Kangfeng Biotechnology (Shanghai) Co., Ltd. (Stock Code: 6922.HK) successfully listed on the main board of the Hong Kong capital market on December 30, 2022. The company is a medical device company focusing on minimally invasive interventional cryotherapy, established in 2013. It has built a comprehensive product portfolio, including two core products, the bladder cryoablation system and endoscopic stapler, 15 other research and development products, and 6 commercial non-cryotherapy products. One of its core products, the bladder cryoablation system, was approved by the National Medical Products Administration in June 2022 and is the only approved commercial product for cryotherapy after transurethral resection of bladder tumors. Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') provides exclusive industry advisory services for the listing of Kangfeng Biotechnology (Shanghai) Co., Ltd., and hereby warmly congratulates them on their successful listing.
Kangfeng Biotechnology (Shanghai) Co., Ltd. (hereinafter referred to as 'Kangfeng Biotech') successfully listed on December 30, 2022. The company plans to issue 11.11 million H shares, of which 90% will be international offerings at an issue price of HK$18.90 per share, raising a net amount of approximately HK$139.9 million.
During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), helping the issuer complete communication with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange, etc.
Investment highlights
The company is an advanced medical device company based on a cryotherapy technology platform;
The company has made in-depth and comprehensive arrangements for two high-growth treatment areas: endoscopic surgery through natural orifices and vascular intervention, creating a comprehensive product portfolio;
The company has strong R&D capabilities and a patent layout that matches its strategy, empowering rapid innovation of products;
The company has continuously enhanced commercial capabilities and an efficient production system, possessing end-to-end comprehensive capabilities;
The company has a management team with rich industry experience and profound professional knowledge.
According to the Frost & Sullivan report, as of 2021, the company:
Possesses the unique technology in the world that enables the application of low-pressure liquid nitrogen to balloon cryoablation systems;
It is the only market participant in China with investigational spray cryotherapy and cryoballoon ablation devices for the treatment of solid tumors;
The company's product, the endoscopic stapler, is one of only three approved super-wide staplers (OTSC) in China;
It is one of the four companies in China conducting clinical trials on cryoablation devices for treating atrial fibrillation.
Market Overview of Interventional Cryotherapy Instruments
Overview of Interventional Cryotherapy
Cryotherapy is a treatment method that destroys abnormal cells or diseased tissue by freezing them at extremely low temperatures. Interventional cryotherapy is a minimally invasive treatment or biopsy procedure, which can be divided into cryoablation and cryosclerotherapy based on the purpose of freezing. Cryoablation typically uses a catheter or probe to deliver a cryogenic agent to the treatment site, utilizing extremely low temperatures to freeze the target cells, causing cell damage and death, thereby achieving therapeutic effects. Cryosclerotherapy, on the other hand, uses the strong adhesion force generated by low temperatures to remove diseased tissue.
Global and Chinese market share of cryotherapy devices
The market scale of interventional cryotherapy devices is on the rise. The global market size for interventional cryotherapy devices increased from $8.529 billion in 2016 to $14.767 billion in 2020, with a compound annual growth rate of 14.7%, and is expected to reach $138.772 billion by 2030. In China, the market scale for interventional cryotherapy devices increased from RMB 9.8 million in 2016 to RMB 3.908 billion in 2020, with a compound annual growth rate of 41.3%. It is expected that by 2025, it will further climb to RMB 28.908 billion, with a compound annual growth rate of 49.2%, and by 2030, it will further grow to RMB 112.339 billion, with a compound annual growth rate of 31.2%.
Market Overview of Bladder Cancer Interventional Cryotherapy Instruments
Incidence of bladder cancer
The number of bladder cancer cases in China increased from 77,100 in 2016 to 85,700 in 2020, with a compound annual growth rate of 2.5%. It is expected that the number of bladder cancer cases will grow to 101,100 by 2025, with a compound annual growth rate of 3.4%, and further reach 117,600 by 2030, with a compound annual growth rate of 3.1%.
Source: Frost & Sullivan report
Global and Chinese Market Size of Bladder Cancer Interventional Cryotherapy Catheters
The global market size for interventional cryotherapy catheters for the treatment of bladder cancer is expected to increase from $0.4 million in 2022 to $3.635 billion in 2030. The market size for interventional cryotherapy catheters for the treatment of bladder cancer in China is expected to grow significantly from RMB 27 million in 2022 to RMB 3.557 billion in 2030.
Market growth will be mainly driven by the increasing incidence of bladder cancer, the growing number of patients with potential recurrence after transurethral resection of bladder tumors, and the demand for secondary surgical treatment to reduce recurrence rates.
Competitive landscape of interventional cryotherapy devices for solid tumors
As of the latest practicable date, there are only seven commercial interventional cryotherapy products for the treatment of solid tumors globally. Five of these have been approved by the National Medical Products Administration (NMPA), all of which involve percutaneous insertion of cryogenic catheters into the body to freeze and thaw the target tissue, creating an incision on the skin.
The products of Kangfeng Biotechnology (including the bladder cryoablation system, esophageal cryospray therapy system, and gastric cryoablation system) use cryogenic balloons or spray cryotherapy through natural orifices, along with flexible catheters (rather than percutaneous cryoablation probes), to perform ablation therapy minimally invasively. This method is safer than percutaneous cryoablation, with less bleeding and side effects, and a lower probability of postoperative complications.
Endoscopic clip market overview
Overview of Endoscopic Clips
Endoscopic clips are a type of flexible endoscope in the form of a metal clip, used in standard gastrointestinal endoscopic treatment. There are two types: through-the-scope clip (TTSC) and over-the-scope clip (OTSC). Compared to TTSC, which can only be used to close small defects less than 1 centimeter in size, OTSC can fully close defects up to 2 centimeters in size, including those with marginal eversion. Common indications for endoscopic clips include ulcers, diverticulum bleeding, bleeding or high-risk polyp resection sites, etc. In terms of gastrointestinal bleeding or perforation, the number of people suffering from gastrointestinal bleeding or perforation in China was 967,900 in 2016 and rose to 1,008,200 in 2020, with an expected increase to 1,090,600 by 2030.
Global and China Endoscopic Clip Market Size
The market scale of endoscopic clips in China increased rapidly from RMB 9.87 million in 2016 to RMB 2.925 billion in 2020, with a compound annual growth rate of 31.2%. It is estimated that the market scale of endoscopic clips will increase to RMB 5.711 billion by 2025, with a compound annual growth rate of 14.3%, and further reach RMB 11.244 billion by 2030, with a compound annual growth rate of 14.5%. The global overall market scale of endoscopic clips will increase from $3.467 billion in 2020 to $13.177 billion by 2030.
Due to the early development stage of the super clip market and the relatively high prices set by market participants, the current market share of super clips is very small compared to the overall endoscopic clip market. In 2020, the overall endoscopic clip market in China was valued at RMB 2.925 billion, with the super clip market accounting for about 0.4% by value and about 0.1% by quantity; globally, the overall endoscopic clip market in 2020 was valued at $3.467 billion, with the super clip market accounting for about 1.7% by value and about 0.5% by quantity.
Competitive landscape of endoscopic clips
As of the latest practicable date, there are 32 commercially available endoscopic clips in China, including three products (i.e., Ovesco's OTSC®SystemSet, Nanjing MicroPort's disposable hemostatic closure clip, and Kangfeng Biotechnology's endoscopic stapler are super-range clips, while the other 29 models are endoscopic forceps-assisted clips. However, Ovesco's super-range clip product has had its registration certificate in China expire.
Data sources: National Medical Products Administration, Public Healthcare Procurement Platform, Frost & Sullivan report
Overview of the Atrial Fibrillation Cryoablation Device Market
Prevalence of atrial fibrillation
A large portion of the Chinese population suffers from atrial fibrillation. According to the literature cited in the 'China Cardiovascular Health and Disease Report 2019', the standardized prevalence rate of atrial fibrillation among people over 35 years old in China is about 0.7%. The number of atrial fibrillation patients in China increased from 1.08 million in 2016 to 1.16 million in 2020, and it is expected to reach 1.36 million by 2025, with a compound annual growth rate of 3.2%. By 2030, it is further projected to rise to 1.66 million, with a compound annual growth rate of 4.1%.
Number of atrial fibrillation ablation surgeries in China
In China, the market for atrial fibrillation cryoablation devices is still in its early stages of development, with enormous growth potential. Against the backdrop of an increasing number of atrial fibrillation patients in China each year, a total of 81,900 atrial fibrillation ablation surgeries were performed in China in 2020, including 9,800 cryoablations and 72,100 radiofrequency ablations. The number of atrial fibrillation cryoablation surgeries in China increased from 2,300 in 2016 to 9,800 in 2020, with a compound annual growth rate of 44.0%, and it is expected to further increase to 224,900 in 2030, with a compound annual growth rate of 36.9%. The proportion of cryoablations in total atrial fibrillation ablation surgeries increased from 7.0% in 2016 to 12.0% in 2020 and is expected to reach 27.6% in 2030.
Source: Frost & Sullivan report
Frost & Sullivan has served a large number of companies in the medical device sector and minimally invasive interventional devices:
Data source: Frost & Sullivan
Frost & Sullivan, integrating 61 years of global consulting experience, has been serving the booming Chinese market with dedication for 24 years. With a global perspective, we help clients accelerate their business growth, achieving benchmark positions in industry growth, innovation, and leadership. The healthcare industry is one of the core areas of focus for Frost & Sullivan. Over the past 20-plus years, the Frost & Sullivan team has provided financing and financial advisory services, IPO industry advisory services, strategic consulting, and management consulting to hundreds of outstanding domestic and international biopharmaceuticals, medical devices, healthcare services, and internet healthcare companies. Successful listings include: IDEC (1244.HK), Meihao Medical (1947.HK), Gao Shi Medical (2407.HK), Lepu Xin Tai (2291.HK), Jian Shi Technology (9877.HK), Health Yuan (JCARE.SW), Lepu Medical (LEPU.SW), Ding Dang Health (9886.HK), Bai Aotu (2315.HK), Zhi Yun Health (9955.HK), MeinGene (6667.HK), Prenetics (PRE.NASDAQ), Yun Kang Group (2325.HK), Rui Ke Biotech (2179.HK), Lepu Biotech (2157.HK), Clear Medical (1406.HK), Bai Xin An (2185.HK), Yong He Medical (2279.HK), Kailai Ying (6821.HK), Beihai Kangcheng (1228.HK), Gusheng Tang (2273.HK), Ying Tong Technology (2251.HK), Clover Biotech (2197.HK), Minimally Invasive Robotics (2252.HK), Harmony Cayman (2256.HK), Kun Bo Medical (2216.HK), Xian Ruida (6669.HK), Kang Sheng Global (9960.HK), Yimai Tong (2192.HK), Teng Sheng Biao Yao (2137.HK), CanSino (2162.HK), Chaopu Ophthalmology (2219.HK), Guichuang Tongqiao (2190.HK), Hua Huang Medicine (0013.HK), Koi Pharmaceutical (2171.HK), Zhao Ke Ophthalmology (6622.HK), Nature Pharmacy (UPC.NASDAQ), Sainser Pharmaceutical (6600.HK), Zhaoyan New Drugs (6127.HK), Novogene Health (6606.HK), Tianyan Pharmaceuticals (ADAG.NASDAQ), Beikang Medicine (2170.HK), Jian Bi Miao Miao (2161.HK), Minimally Invasive Xin Tong (2160.HK), Rui Li Medical Beauty (2135.HK), Jia Kexin Pharmaceutical (1167.HK), Hepo Pharma (2142.HK), JD Health (6618.HK), Deqi Medicine (6996.HK), Rongchang Biotech (9995.HK), WuXi AppTec (2126.HK), Sono Biotech (2096.HK), Yunding New Yao (1952.HK), Jiahe Biotech (6998.HK), Zai Ding Medicine (9688.HK), Ocular Biotech (1477.HK), Yongtai Biotech (6978.HK), Haipu Pharmaceutical (9989.HK), Kuaibo Pharmaceutical (9939.HK), Peijia Medical (9996.HK), Kangfang Biotech (9926.HK), Nuo Cheng Jian Hua (9969.HK), Tian Jing Biotech (IMAB.NASDAQ), Kanglong Chemical (3759.HK), China Antibody (3681.HK), Dong Yao Pharmaceutical (1875.HK), Yasheng Medicine (6855.HK), Fuhong Hanlin (2696.HK), Hansoh Pharmaceutical (3692.HK), Mabot Pharmaceutical (2181.HK), Fangda Holdings (1521.HK), Via Bio (1873.HK), CStone Pharmaceuticals (2616.HK), Junshi Biosciences (1877.HK), WuXi AppTec (2359.HK), Innovent Biologics (1801.HK), Hualing Medicine (2552.HK), BeiGene (6160.HK), Gilead Sciences (1672.HK), WuXi AppTec (2269.HK), China Resources Medicine (3320.HK), Yakuten Scientific Research Pharmaceutical (2633.HK), Hua Huang China Medicine (HCM.NASDAQ), Biotechnology (1548.HK), BBI Life Sciences (1035.HK), etc. In terms of the number of filings, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong's healthcare IPO market, consistently ranking first in market share from 2018 to 2021.
Since the listing of the first batch of companies on the Sci-tech Innovation Board in July 2019, Frost & Sullivan reports have been widely cited in the prospectuses of leading Sci-tech Innovation Board listed companies in the industry, including: Kangwei Century (688426.SH), Jincan Protein (688137.SH), Nuo Cheng Jianhua (688428.SH), Aopu Mai Biotech (688293.SH), MicroPort Electrophysiology (688351.SH), Mengke Pharmaceutical (688373.SH), Yifang Biotech (688382.SH), Jicui Yao Kang (688046.SH), Haichuang Pharmaceutical (688302.SH), Rongchang Biotech (688331.SH), Rendu Biotech (688193.SH), Shouyao Holdings (688197.SH), Heyuan Biotech (688238.SH), Yaxin Security (688225.SH), Xidi Micro (688173.SH), Mawei Biotech (688062.SH), Yahong Medicine (688176.SH), BeiGene (688235.SH), Jiahe Meikang (688246.SH), Dizhe Medicine (688192.SH), Novogene (688105.SH), Chengda Biotech (688739.SH), Geke Micro (688728.SH), Huaxi Biotech (688363.SH), Junshi Biotech (688180.SH), Zhejiang Oncology (688266.SH), BeiGene (688177.SH), Shenzhou Cells (688520.SH), etc., which are considered one of the most powerful, professional, and influential industry research institutions in the sector. We hope to work with enterprises to understand industry trends, seize development opportunities, jointly promote innovation and upgrading of China's healthcare industry, and build a healthy future.
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