How to seize the golden 10 years of Chinese medical device innovation?

Medical Network May 15 News

Thanks to favorable policies, demand quality, upgrading of manufacturing capacity, technological innovation and capital promotion, the medical device industry has become the fastest growing sector in the health industry, and it has also become one of the most promising investment hot spots in the capital market. According to China medicine The Industrial Information Center predicts that China's medical device market will exceed 600 billion yuan by 2019, and its compound annual growth rate is expected to reach 16.8%. In the future medical device market, innovation will become the most important driving force for its high-speed growth. Pushing forward the structural reform of the supply side is fundamentally a way out. China's medical device innovation has entered the golden 10 years.

First, China’s import substitution ratio has increased significantly, especially for large-scale medical imaging equipment, cardiac stents and other high-value consumables. Although the import substitution process for some sophisticated medical devices is far from complete, the initial market education for import substitution in the field of medical devices Has been completed, forming a trend and wave in the entire medical device industry, and was accelerated.

Second, the state has intensively introduced innovative policies related to medical devices. drug The “Opinions on Innovative Medical Devices” “Three-Year Action Plan for Enhancing the Core Competence of Manufacturing Industry (2018-2020)” has made the acceleration of innovative medical device approval and the development of high-end medical device industry a priority. In recent years, the country’s investment has continued to increase. The financial support for medical devices has increased at multiples. The country’s priority in the approval of medical devices is increasing. It is expected that the priority approval of high-precision medical devices will gradually become a normal state in the future, thus providing support for the rapid growth of medical devices. .

Thirdly, the distribution channels and prices of medical devices will be further regulated. With the implementation of drug circulation and price rectification by the state, medical devices have also started trials such as the two-vote system, eliminating unnecessary links in sales channels, The patients gain profits, which will make the medical device industry develop into a virtuous circle, and then improve the quality requirements of medical devices. The more innovative products, the more profitable they are, the pursuit of innovative medical devices will be the first consideration of more and more companies. Strategic Direction.

Of course, there are many other favorable basic factors, such as the perfection of talents and industry chain. Return of overseas talents, outflow of talents from foreign companies, talent cultivation of large-scale domestic medical companies, etc., make it easier for excellent technology talents, sales talents, and market talents. Acquired. China's industrial chain has been relatively complete, making it easier and faster to obtain the relevant core components of medical devices.

After many years of accumulation and precipitation, the conditions for medical device innovation in China have matured. Medical device innovation has already provided the basis for rapid development and assistance. China's medical device innovation has entered the golden decade.

Looking at the path of success of international medical device giants, most of them are specialized, and through the initial completion of technological breakthroughs, they have become more productive, and through horizontal and vertical mergers and acquisitions, they have achieved synergies and eventually become platform companies. Products are a combination of technology and expertise. In the R&D process, a comprehensive use of multiple technologies is required. This can lead to the creation of a large number of specialized, featured companies. Among them, small high-tech companies are the most active component of the medical device industry.

Internationally, there are two main types of medical device innovation:

The first is the format represented by Israel. Due to the small size of the domestic market, Israel’s medical devices focus on innovation and R&D. Israel is the world’s second largest medical device innovation country with strong innovation capabilities. In terms of the number of medical device patents, per capita First in the world, the absolute number is the seventh in the world. There are more than 750 life science industry companies in Israel, of which 55% are engaged in research and development and production of medical devices. In addition, Israel has the world's most intensive medical device incubator, once medical device products. Incubation success, 90% of companies choose to mergers and acquisitions or sales, the industrialization of products to the North American or European platform giants to complete, and entrepreneurs in the company after the sale began a new innovation.

The United States represents the second format. The United States has both specialized incubator companies and many large global medical device leaders such as Medtronic, Johnson & Johnson, and Poco. These companies are almost all platform companies with a complete product line. Some are multi-field platforms, some are large platforms in a certain subdivided area, and on the basis of their strong research and development capabilities, they are also seeking innovative products for mergers and acquisitions globally. From the current status and trends of international mature markets, those efforts The small companies that have achieved the technological breakthroughs and specialized growth path are most active and are also more attracted to venture capital. Large platform companies are striving to build global brands and services while actively investing in investment strategies and strategic acquisitions of small and medium-sized enterprises. Businesses are relatively difficult to survive, and if they cannot quickly become bigger and stronger, they are always at risk of being merged.

At present, China has not yet emerged as a giant in medical devices. There are many medium-sized companies, and the number of small, professional and innovative small enterprises has increased rapidly. China's format will be more inclined to the US development model, and small, specialized and innovative companies will be very active in the future. M&A will be more frequent. For small, professional and innovative companies, disruptive innovation is bound to be the best choice, but also the most vital. However, considering the dividends and trends of China's import substitution at this stage, choose the current international It is still a good choice to have mature products but with high technical barriers and a relatively late start in China. Due to relatively mature applications in foreign countries, this direction is also relatively safe, for example, drugs in the cardiovascular and cerebrovascular fields. Balloons, pacemakers, etc. It's worth noting that, like this specialized and innovative company, the founders must be prepared to be acquired in the future. Since most single-species market spaces for medical devices have ceilings, a single category can The market size of 100 million yuan has been very good. It is even less necessary to achieve a market scale of 1 billion yuan. Product bigger and stronger companies will be very difficult.

In addition, in the current market environment, the success of the product to marketing and sales (proxy The dependence on the system is getting higher and higher. If the founder is completely technical, it is difficult to stand out. medical instruments enterprise In terms of innovation, the enterprise itself is necessary. At the same time, the investment and layout of early innovative medical device projects based on its strategic direction, as well as horizontal and vertical mergers and acquisitions, etc., will all be considered by medium-sized companies.

Despite the accumulation in recent years, China has initially established the foundation and support for the rapid development of medical device innovation, but it must also be clearly aware that medical devices are a combination of technology and expertise, and that they require a long time to accumulate technology and breakthroughs. It is not possible to catch up with international standards overnight. Under such circumstances, how to systematically and effectively learn and use foreign technologies is crucial.

In recent years, China Medical Capital has been committed to promoting the International Medical Technology Transfer Base (MTTB) is a model to enhance domestic enterprises innovation. With a sound overseas layout and a rich source of overseas projects, Chinese medicine capital screening technology leader Products that have been approved in the United States or Europe, have been marketed (fully market-tested), set up joint ventures and introduced domestically, to be invested. At the same time, China Medical Capital has introduced domestic listed companies as partners to jointly promote this product. China's registration for approval and follow-up local production, etc. In the process of cooperation, learning, and absorption, the Chinese cooperative's ability to innovate has been rapidly improved.

For investment institutions, facing the highly diversified medical device industry, how to fully seize the gold of innovation for 10 years is a more difficult issue, especially for investment agencies that have just begun to contact the medical device industry. It seems that there are many opportunities for investment, but they are relatively scattered. It seems that the market space is not large, but some companies appear to be developing very well in seemingly inconsequential directions. So, in many categories, how do you grasp the opportunities?

There are no short cuts to solve this problem. Only three aspects can be considered: First, the capacity and continuous expansion capability of the subdivided industry in the project; Second, the innovation of the project core product and the disruption of clinical applications and leading market opportunities. Third, founders and management teams. The first two aspects can only be clearly understood and determined through systematic industry research. We divide medical devices into 7 sub-industries, including in vitro diagnostics, imaging, and cardiovascular and cerebrovascular diseases. , Surgical / Orthopaedics, Oncology, Medical Artificial Intelligence and other comprehensive categories. We conducted a systematic industry study of the sub-industries mentioned above, combed almost every important enterprise in each sub-sector, and tracked and updated the progress of the company at any time. Follow-up investment in a timely manner. The benefits of doing so are to fully grasp the progress of the sub-industry, systematically track the outstanding companies, and be able to grasp the first two aspects of the study with ease, targeted

In the medical device sub-sector of our system, the investment direction of the following six innovative medical devices is worth considering.

There are relatively more hot spots. The stents are no longer the focus of our attention. More focused innovations focus on transcatheter valve interventions, coronary heart disease diagnostic devices, cardiac pacemakers, drug balloons, radiofrequency ablation devices, and cardiac occlusion devices. Wait for several directions.

For general-purpose large-scale equipment, such as CT, magnetic resonance, and PET-CT, there are few excellent early-stage projects and the valuation is high. With the advent of high-end imaging equipment manufacturers, it has not yet formed its own model. The new imaging company, with GPS outside, has a lack of growth space under the shadow of the Alliance. We are more optimistic about the subdivision of imaging equipment, especially the unique hardware and artificial intelligence algorithms with their own application scenarios. For example, breast cancer ultrasound, dental cone-beam CT, etc. In addition, we are also optimistic about the upper reaches of core components such as core technologies.

The tumor ablation equipment once heated for a period of time, including freezing, radio frequency, microwaves, and lasers, is no longer. In the field of radiotherapy, the domestic enterprises of proton heavy ion technology need to make breakthroughs. It takes a long time to accumulate. Electronic linear accelerator enterprise It is worth paying attention, but it is necessary to focus on the ability to research and develop high-energy machines. Gamma Knife is based on the limitations of its own technology, and the market space is limited. It is not the direction of investment that we are concerned about. In addition, the rapid growth of cancer intervention in recent years, new drug carrier microspheres It is worth noting that microsphere delivery system consumables may be a new market growth point in the future, but the technology is not yet fully mature.

Surgical robots are undoubtedly still one of the important directions. However, due to excessive pursuit of capital in recent years, the phenomenon of price deviation from value is more serious. 3D printing is one of the most promising directions in combination with biological materials.

Medical artificial intelligence is the direction of medical development in the future. Compared with other industries, the foundation of artificial intelligence applications in the medical industry is better, and the pain points in the medical industry are obvious. For example, the lack of high-end medical personnel, unbalanced distribution of resources, and high medical costs; data electronicity Higher, more centralized data and higher quality; more application scenarios can achieve relative standardization, such as medical imaging. Based on current observations, the artificial intelligence of medical imaging and medical virtual assistants will be relatively mature, and some targets deserve attention.

Molecular diagnostics and point-of-care testing (POCT) is still the main direction of innovation. In molecular diagnostics, big data and artificial intelligence will change the overall molecular diagnostics. For example, sequencing services for gene sequencing are facing a new round of reshuffling. The database, core algorithms and clinical interpretation capabilities of the company will have the opportunity to break through. Localization of upstream sequencing reagents for genetic sequencing will also be an important opportunity. The accompanying diagnosis of cancer is currently market education is basically mature, is one of the directions worth investing.

Whether it is a medical device company or an investment institution, if it seizes the opportunity of this innovative gold for 10 years, the company will become bigger and stronger, and it will become a platform giant. The financial return of investment institutions will not only be a dream.