Wearable devices such as fitness trackers and smartwatches are gaining popularity in the global market. Hong Kong startup Belun Technology has developed the Belun Ring, a medical-grade wearable device that is certified by the US Food and Drug Administration. Leveraging on artificial intelligence (AI) technology, the device enables users to analyze sleep quality as well as the risk of potentially serious disorders such as obstructive sleep apnea.
Belun chief executive Lydia Leung recently sat down with the Hong Kong Economic Journal to share her entrepreneurial experiences and her company’s innovative ideas.
HKEJ: As a biotech firm and an incubatee under the Hong Kong Science and Technology Park’s (HKSTP) Incu-Tech Programme, can you explain Belun’s business development?
Leung: Founded in 2016, Belun Technology is headquartered at the Hong Kong Science Park. We now have 16 employees and nine of them are research and development (R&D) staff. We are committed to developing medical-grade wearable devices for healthcare professionals in order to assist hospitals in making health risk assessments by collecting data from patients.
Since the establishment of the company, our products have successfully passed R&D and clinical tests, and obtained the USFDA certification in May this year. We have established the foundation of the company, and for the next step, we are planning to recruit marketing and customer service professionals.
Q: Is it difficult to apply for USFDA certification? How can it help in the firm’s development?
A: The FDA has strict regulatory measures and procedures. Applicants must first pass the ISO 13485, the medical device quality management system certification and submit detailed documents and supplementary materials.
Companies need to get fully prepared before submitting the application to the FDA. First of all, researchers must thoroughly understand FDA’s regulatory standards so that the products they design can meet the standards and get the ISO 13485 certification. Finally, when they submit the product plan to the authorities, they need good communication and collaboration during the process.
With our product, medical personnel can make use of the data collected by the devices, such as heart rate and blood oxygen parameters, to evaluate and diagnose the patient’s condition. We introduced the product to the market last year. However, at that time, they were not yet certified by the FDA and that affected the market adoption of the product.
Q: Have you considered entering the mainland market and applying for certification from the China Food and Drug Administration (CFDA)? What is the difference between the two application procedures?
A: The threshold for application of CFDA certificates for the China market is relatively higher. Applicants must set up a domestic company with their own production lines. The documents required by the CFDA are roughly the same as those asked by the FDA. However, for startups, having a self-owned production brings a high challenge on cost control. So at Belun, we plan to get the FDA certification first, and then we would think about applying for CFDA certification to enter the China market after we have obtained a domestic partner.
Q: How does Belun Technology attract investors’ financial backing?
A: In the early stage of the development of biotech firms, there were only some basic product prototypes. If the company cannot obtain any certification for its products, and there is no previous reference to their technical achievements, it is difficult for investors to assess the risk of investing in it.
Simply put, biotech investors must focus on measuring the corporate risk, business model, and the company’s valuation before they make the investment decision. Take the development of botulinum toxin (BOTOX) as an example. It is originally a medical product for the treatment of nerves. But later, it was able to attract investors to invest at a high premium as it was transformed and applied in the beauty field, creating a new business model and market value.
We did face challenges in financing. When we don’t have any certification for our product, investors will question when they will pass the FDA certification. Last year, we finally got the investors’ support in our seed round, and the raised capital has supported our operation and development.
For now, as the product has obtained the ISO 13485 and the FDA certification successfully, these qualifications help close our series A funding round.
Q: As an incubatee in HKSTP’s Incu-Tech Programme, what kind of support do they provide?
A: HKSTP does provide a lot of practical support to us, such as offering a relatively low rent for our office and a laboratory for product testing, which solves the space problem for us, so that we can have a better control of our operating costs.
In addition, HKSTP has expanded our media exposure, and introduced investors to us, laying the foundation for the company to expand overseas. They also offer us a chance to attend at the global stage of startups of consumer technologies, the International Consumer Electronics Show (CES) in the US.
In addition, HKSTP contacts local government agencies and the social welfare sector, allowing us to promote our technology projects targeting the elderly population, which will be a great opportunity for us to reach potential buyers.
This article appeared in the Hong Kong Economic Journal on Aug 10
Translation by Ben Ng
[Chinese version 中文版]
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