Leop (Beijing) Medical Devices Co., Ltd. (hereinafter referred to as 'Leop Medical') was officially listed on the Swiss Stock Exchange at 9:00 am on September 21, 2022, Switzerland time, with a final issue price of $12.68 per share for its Global Depositary Receipts (GDRs). The company issued a total of 17,684,396 GDRs, representing 88,421,980 underlying A-share shares, raising approximately $224 million in total funds.
During the listing process on the Hong Kong Stock Exchange, 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 writing relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important sections), facilitating communication between the issuer, investment banks, and other intermediaries with the Hong Kong Stock Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.
The necessity of whole-life-cycle management of cardiovascular diseases
Cardiovascular diseases are highly prevalent in China, with the disease burden ranking first. Affected by population aging, it is expected that the disease burden will further increase. Cardiovascular diseases are characterized by high prevalence, high disability rate, and high mortality rates, and patients should start disease prevention as early as possible. Some cardiovascular diseases progress rapidly, and patients should go to the hospital for diagnosis and treatment as soon as they feel unwell to avoid sudden cardiac death and cardiogenic shock. After surgical treatment, emergency patients need to receive cardiac rehabilitation therapy. Continuous postoperative monitoring and long-term medication can improve prognosis to a certain extent, prevent recurrence, and reduce mortality rates. Therefore, drugs, medical devices, and healthcare services all play an important role in the whole life cycle management of cardiovascular diseases.
The necessity of whole-life-cycle management of cardiovascular diseases
Data source: Analysis by Frost & Sullivan
China Coronary and Cardiac Interventional Surgical Devices Market
Coronary and cardiac interventional surgical instruments include coronary intervention devices, structural heart disease intervention devices, cardiac electrophysiological intervention devices, as well as other access and auxiliary devices. In 2021, the market for coronary and cardiac interventional surgical instruments in China was approximately 239 billion yuan. Driven by multiple factors such as frequent issuance of national incentive policies and increased R&D investment by domestic manufacturers, domestic manufacturers are gradually breaking the import monopoly and continuously innovating. Innovative products are expected to further drive the growth of the Chinese market for coronary and cardiac interventional surgical instruments.
Coronary artery stent
Coronary artery stents, as commonly used medical devices in percutaneous coronary intervention (PCI), can support narrowed blood vessels to improve blood flow supply. Manufacturers continue to invest in research and development of materials, performance, and patient outcomes for coronary artery stents, evolving from the initial bare metal stent (BMS), to drug-eluting stents (DES) with added drug coatings, and then to bioresorbable stents (BRS) that can degrade within the patient's body after implantation. Bioresorbable stents can maintain vascular patency while avoiding permanent retention of foreign implants in the blood vessels, which will reduce the likelihood of lifelong medication, restenosis, subsequent surgery complications, and imaging damage for patients with cardiovascular diseases, bringing a new treatment option to these patients. Lepu Medical's NeoVas is China's first approved bioresorbable stent, and as of now, there are two bioresorbable stents approved for marketing in China.
In 2021, the market for drug-eluting stents in China was approximately 1.7 billion yuan, while the market for bioabsorbable stents was about 400 million yuan. With the gradual deepening of the concept of 'intervention without implantation', the market for bioabsorbable stents in China is expected to grow further and is likely to surpass that of drug-eluting stents.
Coronary balloon catheter
Against the backdrop of the gradual deepening of the concept of 'intervention without implantation', the combined application of coronary interventional surgical instruments has been strengthened, solving the problem of complex cardiovascular diseases. Coronary balloon catheters are mainly divided into ordinary balloon catheters, drug-eluting balloon catheters, and special balloon catheters. Cutting balloons are a type of special balloon catheter that combines microsurgical cutting with the balloon dilation mechanism. They can fully dilate the balloon at relatively low pressure. After the balloon is dilated, a blade is exposed and cuts longitudinally along the vessel wall to remove coronary artery plaques. This allows for the orderly dilation of severely stenosed blood vessels and confines the damage caused by balloon dilation to the incision site, reducing the possibility of irregular tearing and severe dissection to a certain extent. It creates favorable surgical conditions for patients with severely stenosed blood vessels who need coronary stent implantation and provides new possibilities for patients with coronary atherosclerotic lesions, mild to moderate calcified lesions, in-stent restenosis, small vessel lesions, and other lesions that cannot be fully dilated.
In China, there are currently only three coronary cutting balloons on the market, with Lepu Medical's Vesscide being the only domestic one. In 2021, the Chinese coronary cutting balloon market was approximately 500 million RMB. It is expected that with the enhanced application of the coronary intervention device product matrix, the market for coronary cutting balloons will further climb in the future.
Coronary Flow Reserve Fraction System (FFR)
Affected by the increasing health awareness of patients and the implementation of national support projects related to 'Precision PCI', the concept of 'Precision PCI' has been further promoted and popularized. The enhancement of awareness of 'Precision PCI' will promote the development of precision coronary diagnostic devices such as FFR, providing important support and key guidance for coronary interventional treatment surgeries and postoperative management.
FFR is a functional and physiological indicator for evaluating coronary blood flow. It refers to the ratio of the maximum blood flow that can be obtained in the myocardial area supplied by the coronary artery to the maximum blood flow that could theoretically be obtained without stenosis under normal conditions. FFR reflects the relationship between stenotic coronary arteries and myocardial perfusion. The pressure difference at the site of stenosis can reveal the physiological impact of coronary stenotic lesions on myocardial perfusion, thereby assisting doctors in evaluating ischemia caused by coronary stenosis from a functional perspective, accurately identifying stenotic lesions that cause myocardial ischemia and have functional significance, and providing patients with the best treatment plan.
Based on measurement method classification, FFR can be divided into pressure microcatheter/pressure microfiber FFR and imaging-based FFR. Pressure microcatheter/pressure microfiber FFR has the characteristics of high measurement accuracy, which can greatly enhance the safety and effectiveness of interventional treatment, but its research and development technology is more challenging.
FFR based on imaging can be divided into coronary angiography-based FFR, intravascular ultrasound (IVUS)-based FFR, and OCT (Optical Coherent Tomography)-based FFR according to imaging technology. This type of FFR can combine medical imaging with algorithms for calculation.
Leopu Medical has also deployed pressure microcatheters/pressure microguidewires FFR and image-based FFR, providing patients with diverse options. To date, both of Leopu Medical's FFR products are in the registration phase.
Chinese pharmaceutical market
In 2021, the Chinese pharmaceutical market reached 1,591.2 billion yuan, of which the cardiovascular disease drug market accounted for 11.9%. Cardiovascular diseases are the result of the combined action of multiple risk factors, and basic preventive measures should be appropriately taken according to the type and specific circumstances of each patient's disease. Leopu Medical is one of the platforms with the most comprehensive management medications for cardiovascular-related diseases in China, mainly covering areas such as antithrombotics, lipid-lowering, blood pressure-lowering, blood sugar-lowering, and anti-heart failure.
Clopidogrel is a representative antithrombotic drug and the most commonly used oral P2Y12 receptor antagonist in China. It is suitable for patients with acute coronary syndrome and recent myocardial infarction. It has a strong antithrombotic effect and takes effect quickly. Atorvastatin is a representative statin drug. It has characteristics such as good efficacy in reducing low-density cholesterol and a longer metabolic cycle, and is widely used in the treatment of hypercholesterolemia and coronary heart disease.
From the end of 2019 to the beginning of 2020, the centralized procurement of clopidogrel and atorvastatin was gradually implemented, having a certain impact on the market in 2020. A total of four clopidogrel products were included in the centralized procurement, with an average reduction of 66.84%. Among them, the product from Lepu Medical had the smallest reduction, at 56.77%; a total of five atorvastatin products were included in the centralized procurement, with an average reduction of 88.47%. Among them, the product from Lepu Medical had the smallest reduction, at 82.6%. Both clopidogrel and atorvastatin are basic medications for cardiovascular diseases, and there is a continuous and widespread demand for them. After the centralized procurement, patients' accessibility to clopidogrel and atorvastatin has been further enhanced, causing the Chinese clopidogrel market and atorvastatin market to resume an upward trend in 2021, with the markets reaching 63 billion yuan and 97 billion yuan respectively.
China's medical service market
The provision of medical services is inseparable from the sale of pharmaceuticals and medical devices. Pharmaceuticals and devices can serve as carriers of services, bringing direct therapeutic effects to patients. Services can optimize the selection of pharmaceuticals and devices, provide more targeted disease solutions for patients, and promote the sale of these products. With the increasing health awareness of patients, their emphasis on chronic disease management is gradually increasing, and the demand for chronic disease management is also growing day by day. In 2021, the chronic disease management market in China reached 3,567.4 billion yuan, with a digital migration rate of 6.7%. With the improvement of per capita disposable income and the development of digital health management, the future chronic disease management market and its digital migration rate will further climb.
The AI-ECG platform is an electrocardiogram (ECG) artificial intelligence automatic analysis and diagnosis system independently developed by Leopu Medical. It is the world's first AI-based ECG product to be approved by the US FDA, EU CE, and China NMPA. The AI-ECG platform utilizes artificial intelligence technologies such as deep convolutional neural network models to convert massive amounts of ECG data into analyzable data. Through this data, it assists in more accurate automatic analysis and diagnosis of ECGs, covering areas such as arrhythmia, atrioventricular hypertrophy, myocardial ischemia, and myocardial infarction. The AI-ECG platform can assist a large number of grassroots hospitals, physical examination centers, nursing homes, and other institutions in achieving rapid ECG analysis and diagnosis, improving diagnostic efficiency and standards, optimizing medical resource allocation, realizing localized patient treatment, and reducing the difficulty of seeking medical care for patients. Moreover, the AI-ECG platform can provide home monitoring for patients to ensure timely medical intervention.
Workflow Diagram of AI-ECG Platform
Data source: Analysis by Frost & Sullivan
Frost & Sullivan, integrating 61 years of global consulting experience, has dedicated 24 years to serving the booming Chinese market. 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 advice, strategic consulting, management consulting, and other services to hundreds of outstanding domestic and international biopharmaceuticals, medical devices, healthcare services, and internet healthcare companies. Successful listings include: Dingdang Health (9886.HK), Bioriginal (2315.HK), Zhiyun Health (9955.HK), MeinGene (6667.HK), Prenetics (PRE.NASDAQ), Yunkang Group (2325.HK), Rike Biotech (2179.HK), Lepu Biotech (2157.HK), Clear Medical (1406.HK), Baxin An (2185.HK), Yonghe Medical (2279.HK), Kailaiying (6821.HK), Beihai Kangcheng (1228.HK), Gusheng Tang (2273.HK), Yingpeng Technology (2251.HK), Clover Biotech (2197.HK), Minimally Invasive Robotics (2252.HK), Harmony Cayman (2256.HK), Kunbo Medical (2216.HK), Xianruida (6669.HK), Kangsheng Global (9960.HK), Yimaitong (2192.HK), Tengsheng Bo Yao (2137.HK), Canopy Biosciences (2162.HK), Chaoyu Eye Hospital (2219.HK), Guichuang Tongqiao (2190.HK), Hua Huang Medicine (0013.HK), Koi Pharmaceutical (2171.HK), Zhaoke Ophthalmology (6622.HK), Nature Pharmaceuticals (UPC.NASDAQ), Sainser Pharmaceutical (6600.HK), Zhaoyan New Drugs (6127.HK), Novogene Health (6606.HK), Tianyan Pharmaceuticals (ADAG.NASDAQ), Beikang Medical (2170.HK), Jianbimiao Miao Miao (2161.HK), Minimally Invasive Heart Center (2160.HK), Rui Li Medical Beauty (2135.HK), Jiake Pharmaceutical (1167.HK), Hepcon Pharma (2142.HK), JD Health (6618.HK), Deqi Pharma (6996.HK), Rongchang Biotech (9995.HK), WuXi AppTec (2126.HK), XianSheng Pharmaceutical (2096.HK), Yunding New Energy (1952.HK), Jiahe Biotech (6998.HK), Zai Ding Pharma (9688.HK), Ocular Biotech (1477.HK), Yongtai Biotech (6978.HK), Haipu Pharmaceutical (9989.HK), Keping 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), Dongyao Pharmaceutical (1875.HK), Yasheng Pharmaceutical (6855.HK), Fuhong Hanlin (2696.HK), Hansoh Pharmaceutical (3692.HK), Mabtech Pharma (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), Hua Ling 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. These include: Aopuaimai Biotechnology (688293.SH), MicroPort Neurophysiology (688351.SH), Mengke Pharmaceutical (688373.SH), Yifang Biotechnology (688382.SH), Jicui Yaokang (688046.SH), Haichuang Pharmaceutical (688302.SH), Rongchang Biotechnology (688331.SH), Rendu Biotechnology (688193.SH), Shouyao Holdings (688197.SH), Heyuan Biotechnology (688238.SH), Yaxin Security (688225.SH), Xidiwei (688173.SH), Mawei Biotechnology (688062.SH), Yahong Medicine (688176.SH), BeiGene (688235.SH), Jiahe Meikang (688246.SH), Dizhe Medicine (688192.SH), Novogene (688105.SH), Chengda Biotechnology (688739.SH), Geke Micro (688728.SH), Huaxi Biotechnology (688363.SH), Junshi Biotechnology (688180.SH), Zhejiang Oncology (688266.SH), BeiGene (688177.SH), Shenzhou Cells (688520.SH), and others. They 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 health industry, and build a healthy future.
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