Medical technology and medical device market trends
In 2004-2014, the compound growth rate of China's medical technology and medical device industry revenue reached 25%, much higher than the global growth rate of 7%-8%. In 2014, China's medical device industry market size was 255.6 billion yuan, and it is expected to exceed 300 billion yuan in 2015. Compared with the pharmaceutical manufacturing industry, China's medical device market only accounts for 10% of the total pharmaceutical market. Compared with the global medical device accounting for 42% of the total pharmaceutical market, there is still huge room for upward development.
Catalyzed by the aging of the population, the growing middle class and the government's growing medical spending, China's medical device industry is expected to maintain strong growth momentum and present several important development trends:
1. Import substitution theme upgrade
Some traditional consumables and monitoring products have basically achieved import substitution, and the next stage of import substitution will shift to high-end surgery and imaging equipment such as high value-added; "US technology + China manufacturing + global market" will become an important theme.
The development of medical devices in China has experienced a long process from import to domestic, from material technology to electromechanical processing, from the domestic market to the global market. China's medical devices started relatively late compared to developed countries. In the early days, imports were basically based on imports to meet demand. Due to the lack of core technology, many domestic medical device companies have gradually replaced foreign companies with relatively low price and policy dividends, starting with relatively simple materials and equipment, and occupying most domestic markets in certain segments. With the upgrade of consumption and technology and the strategic layout of the country, domestic medical device companies will realize the import substitution of high-end surgery and imaging equipment with higher added value.
We believe that for the present and for a long time to come, the import substitution and globalization of domestic medical devices will be a major trend, and innovation is the best means. A large number of overseas entrepreneurs who master core technologies have seen opportunities in the domestic market, localized technologies and products, built production bases with relatively low domestic labor costs, and then sold their products globally through distributors to achieve a global path. "US technology + China manufacturing + global market" will become the theme of the market for a long period of time.
2. Subversive technology gradually penetrates
The emergence of disruptive technologies such as liquid biopsy, surgical robots, and 3D printing may fundamentally change existing medical treatments and medical patterns.
Liquid biopsy is disruptive for cancer detection. A method for detecting and monitoring a patient's tumor by detecting CTC (circulating tumor cells) and ctDNA (circulating tumor DNA) in the blood is called a liquid biopsy. The emergence of liquid biopsy can solve the limitations of tissue biopsy. This technology can solve the difficulties of clinical sampling, meet the needs of high-frequency monitoring of patients, and has the advantage of lower cost than the biopsy. The future is expected to be applied in the fields of early tumor screening, dynamic monitoring of cancer patients, and personalized medication guidance, and the market prospect is broad. The MIT Science and Technology Review selected liquid biopsy as “Top Ten Technology Breakthroughs in 2015”.
In the field of surgery, the emergence of surgical medical robots has subverted existing surgical procedures, maximizing the hands of doctors. Compared with traditional surgery, surgical robots have obvious advantages: less bleeding, faster recovery, and shorter training time for doctors. Surgery will enter the “repairable era” from the “removal era”. As the most popular surgical robot "Da Vinci", it has been widely used in a variety of operations including adult and children, such as general, chest, urology, obstetrics and gynecology, head and neck surgery and heart. Da Vinci's penetration rate in the US hospital market is close to 50%. At the end of 2015, Da Vinci had installed 3,597 units worldwide, and its annual revenue in 2015 reached 2.37 billion US dollars. As of the third quarter of 2015, China has 46 Da Vinci robots and the penetration rate of the top three hospitals is 4.3%. Compared with the United States, the Chinese market still has huge room for growth.
3D printing is a representative subversive technology in the manufacturing industry, and its penetration and application in the medical field are promising. The reason why it is subversive is because it solves the problem that was difficult to solve in the past. For example, in the field of orthopedics, Peking University Third Hospital used 3D printed artificial pivot to treat patients with cervical tumors. The tumor resection was very effective. There have been four successful cases, which was unimaginable before. In addition, the successful launch of the 3D printed artificial liver unit independently developed by Hangzhou University of Electronic Science and Technology has also provided a new solution for the screening of new drugs. China's leading companies in the field of 3D printing, such as Maipu Bio, have taken the lead in commercializing the 3D printing dura mater and injecting a stimulant into the market.
3. Accurate medical care continues to heat up
Second-generation sequencing and digital PCR will play an increasingly important role in individualized clinical diagnosis and treatment, especially in the screening, diagnosis, monitoring, prognosis and treatment of tumors.
According to the NIH (National Institutes of Health), precision medicine is an emerging medical approach to disease prevention and treatment that takes into account individual differences in genetic, environmental, and lifestyle patterns. Precision Medicine is based on molecular diagnostic technology, combined with bioinformatics analysis and big data cloud computing technology, to set different medical treatment programs for each person's different biomedical characteristics, which is also a revolution and innovation of traditional medical models.
In the short term, precision medicine is expected to shine in the field of cancer. The second-generation sequencing and digital PCR-based diagnostic methods will be widely used in the individualized treatment of tumors. The target gene cryptography will be interpreted by target detection, and the optimal treatment plan will be developed for the patient's own characteristics. Treatment to achieve breakthroughs.
4. Platform companies are ready to go
More and more A-share medical device companies are beginning to seek opportunities for overseas mergers and acquisitions, and cross-border arbitrage space is obvious. At the same time, some large pharmaceutical companies have begun to consider integrating device companies to create a comprehensive medical health product and service platform.
Domestic medical device companies not only hope to achieve new profit growth points and new market exploration through overseas mergers and acquisitions, but also hope to achieve technological upgrading and management level through overseas mergers and acquisitions. In addition, compared with foreign capital markets, the domestic A-share market has an unparalleled valuation advantage, and the arbitrage space for cross-border acquisitions is very obvious.
Some large-capital companies listed on the A-share market are also actively seeking mergers and acquisitions opportunities in other related fields, extending their reach into the field of devices, hoping to build a comprehensive medical and health products and service platform to enhance their ability to resist risks. More and more M&A in the market has gradually evolved from pure channel mergers or acquisitions to M&A version 3.0, which is about the layout and integration of the entire ecosystem.
2016 will be the focus of capital attention
Gene sequencing and liquid biopsy for a wider range of clinical applications
Accurate, fast and fully automatic POCT (instant inspection) instrument and supporting reagents
New materials, new technology-oriented orthopedics, cardiovascular and cerebrovascular, intraocular lens and implant implants and high-end surgical instruments and consumables
Domestic medical imaging diagnosis and treatment equipment with independent intellectual property rights
Major players in the medical technology and medical device market
Medical Device Platforming Company: Yuyue Medical, Xinhua Medical, Kelly
Medical Device Specialization Company: Lepu Medical, Daan Gene
Traditional medicine companies: Xinlitai, Haisi, Hainan Haiyao
Non-medical companies: Hongda Hi-Tech, Jingwei Textile Machinery
[Source] Yikai Capital