Analysis of the Battle of Laparoscopic Topflow

 

Date：[2023/12/22]
 

Laparoscope, similar to gastroscopy and colonoscopy, is a medical device with a light source and a miniature camera, belonging to Class III medical devices. The entire set of equipment includes laparoscopy, energy system, light source system, perfusion system, imaging system, and commonly used laparoscopic surgical instruments (such as puncture needles, trocar needles, separation forceps, electrocoagulation hooks and rods, clamps, titanium clips, scissors, needle holders, snares, etc.), mainly used in general surgery, gynecological surgery, and other surgical procedures.
In laparoscopic surgery, the doctor inserts the laparoscope into the abdominal cavity through a small incision in the patient's abdomen, and the camera of the laparoscope can transmit the internal situation of the patient's abdominal cavity to the monitor of the video surveillance system for the doctor to examine and perform the surgery. Compared to traditional open surgery, laparoscopic surgery has the advantages of minimal trauma, mild postoperative pain, fast recovery, and aesthetics, making it a key technology for achieving minimally invasive diagnosis and treatment.
Industry competition pattern
The medical device market is one of the fastest-growing and most active markets in international trade in the global economy today, and the laparoscopic market is the fastest-growing category in the global medical device market. The progress of science and technology and the growth of minimally invasive technology applications will continue to drive the rapid expansion of the laparoscopic market.
According to the Global Laparocopy Devices Market Opportunity and Forecast, 2020-2027 report released by Allied Market Research in April 2020, the laparoscopic device market is expected to grow at a compound annual growth rate of 5.8%. By 2027, the global laparoscopic device market will grow from $12 billion in 2019 to $18.9 billion.
North America and Europe are the two main consumer markets for laparoscopic equipment worldwide. In 2019, North America was the main source of revenue for the global laparoscopic equipment market, mainly due to the increasing elderly population in the region and the prevalence of gastrointestinal and abdominal diseases among the population. Europe has the second largest market share in the global laparoscopic equipment market. For the Asia Pacific region, which currently has a relatively small market share in laparoscopic equipment, a large population base, increasing patient affordability, and improvements in healthcare facilities will drive the growth of the laparoscopic equipment market.
Major global suppliers of laparoscopy
The concentration of the laparoscopic instrument industry is relatively high. The manufacturers with the largest global market share in laparoscopic surgery include: B Braun Medical, Boston Scientific Corporation, ConMed Corporation, Johnson&Johnson, Karl Storz SE&CO. KG.
1. B. Braun, Braun Medical, Germany
Braun Medical is a German medical and pharmaceutical equipment company founded in 1839, with its headquarters located in Mersengen, central Germany. Braun Medical has over 5000 different healthcare products, with a revenue of 6.908 billion euros in 2018.
Aesculap, as a subsidiary of Braun Medical, was founded in Thuringen, Germany in 1867 and established its US branch in Central Valley, Pennsylvania, USA in 1977. It produces and manufactures a range of equipment, including sutures, handheld surgical instruments, implants, and electrical surgical equipment and power systems. It also provides training for healthcare workers through its Aesculap Academy.
On November 7th this year, at the 3rd Shanghai CIIE. Germany's Braun Medical Asia has launched a new generation of 3D laparoscopic systems. The device is equipped with the industry's largest optical CMOS chip and pioneered the use of NAJA disposable sterile technology, making continuous surgery possible.
2. Boston Scientific Corporation
Boston Scientific Corporation was founded on June 29, 1979 in Watertown, Massachusetts. It is a manufacturer of interventional medical equipment, including interventional radiology, interventional cardiology, peripheral interventions, neuromodulation, neurovascular interventions, electrophysiology, cardiac surgery, vascular surgery, endoscopy, oncology, urology, and gynecology. Boston Scientific's total revenue in 2019 reached $10.7 billion, of which endoscope revenue was $1.9 billion, accounting for 17.8%.
3. ConMed Corporation
The history of Kangmei Company began in 1970 as a merged medical equipment company founded by Eugene Corasanti in Utica, New York. Kangmei produces and sells thousands of products to suppliers in the healthcare industry, leading the orthopedics, general surgery, gynecology, gastroenterology, laparoscopy, cardiology, and critical care markets.
SurgiQuest was founded in Connecticut in 2006 and was acquired by CONMED in 2016. The company mainly designs and develops laparoscopic catheters, striving to eliminate the problems caused by traditional catheters such as circular seals and duckbill valves since the early 1990s. After the establishment of the company, AirSeal, an air circulation system without a tube, was launched. This is the world's first and only non tube circulation system that integrates laparoscopic and robotic surgery.
Since SurgiQuest joined CONMED, CONMED has achieved rapid growth in sales. In the 2016 fiscal year, CONMED's sales exceeded 760 million US dollars, setting a sales record for CONMED.
4. Johnson&Johnson, Johnson&Johnson
Johnson&Johnson is an American multinational corporation founded in 1886, primarily developing medical devices, pharmaceuticals, and packaged consumer goods. Ranked 37th in total revenue on the 2018 Fortune 500. Johnson&Johnson is one of the most valuable companies in the world.
Aixikang Company is a subsidiary of Johnson&Johnson. Prior to 1992, Aixikang Endoscopic Surgery Company was a part of Aixikang Company and later became an independent entity under Johnson&Johnson to expand and diversify Johnson&Johnson's product line. As a subsidiary of Johnson&Johnson, Aixikang Endoscopic Surgery manufactures surgical equipment and equipment for open and minimally invasive surgeries in the fields of obesity, gastrointestinal health, gynecology, and oncology. Its products include endoscopes and laparoscopic tools, among others.
5. Karl Storz SE&CO. KG
Since its establishment in 1945, the Karl Storz family company has developed into a global manufacturer and distributor of endoscopes, medical devices, and equipment. The scope of endoscopic instruments ranges from human medicine, veterinary medicine to industrial endoscopes, including over 15000 products. The company's recent development center is in digital document systems and comprehensive operating rooms. As a system supplier, the company combines its expertise in endoscopy with software solutions to achieve integration in the operating room and support clinical processes and resource management.
Domestic laparoscopic market
The medical device market in China has a large volume and fast growth rate. The size of China's medical device market increased from 312.6 billion yuan in 2015 to 664.2 billion yuan in 2019, with a compound annual growth rate of 20.7%. It is expected that, driven by the aging population, the rising incidence rate of chronic diseases, the continuous growth of the number of hospitals and doctors and the improvement of affordability, and the favorable policies of the government, the market size of China's medical devices will reach 1391.9 billion yuan in 2024, with a compound annual growth rate of 15.9% from 2019.
In fact, China's market for minimally invasive surgical instruments and accessories (MISIA) is also developing rapidly. The size of China's MISIA market has increased from 9.6 billion yuan in 2015 to 18.5 billion yuan in 2019, with a compound annual growth rate of 17.8%. It is expected that the compound annual growth rate will be 17.2% from 2019 onwards, and the market size will reach 40.8 billion yuan in 2024.
Looking at domestic laparoscopic manufacturers, Kangji Medical is currently the largest minimally invasive surgical instruments and accessories (MISIA) platform in China. The company was founded in August 2004 by Mr. Zhong Ming and Ms. Shen Tu, and has a comprehensive product portfolio covering major minimally invasive surgeries to provide doctors and hospitals with one-stop and customized surgical solutions. Its main products include disposable cannula puncture devices, polymer ligature clips, disposable electrocoagulation forceps, etc. In 2019, the company had a market share of 2.7% in MISIA, ranking first among domestic manufacturers.
In addition to Kangji Company, there are also medical device manufacturers in China, such as Zhejiang Tiansong Medical Equipment, Jiangsu Yuyue Medical Equipment, Shenyang Shenda Endoscope, and Chengdu Xinxing Endoscope. Although with the development of minimally invasive technology in clinical medicine, the demand for laparoscopic surgery in China has grown rapidly, more than 3/4 of the market is monopolized by foreign brands, and the market share of domestic brands is less than 1/4.
However, the third world overseas markets of laparoscopy, mainly in Southeast Asia and South America, are in the emerging stage, with higher price sensitivity and relatively lower requirements for product performance. Some domestic enterprises are targeting the low-end overseas markets for sales and opening up incremental markets.
The genesis of the existing pattern
The first major reason - high technological barriers in the industry:
Laparoscopy is an instrument that integrates interdisciplinary technologies such as optics, electronics, structure, and materials, with extremely high technical barriers. The mirror body contains multiple channels, including lighting optical fibers, image transmission optical fibers, gas transmission channels, water transmission channels, etc., which require the cooperation of talents from multiple professional fields.
-Optical technology: The core components are the lens and image sensor, and the technical difficulty is the design of the camera optical module.
-Image processing algorithms and imaging: noise reduction technology and edge enhancement technology, such as NBI narrowband imaging technology and FICE spectroscopy technology, and Japanese manufacturers have applied for many patents for protection.
-Materials and processing technology: There are a large number of patents and technical secrets in fine structures, materials, and other aspects. For example, finding materials with moderate softness and hardness suitable for insertion, mass production of ultrafine parts processing and assembly processes.
The second major reason is that the first mover advantage is obvious, and established enterprises have established an industrial moat:
-Upstream technology blockade: Blocking the export of upstream core components, implementing patent blockade in advance, and overseas enterprises not establishing research and development centers in China to prevent talent and technology loss.
-Production management: While mass production, it ensures product qualification rate and quality stability, reduces consumption and costs, and establishes a lean manufacturing management system.
-Market promotion and doctor education: Many doctors in top tier hospitals have been trained by Olympus and have developed specific operating habits, leading to greater trust and reliance on Japanese brands.
-Construction and improvement of supply chain: selection and cooperation of suppliers on a global scale, and bargaining power of upstream and downstream.
Summary
In recent years, the "surgical process" sector represented by minimally invasive surgery will continue to become a growth hotspot and an important direction for future medical development. The laparoscopic surgery industry is also constantly emerging with many disruptive innovative products, such as 3D laparoscopy. At present, the domestic rigid endoscope industry is on the rise. Compared with general imported rigid endoscopes and their supporting equipment, there are no major technical problems and price advantages. However, due to shortcomings in process standards, processing precision, quality stability, system engineering construction, and industry management, the current market share is not high. While domestic laparoscopes face opportunities, they also face huge challenges.