Top 100 Medical Device Companies of 2019

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With the desire for healthy living as the most fundamental driving force, medical technology research will always be a common cause of humanity, and the progress of the industry will never have a peak. As an important branch, medical devices remain one of the fastest-growing industries in the world today. In both China and globally, the technology and market for medical devices are showing a positive state, maintaining steady growth in recent years.

From a global perspective, medical devices have formed a market with a high degree of concentration. Onlythe top 25 medical device companies account for nearly 60% of global sales, with the three major regional markets of the United States, Europe, and Japan holding an absolute dominant position. However, a very clear trend now is that the rise of Asian countries is changing the world economic landscape, and medical devices are a typical example.

The next ten years will be a decade of rapid growth.

Medical devices are an industry closely related to a country's level of basic industrial development. In the early days, due to factors such as the various links in the industrial value chain and comprehensive economic strength, China's medical device manufacturing level was at the low end, with most products being low-value consumables with low technological content and low prices. In recent years, against the backdrop of reform and opening up, the early industry conditions have been fundamentally improved. Today, China has become the world's most promising emerging medical device super market. Economic development, population growth, an aging population, and policy support are driving the industry into a golden period of development.

On the one hand, China's progress in technological level will drive industrial upgrading, and more high-value-added products will change the status quo of low-end products dominating the market. On the other hand, scale determines potential. China's large population base and growing medical and health needs are a huge driving force for market growth.

Currently, the ratio of sales of medical devices to pharmaceuticals in China is approximately0.25:1. In general developed countries, this ratio is approximately 1:1. In terms of per capita medical device expenditure, China's per capita medical device expenditure is only US$6, while in major developed countries it is over US$100. These gaps mean room for growth. Industry experts have predicted that in the next 10 years, the industry growth rate will remain above 10% per year.

Domestic high-end products are gradually regaining lost ground.

Medical devices are a typical high-tech industry, the most significant characteristic of which is intensive technology application, extensive interdisciplinary crossover, and technology integration and fusion. Restricted by the level of industry development, Chinese enterprises have repeatedly suffered setbacks when competing with foreign brands for the most profitable high-end product market, and currently still require a large number of importsof CT equipment, nuclear medicine equipment, surgical microscopes, ultrasound imaging and various other types of high-end medical equipment. In the 2017 statistics, the market share of domestically produced high-end equipment was still less than 30%.

However, the trend of domestication of high-end medical equipment is becoming increasingly apparent. The improvement of enterprise credentials is the most important reason for this change. Domestic medical equipment with both technological innovation and cost-effectiveness advantages is gradually expanding the market.

First, more and more enterprises are shifting the focus of their products from cost to value. Domestic medical equipment has made significant progress in technology level and product performance, and various diagnostic equipment and high-end consumables are gradually replacing imports.

Previously, MicroPort's self-developed Firehawk stent (Firehawk Coronary Rapamycin Targeted Drug-Eluting Stent System) underwent large-scale clinical trials in Europe and achieved good results. In the experiment, this product only needed 1/3 of the minimum drug loading of similar products to achieve the same safety and effectiveness as the top international stents, solving an industry problem. In September 2018, the authoritative journal "The Lancet" published the relevant research in full. This is the first time in nearly 200 years since the founding of "The Lancet" that a Chinese medical device has appeared. Although it is only a success in a certain branch field, this event is sufficient to illustrate that China's medical device technology is gradually approaching the world's leading level.

Secondly, the pharmaceutical industry is an emerging strategic industry related to national economy, people's livelihood, and economic development. The state is paying more and more attention to the development of the industry, and has issued many policies in recent years, creating a good market environment for domestic medical devices and promoting the trend of domestication of high-end equipment from multiple aspects.

For example,The "Twelfth Five-Year Plan" for Medical Device Science and Technology Industry, issued in 2012, established breakthroughs in high-end products as a key task. The revised "Regulations on the Supervision and Administration of Medical Devices" in 2014 clearly stated that the state encourages research and innovation in medical devices. In November 2018, the State Drug Administration issued the newly revised "Special Review Procedures for Innovative Medical Devices." The revised procedures are more scientific, which helps to improve approval efficiency, promote industry progress, and enhance the competitiveness of domestic products. In the public hospital reform system, hospital budgets are tightened, which also promotes domestically produced high-end medical devices to become procurement options.

Furthermore, the development of China's primary-level medical market is another factor that cannot be ignored. In addition to the first- and second-tier city medical markets with the strongest demand for high-end medical devices, the popularization of devices in the primary-level medical market has also led to a rapid increase in the demand for domestically produced high-end equipment.

Technological innovation is changing medical devices at an unprecedented rate.

The trend of combining AI technology with diagnostic equipment is booming, and assisted diagnosis products are facing important technological innovations. In 2017, the CFDA added a category corresponding to artificial intelligence-assisted diagnosis in the new version of the "Medical Device Classification Catalog," which is considered official affirmation of the future prospects of this type of medical device. In addition, according to the China Medical Artificial Intelligence Industry Report, about 61% of current medical AI products are assisted diagnosis products. According to incomplete statistics, more than 60 domestic enterprises are currently working on the development of assisted diagnosis products. This is only the beginning of the industry.

Medical care is a typical knowledge-intensive industry. Taking the example of viewing medical images, giving diagnostic results, and formulating treatment plans, a doctor needs to have a large amount of knowledge and experience to be qualified to complete this process. This does not guarantee that the diagnostic results are 100% accurate, because subjective opinions and knowledge forgetting are unavoidable. Moreover, there has always been a shortage of medical talent in China, and the growth rate of doctors is far less than the growth rate of medical image data, which means that doctors have more and more films to view.

With deep learning capabilitiesThe advent of AI technology is timely, as it will transform this traditional inefficient and resource-intensive diagnostic method. When using AI technology to assist in diagnosis, medical data is fundamental. Through deep learning of a large amount of medical images and diagnostic reports, AI-assisted diagnostic equipment transforms into a "doctor" with rich clinical experience and superior diagnostic capabilities.

With continuous exploration,AI technology has opened up many new possibilities in medical imaging, including image reconstruction of imaging equipment, X-ray chest film reading, fundus detection, brain region segmentation, brain disease diagnosis, organ segmentation/target area delineation, ultrasound-assisted diagnosis, bone injury identification, bone age analysis, and pathological slice analysis, among more than ten fields. This greatly alleviates problems related to efficiency, quality, and cost of medical services in the diagnostic process.

The more participants, the brighter the future of the industry.

The rise of new technologies often harbors numerous opportunities, and the industry's inherent high-profit attributes are also extremely attractive. Currently, medical devices are considered the most promising investment area, with a large number of well-known Internet and technology companies joining. More and more participants are constantly revitalizing the industry, and the future shows more possibilities.

In February 2019, Baidu added "sales of Class III medical devices" and "sales of Class II medical devices" to its sales and business scope. Prior to this, in January, the "AI Fundus Screening Integrated Machine" jointly developed by Baidu and Sun Yat-sen University Sun Yat-sen Ophthalmic Center was unveiled.

Baidu has its sights set on the primary medical market; this move is Baidu's layout in the medical device field.In early 2018, the "Baidu Lingyi" team, positioned as "AI empowering primary medical care," was established within the company. According to the AI-empowered medical plan, Baidu will also donate AI fundus screening integrated machines to 500 impoverished counties nationwide, covering approximately 56 million people at risk of eye diseases. Promoting equipment through donations is an excellent idea, and we have reason to believe that Baidu's accumulation in AI technology will bring positive changes to primary medical care.

In addition, DongSoft Medicalproposed the "Beyond Imaging" Brand concept in early 2019, deciding to focus on building the NeuAI artificial intelligence platform and promoting the "Imaging Cloud" strategy. Through networked, intelligent, and specialized technical means, it aims to improve the service level of primary medical institutions. Tencent has also cooperated with international medical device giants such as Philips and the British startup Medopad to develop AI projects for medical diagnosis. For example, the medical AI project in cooperation with Medopad can diagnose Parkinson's disease, multiple sclerosis, and psoriasis.

Medical devices are high-tech products combining multiple categories such as optics, mechanics, electronics, biology, and chemistry. The addition of new enterprises and new technologies is an important source of industry vitality. Under the current environment, China's medical devices are in an unprecedentedly good era, and the entire industry will gradually complete industrial transformation and upgrading through continuous changes in technology and market.

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