After a significant increase in the number of financing in 2018 and a decline in financing in 2019 and 2020, the ophthalmic market is undoubtedly speeding forward.
Taking the financing events that occurred in the ophthalmology market in 2021 as an example, according to the incomplete statistics of the arterial network, in the primary market, a total of 37 companies in the ophthalmology industry have obtained financing in 2021, involving 45 financing events, which has doubled significantly compared with 17 financing events in 2020.
Behind the focus of capital, it also reflects the market's optimism about ophthalmology. Eye diseases have a huge patient base, taking common eye diseases as an example, according to the "China Eye Health White Paper" released by the National Health Commission, the overall incidence of myopia in children and adolescents in mainland China is 53.6%, and the overall incidence of college students is more than 90%.
In recent years, under the influence of factors such as the deepening of china's social aging and changes in lifestyle, the incidence of eye diseases such as cataracts, glaucoma, and dry eye has also increased year by year. According to Intranet data, the number of cataract surgeries in mainland China has increased from 1.116 million in 2012 to 3.323 million in 2020, and the number of cataract surgeries per million population (CSR) in 2020 is 2357.
In the treatment of ophthalmic diseases, because most eye diseases are difficult to cure by drugs, drugs usually only play a role in delaying the progression of the disease, so some people prefer to use surgery for thorough treatment. Moreover, based on the complexity of the eye structure, eye surgery is more dependent on the instrument, and ophthalmic instruments play a more critical role than ophthalmic drugs.
At this stage, ophthalmic medical devices mainly include ophthalmic surgery and vision care, of which medical equipment and medical consumables are an important part of ophthalmic surgery. However, compared with medical consumables, the presence of the ophthalmic equipment market seems to be somewhat low. Taking the domestic three types of ophthalmology devices approved in 2021 as an example, among the 34 approved three types of ophthalmic devices, all the devices are medical consumables or vision care products, while the number of approved ophthalmic devices is 0.
However, in clinical applications, due to the large variety of diseases and the precise and complex structure of the eye, ophthalmology is the existence of various medical specialties and their dependence on instruments and equipment, but due to the high technical barriers of high-end equipment and the sinking market has not been activated, the development of China's ophthalmic medical equipment market in the past has not been satisfactory.
So under the current situation that the ophthalmic market is attracting considerable attention, how has the ophthalmic equipment market changed? What is the future?
Frequent occurrence of large amounts of financing,
What is the market potential for ophthalmic devices?
At the beginning of this year, the National Health Commission issued the "14th Five-Year Plan for National Eye Health (2021-2025)", which aroused public concern about the development of eye health.
And the latest assessment of the Global Eye Health Report published by The Lancet Global Health recently shows that solving preventable vision loss can bring about global economic benefits of US$411 billion (about 2624.8 billion yuan) per year. The potential of the ophthalmic market can be seen from this.
In fact, due to the continuous growth of the population base and the development of surgery-related technologies, the size of the mainland ophthalmic device market has grown from 7.8 billion yuan in 2016 to 12.9 billion yuan in 2020, with a compound annual growth rate of 13.3%, showing a growth rate higher than the global medical device market.
China's ophthalmic medical device market (Source: Gaoshi Medical Prospectus)
In terms of capital market performance, from the perspective of the financing situation of the entire ophthalmology in 2021, ophthalmic instruments are undoubtedly the most frequent financing areas, with a total of 23 financing events, of which the financing events in the field of ophthalmic equipment and eye health products account for the main proportion, and the number of financing events in the field of consumables is closely followed.
From the perspective of capital market performance, the ophthalmic equipment market is not weaker than the ophthalmic consumables market. Compared with 2020, the number of financing events in the ophthalmic equipment market is almost comparable to the number of financing events that occur in the field of ophthalmic devices. And it is worth mentioning that the two companies of Tupan Medical and Micro Imaging have obtained two rounds of financing in 2021, with a single financing amount of more than 100 million yuan.
Microscopic imagery
Founded in 2014 in Silicon Valley, USA, Microscopic Imaging focuses on high-end ophthalmic equipment. It is reported that the first scanning OCT approved by the microscopic imaging in 2019 is better than the imported similar products in terms of scanning speed, penetration, imaging depth, imaging range and blood flow algorithm. In addition, in the field of high-end ophthalmic equipment research and development of anterior segments, cataracts, and refractive diseases, microscopic imaging is also laid out.
Tu Pan Medical
Founded in October 2017, Tupan Medical originated from the transformation of scientific and technological achievements of tsinghua department of electronic engineering, and the core team consisted of more than ten Tsinghua alumni and executives from major well-known high-end manufacturing enterprises around the world, and was jointly incubated by Beijing Tsinghua Industrial Development Research Institute, global health industry innovation center GIC, and Zhongguancun Life Science Park. Since its inception, Tupan Medical has been committed to the independent research and development and manufacturing of all-line high-end ophthalmic medical equipment and core optoelectronic devices, and has now possessed a number of product lines such as ultra-high-speed ophthalmic scanning OCT, scanning optical biometric instrument, OCT endoscope, etc., and has achieved domestic breakthroughs in many fields.
In addition to frequent financing incidents, in November last year, Gaoshi Medical, the third largest ophthalmic medical device manufacturer in China, also formally submitted a prospectus to the Hong Kong Stock Exchange. According to the prospectus information, between 2018 and the first half of 2021, ophthalmic medical equipment has been the main source of revenue for Hypervision Medical.
At the same time, it can also be seen from the above figure that the proportion of revenue from ophthalmic consumables is growing year by year, and it has ushered in a substantial increase during the 2021H1 period, which is also affected by the acquisition of Tailiang and Roland by Gaoshi Medical to a certain extent.
However, at this stage, the improvement of the gross profit margin of Gaoshi Medical (from 2018 to 2020 and the first half of 2021, the comprehensive gross profit margin of Gaoshi Medical was 40.9%, 41.9%, 45.3% and 46.6%, respectively) mainly rely on the increase in the gross profit margin of ophthalmic medical equipment sales (39.6%, 39.7%, 43.4% and 44.9%, respectively), while the gross profit margin of ophthalmic medical consumables is indeed in a state of fluctuation (50.7%, 52.5%, 51.8%, respectively). and 51.0%), which also shows the market potential of ophthalmic devices.
In the field, the entrants continue to explore, and outside the field, more and more companies' ophthalmic track layout has gradually surfaced.
In March last year, MicroPort Vision received 385 million yuan of capital injection from micro-venture investment, Wangdaotong Biotechnology and other enterprises, behind this move, the ophthalmology layout of micro-invasive medical has been further strengthened.
It is understood that MicroPort Vision was established in July 2020, and its main business is R&D, production and sales of ophthalmic-related medical products for diagnosis, treatment and nursing. According to the published patent information, minimally invasive vision has a number of patents including ultrasonic emulsification systems, ultrasonic oscillators, intraocular lenses and other instruments. From this point of view, Minimally Invasive Vision is clearly more focused on the research and development of ophthalmic devices.
It can be seen that in the actual market performance, the ophthalmic equipment market is not inferior to ophthalmic medical consumables. And whether it is capital or entrepreneurs, they also continue to increase their efforts in this field. So what are the problems facing this booming track?
The market is blocked by the mountain of imported brands
In general, ophthalmic devices usually include ophthalmic diagnostic devices and ophthalmic treatment devices. Clinically, ophthalmology can be divided into seven main sub-specialties of fundus disease, cataract, glaucoma, refractive error, ocular surface and pediatric ophthalmology, and the diagnosis and treatment within each sub-specialty usually requires instruments or consumables or both.
Due to the wide variety of eye diseases, the types of diagnostic and treatment equipment involved are also equally complex, and the number of domestic brands involved in various fields is also considerable, it seems that the market faced by domestic brands is not so severe.
But in fact, ophthalmic equipment, especially high-end medical equipment, has long been monopolized by imported brands due to high technical barriers, and the existence of various problems such as talent and market penetration has also affected the development of the high-end ophthalmic equipment market. Specifically, today's domestic ophthalmic medical equipment industry is mainly facing the following problems.
First, extremely high technical barriers. Most local companies lack the ability to algorithms, systems, optical software, manufacturing processes and other core parts of high-end ophthalmic equipment. Extremely high technical barriers not only make domestic enterprises difficult in equipment research and development, but also bring a very high import monopoly rate.
It is understood that the main blinding eye diseases in the mainland have changed from infectious eye diseases to cataracts, myopic retinopathy, glaucoma, corneal diseases, diabetic retinopathy, etc., of which millions of cataract surgeries are performed every year. However, clinically, most of the diagnostic and treatment equipment for common eye diseases such as cataracts, glaucoma, and myopia need to be imported, such as AB-type ultrasound diagnostic instruments for lesion imaging and diagnosis of eye structures, femtosecond laser surgical instruments for refractive surgery, and most of the equipment rely on imported brands such as ZEISS, Alcon, and Tuopukang.
Among the 18 imported three types of ophthalmic instruments approved in 2021, 5 are high-end ophthalmic equipment such as femtosecond laser surgical instruments and ultrasonic diagnostic systems, which are significantly different from the number of ophthalmic equipment in the three types of ophthalmic instruments approved in China, and can also reflect the current situation of relying on imported brands for high-end ophthalmology equipment in mainland China to a certain extent.
Judging from the specific market share data, according to the sales amount, the market share of imported ophthalmic equipment suppliers has reached a staggering 98%. Even in terms of the number of sales, the proportion has reached 95%. And according to the data of the General Administration of Customs of China, the trade deficit of China's ophthalmic optical instruments will exceed 620 million US dollars in 2020, and there is a large domestic replacement space.
Second, the sinking market has not yet been activated. Not only are most of the high-end equipment concentrated in hospitals above the second level, but also the small ophthalmic medical equipment necessary for most hospitals is also dominated by imported products, and it can be said that there is obvious sinking space in both users and products.
Third, in the public perception, compared with ophthalmic medical consumables, the market space and purchasing power that medical equipment can bring are weaker than the consumables market, so that the attention of the ophthalmic equipment market is low. However, according to the prospectus of Gaoshi Medical, whether it is the global or domestic ophthalmic medical device market, the market size brought by ophthalmic equipment in recent years has exceeded the market size of ophthalmic consumables, and it is in an overall growth trend.
Based on the above reasons, although the development of the mainland ophthalmic equipment market is obviously lagging behind and most people have a clear understanding of this situation, it is always difficult to quickly solve this problem. In the face of such a situation, what exploration can the industry make?
Look at domestic opportunities from the stone of his mountain
Through the previous analysis, it can be seen that in the field of ophthalmic equipment, the import monopoly is undoubtedly a major problem facing the industry. However, through the analysis of the layout of leading enterprises in the field of foreign ophthalmic equipment, we can explore potential opportunities for the development of domestic enterprises.
In the field of ophthalmic equipment, Carl Zeiss in Germany is a presence that is difficult not to mention, and its ZEISS VisuMax full femtosecond system is currently the only system in the world that can realize "full femtosecond SMILE" laser vision correction surgery, forming a monopoly in the field of full femtosecond surgery. According to the data, as of June 2021, the number of full femtosecond SMILE surgeries performed on the mainland alone has exceeded 2.8 million.
In fact, Carl Zeiss is not a company specializing in medical technology. It is understood that the Carl Zeiss Group has four major business segments: semiconductor manufacturing technology, research and quality technology, medical technology and technical health/consumer optical products, and Carl Zeiss was founded in 1846 to mainly produce precision instruments such as microscopes.
It was not until 1911 that Carl Zeiss and a Swedish doctor jointly developed a slit lamp, which not only laid the foundation for Carl Zeiss to enter the medical field, but also provided the possibility for subsequent Carl Zeiss to focus on the field of ophthalmology.
In 2002, after judging the enormous potential of the ophthalmic market, Carl Zeiss founded Carl Zeiss Meditec AG to offer a complete treatment for ophthalmic diseases. In the subsequent business development process, in order to continue to supplement and enhance its strength in the field of ophthalmology, Carl Zeiss Medical has gradually grown into a giant enterprise in the field of ophthalmology through a series of acquisitions and external cooperation.
An important node in the development of Carl Zeiss Meditec
For decades, Carl Zeiss has rapidly enriched the ophthalmology solutions it can offer in the field of ophthalmology through acquisitions and external cooperation, coupled with the fact that Carl Zeiss has paid great attention to the exploration of optical, precision instruments and microsurgery equipment since its inception, which has also provided a solid technical foundation for the subsequent Carl Zeiss Meditec to develop the field of ophthalmology.
In the process of development, Carl Zeiss Meditec also attaches great importance to the wide coverage of the field, and has developed the intraocular lens business through acquisition methods, strengthening the ability of enterprises to develop at scale.
In addition, from the perspective of the market, the international layout is also an important factor in carl Zeiss Meditec's current achievements. According to Carl Zeiss Meditec's fiscal year 2020/2021 revenue data, more than 70% of Carl Zeiss Meditec's revenue comes from businesses in the Americas and Asia Pacific. It can be said that Carl Zeiss Meditec can achieve a worldwide reputation, in addition to its own underlying technology accumulation, its international layout is also indispensable.
Looking back at domestic enterprises, Tupan Medical and Micro Imaging, which obtained two consecutive rounds of financing last year, initially opened the ophthalmic equipment market with self-developed ophthalmic OCT equipment, and gradually expanded the product line coverage in multiple fields of ophthalmology. At the same time, the two companies have set up global business units and overseas operation research and development centers to lay out overseas markets.
Super-eye Technology, which also received financing last year, took nystagmus treatment as the first direction of the market, and laid out the fields of glaucoma and myopia while making major breakthroughs, and continued to expand the coverage area.
It can be seen that although the market environment faced by domestic and foreign enterprises and the focus of enterprises themselves are different, in terms of the market, most of them have chosen multi-field coverage and global layout to improve service capabilities and scope, thereby promoting the large-scale development of enterprises themselves.
Where do we go?
Nowadays, the heat of the ophthalmology field in the primary market continues to rise, and correspondingly, the "obscure" field of ophthalmic equipment has also received more and more attention from the market, and some enterprises have also started a journey to break through imports and go overseas.
In terms of the market, the sinking market will become an important incremental market in the ophthalmic equipment industry in the future. The "14th Five-Year Plan" National Eye Health Plan (2021-2025) proposes to deepen the counterpart of tertiary hospitals to help county hospitals, continue to carry out activities such as "Guangming Project" and "Guangming Xing", promote the sinking of cataract restoration surgery technology, and improve the cataract restoration surgery capacity of county hospitals. At the end of the "14th Five-Year Plan", more than 90% of the county hospitals that met the recommended standards for the comprehensive service capacity of county-level hospitals carried out cataract restoration surgery, and the cataract surgery rate of millions of people nationwide reached more than 3500.
Therefore, under the guidance of relevant policies in the future, more eye surgery will be popularized to the sinking market, and correspondingly, the demand for ophthalmic medical equipment in medical institutions will continue to grow. Therefore, the future growth market of the ophthalmic equipment industry will be mainly distributed in the sinking market.
In addition, scale will also become the development direction of some enterprises. For a long time, there have been small and scattered problems in the mainland ophthalmic equipment industry, but now some domestic enterprises with core technical barriers continue to expand the market scale through their own technical advantages, and lay out the coverage of multiple product lines, so as to gradually achieve large-scale development and accelerate the process of domestic substitution.
Under the trend of growing market growth and continuous increase in attention, for enterprises in the industry, only by practicing themselves hard and forming real core technical barriers can they seize the opportunity and achieve their own value.
*Cover image source: 123rf