Profitable business makes your profit
On August 22, Brain Dynamics Aurora disclosed its prospectus following the hearing at the Hong Kong Stock Exchange, planning to go public on the main board with CICC and Shanghai Pudong Development Bank International as joint sponsors, and Deloitte as the auditor.
The core product has been commercialized in multiple indications
Since its establishment in 2012, the company has been committed to the development and commercialization of cognitive assessment and intervention products for cognitive disorders. The core product, the Brain Function Information Management Platform software system, has been commercialized in various cognitive disorder indications and is expanding the development of more indications. In addition, the company also has four products that have obtained regulatory approvals both domestically and internationally: BCAT, SAS, DSS, and cognitive dysfunction treatment software. These products are developed based on a systematic assessment function technology framework and have undergone additional research and development to improve the accuracy and efficiency of doctors' assessments of cognitive disorders. Furthermore, the company has multiple candidate products in various stages of development, including software for cognitive disorders caused by the new coronavirus, ADHD, depression, and other diseases. The company is also developing cognitive function assessment and treatment software in the United States and the European Union to expand into the international market.
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The company's core product has entered the medical insurance reimbursement catalog in 30 provinces in China and is the first undertaking unit of the National Health Commission project, responsible for promoting the establishment of cognitive centers nationwide and fostering the development of the digital therapy market. To date, the company has helped more than 80 hospitals establish cognitive centers and has participated in the release of expert consensus in the field of digital therapy in China, gaining recognition from top domestic hospitals and medical professionals. In terms of clinical trial cooperation, the company has cooperated with Anzhen Hospital and other hospitals and clinical trial institutions to conduct clinical trials, such as clinical trials related to cognitive disorders in atrial fibrillation, coronary heart disease, and hypertension.
Brain Dynamics Aurora's revenue comes from providing in-hospital system integration software solutions, enabling hospitals to provide assessments and interventions to their cognitive disorder patients; providing out-of-hospital system integration software solutions to individual patients; providing research project services to research institutions; auxiliary training services, assisting customers in organizing and providing logistical support for training courses for cognitive disorder specialists; and others, such as selling system-embedded hardware and related user accounts.
The company holds a 25.0% market share in China's digital therapy for cognitive disorders
The company adopts a direct cooperation model with hospitals for sales and marketing, enhancing the visibility and acceptance of its products and technology in the medical community through cooperation with top hospitals and research institutions, organizing academic exchange meetings, and promoting to individual patients. The company's pricing strategy is based on the medical insurance reimbursement catalog and the actual content of services, providing different charging standards for hospitals and individual patients. The main revenue of the company comes from cooperation with hospitals and income obtained through research project services. In addition, the company also increases revenue by selling integrated equipment and user accounts, as well as providing auxiliary training services.
Brain Dynamics Aurora's revenue in 2022 and 2023 was 11.29 million yuan and 67.2 million yuan, respectively; the losses during the period were 500 million yuan and 359 million yuan, respectively, with adjusted net losses of 117 million yuan and 149 million yuan, respectively.
The global market for digital therapy for cognitive disorders has a certain competitive landscape, with major participants offering products such as cognitive training interactive games, cognitive behavioral therapy, and health monitoring systems. The company's core product system covers cognitive disorder indications caused by vascular diseases, neurodegenerative diseases, mental illnesses, and developmental defects in children, and holds a dominant position in the Chinese market. The company maintains a competitive edge in the digital therapy industry by heavily investing in R&D and independently developing various AI models and virtual human technologies. In terms of competitive landscape, there are six major global participants with nine FDA-approved products. In China, there are 25 participants with a total of 30 approved digital therapy products for cognitive disorders, and 15 participants are conducting clinical trials.
In 2023, the market size of digital therapy for cognitive disorders in China reached 269 million yuan, and it is expected to increase to 1.047 billion yuan by 2025, and to 8.927 billion yuan by 2030, with a compound annual growth rate of 97.4% and 53.5%, respectively.In the Chinese market, the company is a leading provider of digital therapeutics for cognitive disorders, holding a 25.0% share of the Chinese digital therapeutics market for cognitive disorders and a dominant 91.6% share in the medical-grade cognitive disorder digital therapeutics market.
The company's R&D team consists of 122 members, including 27 experts with master's degrees and 2 with doctoral degrees. The company has invested heavily in R&D, establishing a robust technological infrastructure and independently developing key AI models and virtual human technologies to provide innovative medical technologies and solutions for cognitive disorders. Additionally, the company's R&D capabilities have been recognized within the industry, including receiving the first-class 2023 Chinese Medical Science and Technology Award from the Chinese Medical Association.
Accumulated 7 rounds of financing
Neuro Aurora has attracted capital attention in the early R&D stage. In 2015, it obtained angel round investment with a valuation of 36.6285 million yuan; in 2016, it secured a Series A investment of 4 million US dollars, with a valuation reaching 129 million yuan. The investment institutions included Northern Light Venture Capital, a venture capital firm focusing on early opportunities in enterprise, healthcare, and consumer industries, with multiple US dollar and RMB funds. Subsequently, the company began to explore commercialization paths. In 2020, Tan Zheng, Chairman of Yongtai Bio, invested in Neuro Aurora and acquired a portion of the shares, becoming the largest shareholder of the company. After Tan Zheng joined, the financing speed of Neuro Aurora accelerated, completing multiple rounds of financing, with a total of about 532 million yuan, and the valuation reached 2.691 billion yuan.
After the Series A financing, Neuro Aurora fell into a 4-year silence in the capital market until it gained attention in 2020. At that time, Tan Zheng from Yongtai Bio met the founder Wang Xiaoyi through a cooperative hospital and obtained the rights of Wang Xiaoyi's Zhejiang Neuro Aurora in October 2020 for a consideration of 4.5 million yuan. He then participated in multiple Series B investments, with a total investment amount reaching 85.8571 million yuan, and the post-investment valuation reached 400 million yuan. During the Series A and Series B financing periods, the company's valuation increased significantly, mainly due to obtaining the second-class medical device registration certificate from the Hunan Provincial Drug Administration and publishing clinical trial data on the system's effectiveness in the authoritative peer-reviewed journal A&D in May 2019, which comprehensively analyzed its safety and effectiveness.
In subsequent financing, Neuro Aurora has received multiple investments exceeding 100 million yuan. In the Series C financing completed in 2022, Neuro Aurora received a payment consideration of 138 million yuan. By the completion of the Series C+ financing in 2023, Neuro Aurora had accumulated 7 rounds of financing, with a post-investment valuation reaching a historical high of 2.691 billion yuan. During the Series B and Series B+ financing periods, the company's valuation increased significantly, mainly due to the commercialization of the system in several leading hospitals in China, including Anding Hospital.
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