Home News With rising trend of ENT medical devices, Nanos Medical and Chengdu Mechan will build another unicorn

With rising trend of ENT medical devices, Nanos Medical and Chengdu Mechan will build another unicorn

Release time:2019 -12-31

Vcbeat.com learned exclusively that Nanos Medical Technology (Shanghai) Co., Ltd. and Chengdu Mechan Medical Technology Co., Ltd. formally performed a strategic cooperation in recent days, and the parties will make in-depth cooperation in terms of technology, products and services, etc., to jointly create the No.1 platform for domestic surgical medical devices of ear, nose, throat, head and neck (ENT & HN).

ENT is shining a spotlight

In the past 20 years, with the application and popularization of new ENT & HN surgical techniques and minimally invasive surgical instruments, such as lighting system, endoscope and navigation techniques, the global ENT & HN surgery has achieved rapid development.

Affected by air pollution and other environmental factors in recent years, the number of patients with various ENT diseases in China has increased rapidly, up to hundreds of millions. With the overall trend of pursuit of quality of life and consumption upgrading in China, the demand for diagnosis and treatment of ENT diseases in domestic patients has become increasingly obvious with significant increase of payment willingness, greatly promoting the upgrading of medical services and bringing new growth opportunities for the ENT diagnosis and treatment market.

Taking the treatment of tonsillitis by low-temperature plasma ablation for example, low-temperature plasma ablation has less bleeding, less pain, and more comfort and safety than the conventional dissectible surgery (only hundreds of RMB).Although its cost of treatment is about RMB 2,000 higher and no medical insurance can be reimbursed, the procedure meets the patient's need for safe surgery and rapid recovery, so the surgical size is increasing by 30% per year.

The global market size of medical devices will reach USD 477.5 billion in 2020, in which the market share of ENT is about 2%, nearly USD 10 billion. The market size of Chinese medical devices will exceed 760 billion RMB in 2020, in which the market share of ENT is only 1%, less than RMB 10 billion, indicating huge potential of unmet market demand.

At present, the average annual compound growth rate of the market capacity of China ENT-related medical devices is as high as 20%, which is one of the fastest growing areas in all segments of medical device, and the market size of China ENT is expected to exceed RMB 10 billion by 2021.

Since 2010, international medical device giants have been buying ENT bids:

  • Stryker's acquired Arrinex Inc., a startup company that specializes in chronic rhinitis, at the price of USD60 million in February 2019;
  • Stryker acquired Scopis, a company providing surgical navigation system using AR technique in ENT, at a premium in November 2017;
  • Stryker has strengthened its ENT section by acquiring Entellus Medical, a company providing techniques of minimally invasive treatment for chronic nasosinusitis, at the price of USD662 million in cash in December 2017. Stryker included Nasopore, a hemostatic material for ENT made by Polyganics B.V., a Netherlands company.
  • JNJ acquired Acclarent, a producer of sinus dilatation balloon, at the price ofUSD 785 million in 2010;
  • Medtronic is also actively promoting M&A plans for a number of ENT-related manufacturers.

It can be seen that the next 3-5 years will be a perfect timing for the domestic and foreign medical device giants to enter the ENT market and to enhance their future market competitiveness.

About Mechan Medical and Nanos Medical

Chengdu Mechan Medical Technology Co., Ltd., one of our partners, was established in 2002 and successfully listed on the NEEQ on August 18,2015. According to the information of Vcbeat.com, Mechan Medical has products of ENT, orthopedics, urology, ophthalmology, rectum and other departments. At the same time, it registered Mechan Medical (European) Company in the United Kingdom and has mastered the core technology of low-temperature plasma through cooperation with Tomsk Polytechnic University (Russia), University of Electronic Science and Technology of China, Shenyang Ligong University and other universities.

At present, the plasma knife of Mechan Medical is listed as a strategic emerging product by Chengdu Science and Technology Bureau, and has also been approved to build Chengdu academician (expert) innovation workstation. In addition, the company's sales and service network covers the whole country, and its products have been exported to more than 20 countries and regions, such as Europe, Israel, South Korea, Saudi Arabia, and Brazil.

Nanos Medical Group, the other side of the cooperation, founded on August 14,2015 and headquartered in Shanghai, has2 innovative R&D and production enterprises in New District of Suzhou, and just completed tens of millions of RMB B+ round financing in July.

Nanos Medical independently investigates and develops interventional high value consumable materials, improves diagnostic equipment and surgical devices through introduction and acquisition, enhances the market access and competitive barriers of its own products, and provides a complete solution for the development of clinical diagnosis and treatment of ENT. At present, it owns surgical diagnosis and treatment equipment, surgical devices, interventional consumable materials and other product lines in ENT & HN, including more than 20 marketed and developing products, covering 12 product lines of 7 major surgical procedures in ENT & HN surgery.

Aiming at building a behemoth for medical devices in China

Nanos Medical has reached a deep strategic cooperation with Chengdu Mechan Medical, combining its advantages in integrating introduction of advanced products and technology at home and abroad with its own R&D strength, building integrated diagnosis and treatment programs for ENT, and assisting hospitals in improving the construction of departments and training of surgical procedures, etc., with Mechan Medical’s leading R&D strength in existing low-temperature plasma energy platform and nationwide otolaryngologist resources, complementing and fusing channel network, jointly improving the brand influence of Nanos/Mechan in national ENT medical device market, and enhancing Nanos/Mechan integrated R&D, production and sales capabilities in ENT field.

At present, the model of integrated solution for medical devices will gradually become the mainstream in the ENT diagnosis and treatment market. The collaboration and support of multiple products within the integrated solution is conducive to the further enhancement of the efficiency in marketing, company operations and product R&D by Nanos/Mechan. After the completion of the layout in target market, the internal compatibility characteristics of the Nanos/Mechan integrated solution will create effective access restrictions for other competing products and future manufacturers.

However, for the domestic ENT manufacturers who focus on single products, it is a huge challenge to independently complete the R&D and rapid iteration of various products and techniques contained in the integrated solution.

As the only medical device platform company in China that focuses on ENT diagnosis and treatment, Nanos/Mechan has a combination of industrial collaboration, own R&D and authorized introduction, and a fusion and innovation capability on such basis. For example, Nanos/Mechan has integrated magnetic navigation probe with sinus dilatation balloon catheter and with plasma knife head, bringing otolaryngologists a more safe, effective, convenient and comfortable surgical experience to meet the needs of carrying out day surgery and outpatient surgery in hospitals at all levels, especially in primary hospitals.

In the foreseeable5Gera, real-time remote consultation and surgeries, remote robot surgeries and so on aspects between 3A hospitals and primary hospitals will be gradually realized. In the future, Nanos/Mechan will deeply develop the domestic ENT market valued tens of billions of RMB based on integrated solutions, while further expanding the international market, aiming at creating another behemoth in the field of medical devices in China.