and more conservative in a cultural speaking. The local culture will correspondently impact on local teams and hence the difference emerged and influenced the corporate management at some degree. The difference is acceptable while it does not damage the bond among teams or violate disciplines or rules. Coherence is the core to connect teams and drives the company to step forward and grow. The competitions among AI medical image reading companies are getting intensive while top-tier companies are growing into similar sizes and tantamount competency. 12Sigma CEO Zhong Xin told that 12Sigma has acquired 18 patents in total. Among 18 patents, 10 are international patents so that 12Sigma can stretch its business to other continents with better intellectual protections. By far, 12Sigma is aiming at European market on account of the blank in AI medical image reading. It is commonly known that Europe has the strictest data security laws in the world and technology companies have been fined millions and even billions in every year. Healthcare data, one of the most sensitive citizen data, is not easy to be acquired. For newly-emerged technology companies that relied on big data, Europe is not a wonderland to practice business. 12Sigma’s products are under review to obtain CE marking and the U.S. FDA’s approval. The company expects to receive both qualifications before July 2019 and expand the business to both areas. In Europe, due to the strict regulation on data use, it is most likely for 12Sigma to negotiate with hospitals one by one; in the U.S., clients might not be limited to hospitals but with teleradiology companies such as vRad, NexxRad, Vision, etc. As estimated by Zhong Xin, the international revenue might take approximately 30%-40% of total annual revenue in around three years. The global medical imaging market size was valued at USD 33.7 billion in 2016 according to Grand View Research, and North America contributed over 30% of the revenue. North America, Europe, and the Asia Pacific dominated the market for taking approximately 90% of the market value in 2016. Where there is the medical imaging market with dense data, then there is the chance for AI medical image reading to root. And yes, 12Sigma's target markets land at these regions. China, as one of the best cradles for AI technology companies, has bred schools of AI medical image reading startups and these companies are taking the international responsibilities to reform global medical image reading industry. 12Sigma is one of the going-out enterprise representatives in medical imaging vertical. Healthcare, one of the strictly-regulated industries in every country, welcomes changes with cautiousness in the data explosion era.

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