The 18th Frost & Sullivan China Growth, Innovation and Leadership Summit and the 3rd New Investment Conference Life Sciences New Investment Summit Forum were held in Shanghai from August 28th to 29th, 2024. The forum brought together more than 40 industry leaders, biopharmaceutical companies, medical device companies, investment institutions, and professional service providers. With the theme of 'Adapting to Changes and Opening New Horizons', the participants discussed new models of investment cooperation, aiming to build a closer, more efficient, and win-win cooperation network to jointly promote the vigorous development of the domestic and international life sciences industry.
At this forum, Zhou Zuyu, General Manager of Rongjing Biotech, delivered a keynote speech on "The Development and Prospects of Medical Device CDMO". The speech mainly focused on two aspects: the uniqueness of medical devices and medical device companies, and the development prospects of medical device CDMO.
Zhou Zuyu, General Manager of Rongjing Biology
The following are the key points from Zhou Zuyu's speech:
The uniqueness of medical devices and medical device companies
Zhou Zuyu pointed out that there are many types and specifications of medical devices, and sales volume among categories is relatively balanced, with few absolute market leaders. The professional fields involved in medical devices are complex, including materials science, electronic engineering, optics, biochemistry, mechanics, etc., and there is low technical relevance between different products. Unlike drug research and development, most medical devices do not involve multiple products being screened to leave the optimal solution; they are basically continuously optimized in a given direction, requiring high standards in the research-development-manufacturing process. Currently, most large global medical device platform companies expand into new product areas through mergers and acquisitions, with a wide variety of product categories. There may be situations where the technical relevance between different products within a company is not high, or even not in the same disciplinary field.
Zhou Zuyu emphasized that large medical device platform companies have unique advantages over market demand and KOL doctors, which leads to the generation of product ideas and concepts. However, there may be shortcomings in rapidly realizing product design and optimization, large-scale, stable, and low-cost production. In addition, the life cycle of medical device products is very long, requiring continuous product iteration and ongoing cost reduction. Medical device CDMOs can assist large medical device companies with supply chain management and product lifecycle management. Therefore, the platformization, mergers and acquisitions expansion of large medical device companies, as well as product innovation by small innovative Medtech companies, have further increased the requirements and demand for CDMO enterprises.
Development prospects of medical device CDMO
Zhou Zuyu stated that the medical device CDMO industry has embraced broad development opportunities. Domain experts empowering MNCs can turn clinical design into products. For example, materials science supports heart valves, optoelectronics aids in disposable endoscopes, and new technologies fuel electrophysiology, CGM, and other fields. Overseas medical device CDMOs are significantly accelerating. However, the medical device CDMO industry is gradually forming a differentiated landscape, with EMS (Electronic Manufacturing Services) represented by Flex and Sanmina, and device CDMOs represented by Integer. There are very few CDMO platforms that can serve large international medical enterprises with high quality and capabilities.
Zhou Zuyu summarized the characteristics that MNC values when looking for CDMO partners for medical devices into the following aspects: First is the discipline-based R&D capability and expertise, followed by the integrated ability from design to mass production, especially the application of automation technology. Additionally, platform value and scale effects are crucial, as they can bring about cost advantages. Furthermore, the speed of response to market changes and the scalability of production capacity are also key factors, along with supply chain management capabilities. MNC places great emphasis on the quality and safety regulatory systems of medical device CDMOs, such as GMP, ISO13485, as well as FDA and CE compliance, to ensure smooth integration and cooperation.
Zhou Zuyu pointed out that the growth and development path for medical device CDMO companies is as follows: First, they empower customers through their existing technical accumulation and mass production experience in specialized fields, and win customer recognition through quality management systems. Second, after entering new fields through mergers and acquisitions, they replicate existing R&D, mass production, and quality control management experiences to further expand. Finally, they achieve cross-field development and category expansion, vertically tapping into the needs of existing customers while horizontally expanding into new customer groups.
