Stephen W. Cheung PhD

Reshaping Hong Kong’sHealthcare

Panel Members

Name Role Fields & InterestsDr. Stephen Cheung Moderator Medical Devices

Dr. Ronald Li Challenger Biotech

Mr. Charlie Hung Panelist Internet, investor

Mr. Jimmy Tao Panelist Food Safety, Biotech

Dr. Nelson Wong Panelist HK Healthcare Practitioner

*Ms Vanessa Cheung (panelist) is unable to attend

Session Objectives

1. Hong Kong’s Healthcare Landscape• What opportunities?• Special case: Aging population services

2. Industrialization candidates• Biotech• Medical Devices

3. Conclusion of Session• Are the above at Tipping Point?• List 3 critical drivers to move forward

Examples of critical driversa. Qualified investmentsb. Government supportc. Cost of doing businessd. Critical masse. Skilled workersf. Market access (HK & China)g. Technology partnersh. Support industriesi. Legal & regulatory issues

% GDP CountriesOver 12% USA (17.1%) – US$2.9 Trillion

9-12% France, Switzerland, Germany, Canada, Finland, Japan, UK

6-8% S. Korea, Taiwan

4-6% HK(5.2%*), China (5.6%), Singapore (4.6%), India, Malaysia

Healthcare Expenditure as % of GDP (2012/2013)

Source: World Bank and HK Gov Health and Food Bureau

*: HK’s expenditure is US$13.6 B, 48% by HK Gov

Demographics (2014-15)Demo groups % of Pop

United States

Boomers (1946-65)Millennials (1981-2000)

76M (24%)83M (26%)

HK* 10-30 yr old30-49 yr old50-69 yr old

1.5M (20.5%)2.2M (31.4%)2.2M (31.3%)

China 15-30 yr old40-50 yr old

250M (18%)280M (20%)

*: Extrapolate from 2011 HK Census

Est aggregate net worth by generation in US

Source: Board of Governors of the Federal Reserve System – Survey of Consumer Finances, US Census Bureau, JP Morgan Asset Management: data as of Dec 31 for each survey year

Greatest Generation

Baby Boomers

Gen X andMillennials

Boomers have $ !!

HEALTH

MED EQUIPBIOTECH

ETF Performance of Health, Biotech, and Medical Equipment2006-2015

Causes (US CDC) Deaths % HK (HK Gov) China (2012 CCDC)

1. Heart disease 611k 23.5 #3 (13.4%) #2 (21%)

2. Cancer (1.66M new cases) 585k 22.5 #1 (31.3%) #1 (28%)

3. Chronic lower respiratory diseases

149k 5.7 #5 (4.0%) #4 (5%)

4. Accidents 131k 5.0 #6 (4.3%) #5 (3%)

5. Strokes 129k 5.0 #4 (7.5%) #3 (11%)

6. Alzheimer 85k 3.3 #9 (2.3%)

7. Diabetes 76k 2.9

8. Influenza & Pneumonia 57k 2.2 #2 (15.7%)

Top Causes of Death (2013)

Demand• 5-12 linac systems per

millionUS: ~ 5,000 systemsChina: needs 10,000+

~ 2,000 currentUnit price• US$3-6M• Gross Margin: 70%Business investment cycle • 10+ yrs to IPO

Example: Radiation Oncology

Critical Success Factors• Initial adoption• FDA approval• Good ROI for hospitals• Versatility

Benefits• High knowledge

content• Well pay jobs

Example: Radiation Oncology

Linacs per million inhabitants

Source: 2012 Elekta

New cases in the world:~15 M (2015)~20 M (2030)

WHO: Cancer Cases On The Rise in China (2012)

• Report: Africa, Asia, and Central/South America were the hardest hit by cancer

• World registered: 14 M new cases, 8.2 M deaths• China’s new cases: 3.07 M (21.8% of global)

Deaths: 2.2 M (26.9% of global cancer deaths)• China's own statistics: ~3.5 M new cases and 2.5 M

deaths• Most new cancer cases & deaths: liver, esophagus,

stomach and lung

Source: South China Morning Post 02/07/2014

“Only 20% of Chinese cancer

patients now take radiation therapy, while the figure stands at more

than 70%in the US.”

China Daily 11/23/2015

Source: 2012 Elekta

China radiation oncology marketMarket drivers: need of training and education

Technologies on the Horizon: NBIC to CKTS

NBIC(2002 NSF): Convergence ofNano + Bio + Info + Cognitive

Coordinated R&DUS and worldwide

CKTS (2013): Convergence of Knowledge + Technology to benefit Society

1. Boomers: the BIGGEST market in history• Proliferation: Senior care, organ replacements, robotic

prostheses…….

2. Diagnosis and treatment of common illnesses & diseases• Emphasis: Preventive care, minimum intrusion• Personalized medicine on rise: Genomics, customized medication• Coming to market: stem cells, regenerative• Wearable and implantable devices• The body is BIG DATA

3. Service providers• Productivity Tools to Control Cost • What about Traditional Chinese Medicine (TCM)?

4. Millennials: Will have different experience when they age

Visualize Healthcare - Now to 2030

Stephen W. Cheung PhD

Reshaping Hong Kong’sHealthcare