China's medical machinery market grows rapidly

“With the strong growth in demand from the Chinese medical market, more and more medical device companies in the world will target China.” On March 16, Zhang Zhaofeng, Deputy Director of Department of Biotechnology and Pharmaceuticals, Department of Social Development Technology, Ministry of Science and Technology, was held in Shanghai. "The second summit of medical device industry development and investment CEO" is said.

Large domestic space

At this stage, the concentration of global medical device industry is getting higher and higher, and the proportion of major multinational companies in the world market is increasing.

According to statistics, the top 10 medical device companies in the world are Johnson & Johnson, Siemens, GE Healthcare, Medtronic, Baxter Medical, Philips Medical, Boston Scientific, BD Biosciences, Stryker, and Braun Medical. The company accounted for 34.5% of the world market share, which increased to 44.8% in 2010.

The growth of the medical and mechanical industry depends on continuous innovation. EvaluateMedTech predicts that from 2011 to 2018, the annual growth rate of R&D expenditures in the global medical technology sector will remain at 3.3% of the health sector, reaching US$25.3 billion. In fiscal year 2011, the world's top five R&D budgets were Johnson & Johnson, Abbott Laboratories, Siemens, Medtronic, and GE, which were US$7.5 billion, US$4.1 billion, US$1.56 billion, US$1.51 billion and US$1.3 billion, respectively.

At the same time, the global medical and mechanical market sales increased from 187 billion U.S. dollars in 2011 to 355.3 billion U.S. dollars in 2009, with a compound growth rate of 8.35%. Last year, the size of China's medical machinery market was about 150 billion yuan, and the compound annual growth rate in the recent 10 years was 21.3%, far exceeding the developed countries.

China's medical device market accounts for 14% of the total pharmaceutical market, which is far from the global level of 42%. Compared with the global average per capita consumption of medical equipment, China has a 5-6 times growth potential. The market expects that by 2015 China's medical device market will reach 53.7 billion US dollars.

Foreign companies

The good market outlook has attracted a lot of capital inflows. According to statistics, in 2012, medical devices became the most segmented industry with private equity and venture capital concerns. From the perspective of the number of investment cases, the number of medical device transactions was 2.58 times that of 2011, accounting for the proportion of the total number of medical and health industry transactions from 13.95% in 2011 to 29.81%, and the transaction amount was three times that of 2011, accounting for The proportion of the total medical and health industry transaction amount rose from 2.46% in 2011 to 17.51%.

Zheng Weihe, chairman of Shenzhen Tongchuang Weiye Venture Capital Co., Ltd., stated that due to the phenomenon of “barrier lake” in IPO, even if it meets the scale requirements of the China Securities Regulatory Commission, it is now required to apply for listing and IPO must be implemented at least until 2015. Therefore, for many small medical device companies, the choice of being a listed company or a multinational enterprise merger or acquisition may be a key development path.

In 2012, there were 23 mergers and acquisitions in the field of domestic medical machinery, of which 17 were international mergers and acquisitions. "Especially recently Medtronic's $816 million acquisition of Comfort, 361 million Hong Kong dollars stake in Shenzhen Xianjian Technology, and Stryker's purchase of Genesis 5.9 billion Hong Kong dollars, all exceeded market expectations, further demonstrating that mergers and acquisitions are important for the development of medical device companies and the withdrawal of venture capital. Channel." Zheng Weihe said.

The layout of international giants in China is clearly visible. For example, Medtronic joined the two domestic medical and mechanical companies at the end of last year and continued to penetrate from the orthopedics to the cardiovascular sector. At the same time, many foreign companies also set up factories and R&D centers in China. Toshiba Medical Systems has established a research and development center in China. Boston Scientific has also signed an agreement to establish a factory in Pudong, Shanghai, which includes a production center, an R&D center, a training center, and a clinical center.

Preference for technological innovation

China's medical device market is huge and there are many subdivided industries. The profit rate and growth rate of each subdivided industry are significantly different. The profit rate is different due to technical barriers, and the technical barriers in the areas with higher profit margins are higher. It is very difficult for local enterprises to participate in competition.

“China's medical machinery industry is characterized by 'multi, small, high, and weak'.” Zhang Zhaofeng explained that, first, there are many manufacturing enterprises. As of the end of 2011, there were 14,603 medical equipment manufacturers nationwide; second, the scale of the enterprises was small. The total output value of the medical and mechanical industry is over 180 billion yuan, and the average output value of each enterprise is about 12 million yuan. Third, the product concentration is high, the number of medical and mechanical products is more than 3,500, and an average of more than ten registration certificates for each product; fourth, innovation Weak capacity, from 2001 to 2010, the number of international patent applications for electronic medical equipment, China ranked fourth in the world with 25,385 items, and the United States ranked first with more than 80,000.

Zhang Zhaofeng believes that the overall pattern of low-level equipment allocation in China's primary medical institutions has not changed, and the industry still suffers from problems of being unable to do well, being unable to do it, being unwilling to do it, and being strong. It is necessary to accelerate the drive of innovation and use integration as a means to substantially increase the Improve the core competitiveness of the medical device industry.

According to the “12th Five-Year Plan” of the medical device technology industry, it will focus on supporting 10 to 15 large-scale medical and medical enterprise groups, supporting 40 to 50 innovative high-tech enterprises, and establishing 8 to 10 medical and technical industrial bases. 10 state-level innovative medical device product demonstration and application bases, improve the industrial chain, optimize the industrial structure, increase market share, and significantly increase the international competitiveness of the medical device industry. It is expected that the value of new medical devices brought by scientific and technological progress and demonstration applications will reach 200 billion yuan, and the proportion of exports to the total international market will increase to more than 5%.

“In this industry that places great emphasis on innovation, technology is the key factor in seizing the market. In the face of innovation risk and stable revenue, we prefer the former.” Hu Xubo, partner of Qiming Venture Capital believes.

Liu Daozhi, a guest speaker at the summit and senior vice president of Shanghai Wicre Medical's emerging business, also said: “In the coming period, the company will focus on the overall strategy and conduct a series of mergers and acquisitions at home and abroad to build a global market.”