Tencent-Backed WeDoctor to Market Australian In Vitro Fertilization Services in China

(AFR) — The new owners of in vitro fertilization (IVF) services provider Genea have plans to create superstar doctors on an online platform, which they hope will lure Chinese would-be parents to Australia and Thailand for high-quality reproductive medicine services.

As revealed the Australian Financial Review Friday, Asian investment firm Aldworth Management, Hong Kong-listed financial services and wealth company Mason Group and Chinese health unicorn WeDoctor (which is backed by tech giant Tencent Group Holdings Ltd.) have teamed up to buy Sydney-based Genea. Sources said the business was sold for just over $215 million.

Genea is Australia’s third-largest reproductive services player. The consortium hopes to capitalize on its strong presence, as well as its growing business in New Zealand and Thailand, to attract Chinese patients prepared to travel overseas for high-quality IVF services.

WeDoctor, which has 220,000 doctors and 160 million users, will play a huge role in that strategy. WeDoctor chief of strategy Jeff Chen said the platform builds communities around doctors, who can promote their work and practice telemedicine on the site.

“We want to do the same for Genea doctors, to help them build up an image in China,” he said. “We want to make them, the Genea doctors, like an internet star.”

Chen said initial IVF consultations could be done on the platform, and later when the woman travels, they would also provide services to help though the process.

“We want to be a destination for Chinese looking for IVF services,” he said. “Mid-to-longer term, we would like to replicate the Genea brand in China.”

Cracking the $2 billion fast-growing IVF market of China would be a huge step for Genea, which began in Australia 30 years ago.

The company offers a wide range of assisted reproductive technology services, including IVF, egg and embryo freezing, genetic testing, sperm banks, day surgeries and pathology. Genea developed technology such as culture media and embryo transfer catheters used in more than 600 clinics in 60 countries.

The buyer consortium — which is looking to acquire an 89.5% stake in Genea — came together in May to create Hong Kong’s largest IVF company, called Reproductive Healthcare Group, via the merger of two of the largest IVF practices in the former British colony.

Growing demand

Mason Group Chief Operating Officer Joel Chang said there is a strong demand for reproductive health care in China, an underserviced market.

“We can bring this technology and know-how to China,” he said.

As Chinese regulations changed from the one-child policy to two, and young Chinese are getting married older and giving birth later, demand for IVF has increased.

Chang noted that around 12.5% to 15% of married couples will need reproductive help in China — which equates to 40 million people. Increasingly, the growing middle class can afford the 20,000 yuan ($2,920) per IVF cycle cost.

However, the Chinese IVF market is highly regulated — it’s illegal for a woman to freeze her eggs unless she is married or has a disease that could prevent her from having children.

Genea hired investment bank Citic-CLSA in October to find a buyer for the company.

The Genea deal is subject to agreement from Genea’s shareholders, which include the company’s doctors and other investors. Genea Director Dr Robert Woolcott said with change comes a “degree of anxiety,” but did not believe doctors would leave under the new owners, given Genea is a pioneer of fertility treatment backed by in-house research and technology development.

Chang said WeDoctor’s strong network and resources in China could help Genea grow and expand its fertility and IVF medical device and consumable businesses in Asia-Pacific, especially in China.

Genea boss Tomas Stojanov said he was confident the company had the right partners for the next stage of its growth, which will allow more patients to access its technology and services, as well as provide greater opportunities for doctors and staff.

“The transaction will not impact patient care and there is no intended change to the Genea business model,” he said.

Genea told shareholders the offer was subject to Foreign Investment Review Board approval.

This article was originally published by the Australian Financial Review.