Medical consumables manufacturers have a hard time.
In November 2020, on the basis of summarizing the centralized procurement of high-value medical consumables at the local level, the mainland carried out the national collection of coronary stents for the first time, and the price of the winning coronary stent products dropped from the average price of about 13,000 yuan to about 700 yuan, a decrease of more than 90%.
Under the high-pressure situation of collection and mining, the field of consumables represented by orthopedics has also been involved in a major reshuffle.
On March 21, the Beijing-Tianjin-Hebei "3 + N" Alliance carried out the linkage procurement of orthopedic trauma medical consumables, with the participation of a total of 16 provinces, autonomous regions and municipalities across the country, with a total procurement volume of 1.0857 million sets, and a total of 89 enterprises were selected for 20026 products.
Among them, the lowest price is only 5.51 yuan (shallow thread screw-2), the highest price is 2059.96 yuan (with bone marrow internal nails), and the average price of orthopedic trauma medical consumables is reduced by 83.48%.
In this wave of linkage with provincial hospitals with volume procurement, the price of orthopedic trauma consumables has completely ushered in a record low. In the face of the severe industry situation, consumables manufacturers may collectively usher in a wave of mergers and acquisitions.
Where is the way out for medical consumables manufacturers?
Yang Zhenjun, managing partner of Haoyue Capital, told Medical Health AI Nugget Jinzhi, "Nowadays, [orthopedic consumables manufacturers] are acquired by surgical robot companies, which is a good choice. ”
In the short term, consumables lean robots can not only obtain the second curve of their own development, but also enable robot companies to obtain stable cash flow and promote the transformation of revenue structure. Judging from the growth trajectory of Da Vinci, the model of "robot + consumables + service" may usher in a new change in the medical industry.
The "Mutual Fulfillment" of Medical Robots and Consumables
The merger and integration of medical robot companies and consumable companies has long been given reference samples in foreign markets.
According to the incomplete statistics of "Medical and Health AI Nuggets", in the past ten years, Medtronic, Google, Johnson & Johnson, Zimmer, Xerox, Siemens, Stryker, CRM Surgical and other traditional leading companies have completed the layout in the field of surgical robots through acquisitions, mergers and acquisitions and integration with their own systems.
Among them, acquisitions in the field of orthopedic robotics are the most frequent.
A representative case of the acquisition of robot companies by the four major foreign instrument giants
Take Medtronic, the world's largest manufacturer of medical devices, for example. In 2018, Medtronic purchased Israeli orthopedic robotics company Mazor Robotics and its robotic-assisted surgical platform for $1.6 billion in cash.
Within a month of the acquisition, Medtronic launched the Mazor X Stealth Robotic-Assisted Spine Surgery Platform in the U.S., which not only expanded Medtronic's leadership position in the spine surgery market, but also accelerated its R&D for robotic-assisted procedures.
After a year of product technology digestion, in 2019 Medtronic introduced the Hugo Ras modular laparoscopic surgical robotic assistance system.
With the introduction of both robots and assistance systems, Medtronic's consumables capabilities are greatly demonstrated: not only is the robotic arm design flexible, but the end effector is also very compatible with the company's existing product portfolio.
This design, which allows doctors to not have to spend effort to adapt to new devices, is also seen by industry insiders as an important advantage of Medtronic's challenge to leonardo da Vinci.
Compared with Leonardo da Vinci's ten-year cycle of robot product iteration, Medtronic has compressed the cycle of robot products to market to a shorter time.
Yang Zhenjun said, "Many consumables companies are optimistic about a direction, but they do not necessarily do this thing completely on their own, and mergers and acquisitions are a shortcut." As a result, the global medical device giants have acquired at least one robotics company. ”
In Yang Zhenjun's view, the traditional orthopedic consumables field has developed for decades, and there is relatively little industry innovation, but if it is effectively integrated with robots that represent digitalization, intelligence, minimally invasive and precise, it can open a new channel for consumables innovation, and then walk out of the company's second curve.
After the two are compatible, on the one hand, they can maintain their own rapid growth momentum, consolidate the existing growth highlights of the enterprise with their comprehensive consumables and advanced robot technology, and stimulate the weak market business; on the other hand, they can also maintain their huge market value while actively expanding the rapid development space of the next track.
Nowadays, the logic of "mutual perfection" between orthopedic robot manufacturers and consumables suppliers is also staged in the Chinese market. However, this idea is a little different.
China has a very different set of acquisition logic
From the perspective of the development direction of orthopedic surgical robot companies, in the short term, equipment sales are the mainstay, but in the long run, consumables will become the main source of income.
In 2020, the domestic surgical robot market sales of the system accounted for 55.8%, consumables accounted for 38.2%; but in the same year, the US market robot revenue accounted for only 25.3%, consumables accounted for 57.7%.
As the surgical robotics industry continues to mature, the revenue methods of such companies will gradually evolve into "consumables-driven robots".
In Yang Zhenjun's view, foreign countries have long been in accordance with the form of "consumables companies to acquire robots", but domestic consumables companies have not formed a relative monopoly, the acquisition form is likely to be diametrically opposite, we will see the "robot company acquisition of consumables company" transaction occurs.
He gives two reasons from the perspective of the buyer and the seller.
First of all, should domestic consumables companies be acquired?
Nowadays, the pressure on domestic consumables can be imagined. On the one hand, the price has shrunk greatly under the background of consumables collection, and the income and profit growth space has been condensed and compressed, on the other hand, it is intelligent and precise, improving the success rate, effect and shortening the doctor's learning curve of surgery.
The ceiling of medical device products is low, the volume and market value of most companies are relatively small, and the industry concentration is low. For a long time, the huge population and huge medical market in the mainland have provided a piece of space for the survival of small low-value consumables companies.
Just like last year's national joint belt volume procurement, 48 companies participated in the bidding, the highest manufacturer market share was only 16%, and the market was highly fragmented.
With the implementation of the joint and joint belt volume procurement last year, although 44 were selected, the 82% price reduction will make the winning and non-winning small and medium-sized enterprises face the pressure of survival.
The valuation of consumables companies has been greatly reduced, and manufacturers that have not entered the collection catalog face exiting the market.
Therefore, a wave of "fire sales" is expected to occur in the market. Only a few companies with advantages or characteristics in products and technologies, market share, or characteristics will be acquired or integrated, and the rest will disappear.
In Yang Zhenjun's view, in the next period of time, there will be an optimal window for "the market value of robots to go up and the market value of consumables to go down".
Second, does the surgical robot company need to acquire?
From the perspective of industrial iteration and hospital demand, surgical robots are in line with the development trend of the times. However, in contrast, the consumables industry has been weak in innovation for many years.
"Over time, robot products will definitely go from 'adapting' to 'redefining' consumables." Yang Zhenjun said.
At the same time, there is also a very interesting phenomenon: foreign robot systems are almost closed, using their own consumables; but the domestic robot systems are basically made into an open platform, and it is expected to be made into robots that can be applied to various consumable manufacturers. In this way, hospitals will be more inclined to choose domestic companies when choosing robot companies.
This point is not difficult to understand, foreign robot systems are based on the parent company of consumables, it is necessary to "bring goods" to the parent company.
However, the domestic consumables products are scattered, each hospital has multiple companies of consumables in use, it is difficult for the hospital to purchase a foreign-funded enterprise robot of more than 20 million, and only use the company's consumables.
In addition, the development of domestic robots is relatively late, and there are fewer companies with consumables and robots at the same time, and the domestic mainly minimally invasive medical and Huakerun companies belong to this type of company.
Taking intuition surgery, an example of a successful commercialization case in the field of surgical robotics, the acquisition of consumables, robots and services accounted for 50%, 35% and 15% of the revenue structure, respectively.
The revenue evolution model of other orthopedic surgical robots will not be an exception. In order to become an excellent enterprise, robots should also integrate consumables companies to make their robot "golden chicken" "golden eggs".
At the same time, to meet the demands of future robots to redefine consumable products and tools for surgery, robot companies are also required to have genes that can develop and produce consumables.
The cross-border and integration of the industry, when to shoot is the best time point
Under the background of the collection of high-value consumables in orthopedics, orthopedic surgical robots are becoming a key node in the great changes in the industry.
In recent years, 6 domestic orthopedic robot products have been listed, such as Tianzhihang, Xinjunte, Jianjia, and Huaruibo. It is expected that by 2023, there will be a number of products that can successfully "get the certificate".
After the market cultivation in previous years and the outbreak of the collection policy dividend, Beijing has officially included orthopedic surgery into medical insurance in October last year, and various provinces across the country have been included in the charging directory, and the surgical volume of orthopedic robots is expected to exceed 500,000 units in 2026, and the cumulative installed capacity is expected to reach 2,000 units.
Orthopedic surgical robot product approved by NMPA
On the whole, the orthopedic robot market with a scale of more than 10 billion has become the next blue ocean market. At present, relatively mature products such as Tianzhihang, Minimally Invasive Medical, and Jianjia have appeared in China.
Although orthopedic surgical robots are regarded as in their prime, their commercialization ability is still a variable.
In the surgical robot industry, whether at home or abroad, the commercialization trend must be around the "equipment + consumables + services" to create a closed loop, the acquisition of consumables is a key step. In the next step, we can focus on the direction of intelligence, consumables, core components, etc., take the platform as a major trend, and truly usher in the surgical robot of human-computer interaction.
The business model and future development mode of surgical robot, picture source Yang Zhenjun medical robot conference speech
One is to be able to continuously improve the layout of the industrial chain, and the other is to find a more stable cash flow for robot products, and to turn the past idea of "using drugs and machinery to raise machines" into "robots feeding back their prostheses and consumables sales".
"The industrialization risk of a highly complex system such as a surgical robot is from small batches to large-scale. It is not a quantitative change, but a qualitative change. Yang Zhiwen, investment partner of Yuanhe Origin Point, once sighed at the 2022 China Medical Robot Industry Innovation Conference at the beginning of this year.
"At present, it is a window period for industry integration, and it is expected that excellent investors can help high-quality surgical robot companies and accelerate the integration of consumables companies." When the integration to a certain stage, the rise of domestic robots really came. Yang Zhenjun said.
Because the robot originally represents the direction of the future, in the long run, the future will be the robot to endow energy consumption materials, by the robot to define the consumables, bringing a new era of medical treatment.
In the future, the surgical robot track will require the joint efforts of investors, robots and consumables.
Yang Zhenjun predicted: "Within 5 years, the domestic robot acquisition of consumables will definitely happen, and the specific time point cannot be predicted, which is a result of multi-party operation." ”
For example, whether the valuation of consumables companies has been hit to the lowest, who are the competitors at the time of acquisition, whether they will raise transaction prices, and whether education-like reform policies have fallen to the side of surgical robots.
The story of vertical and horizontal has existed since ancient times. In the future, the acquisition and acquisition of surgical robots and medical consumables will continue to be staged.
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