Endoscopic technology enters a period of innovation and optimization, with 4K, fluorescence and other technologies becoming breakthrough points

The advancement of minimally invasive surgery is leading a new revolution in the medical field.

Compared to traditional surgical procedures, minimally invasive surgical treatments performed under endoscopy allow for the placement of various instruments such as biopsy forceps, guide wires, and argon tracheas through endoscopic biopsy. Surgical treatment can also be quickly completed, and the advantages of minimal trauma and fast recovery better meet the needs of clinical doctors and patients.

During its 200 year development, the endoscope industry has undergone four major technological innovations, from the initial hard tube endoscope (1806-1932), semi curved endoscope (1932-1957), fiber endoscope (after 1957), to the current electronic endoscope (after 1983). The endoscope industry has entered an innovative and optimized stage to meet the growing medical needs and higher treatment standards. This also means that whoever can achieve breakthroughs first has the potential to take the lead in the endoscope industry.

And technological breakthroughs are themselves oriented towards solving clinical needs.

On the one hand, in endoscopic surgery, the quality of medical image imaging will seriously affect the quality of the surgery. Better imaging results can help better identify lesions and provide targeted treatment. For example, the birth of 4K ultra high definition medical imaging technology, 3D medical imaging technology, and special light (fluorescence) medical imaging technology is precisely to better solve the above problems.

On the other hand, a major challenge in clinical practice is how to reduce cross infection of equipment. Endoscopic equipment, due to its small and long open channel structure, provides a cross infection environment for microorganisms, secretions, and residual blood. Inadequate structure and disinfection can easily lead to cross infection. The invention of disposable endoscope technology is aimed at solving the above-mentioned problems.

With the continuous improvement of image quality and the increasing popularity of clinical applications, endoscopes are developing towards miniaturization, multifunctionality, and high image quality. 3D endoscopes, disposable endoscopes, capsule endoscopes, and ultrasound endoscopes are currently the products with high market attention and will also be the incremental market in the future of the industry.

No.1. 3D Endoscope: From Clear Sight to Deep Sight

With the popularization of endoscopy in minimally invasive surgery, doctors will no longer be satisfied with "seeing clearly", but have also put forward the requirement of "seeing deeply", not only to clearly see the surface of human tissues, but also to see the depth relationship between tissues and organs, providing more accurate images for the surgical process.

Unlike traditional 2D laparoscopes such as 4K and FHD, 3D electronic laparoscopes provide users with depth perception, compensating for the shortcomings of 2D images in spatial positioning and hand eye coordination. 3D laparoscopy can effectively improve surgical accuracy and completion, shorten surgical time, reduce injury incidence, decrease intraoperative bleeding, and improve patients' postoperative recovery level when performing complex surgeries. Especially in the separation of important blood vessels and tissues, lymph node dissection, suturing and knotting, and fine anastomosis operations, it is particularly evident. 3D has become the development trend of abdominal endoscopy.

According to relevant data statistics, a rough estimate of the number and amount of successful bids for laparoscopic products in China shows that in the fourth quarter of 2020, more than 580 sets of laparoscopic systems were sold nationwide, with a turnover of approximately 994 million yuan, an average winning price of 2.04 million yuan, and an average single system purchase price of 1.8 million yuan. Among them, the transaction volume of imported products accounts for about 89.4%, while that of domestic products accounts for about 10.60%. In terms of the proportion of classified product transactions, 4K ultra high definition laparoscopy accounts for 26.97%, 3D laparoscopy accounts for 17.86%, and FHD laparoscopy accounts for 55.10%. It can be seen that in the market competition pattern, FHD laparoscopy is still the main bidding object, and due to cost and technological differences, the market for domestic 3D laparoscopy has not yet opened up.

No.2、 Disposable Endoscope: Consumable Endoscope, Initial Results in Domestic Layout

Traditional endoscopes are difficult to thoroughly clean and disinfect due to their complex structure, which includes multiple small and long open channels. The high cost of sterilization is also unaffordable for hospitals. Outsourcing sterilization generally requires a one week cycle, and low-temperature plasma sterilization is expensive.

Based on this, the World Health Organization agrees that endoscopes for the digestive and respiratory systems do not require sterilization, which makes it easy for the same endoscope to cause cross infection when used between different patients. Related academic research shows that endoscopes rank first in the risk of cross infection of medical devices, with over 70% of endoscopes having issues with cleaning.

Disposable endoscopes have emerged as the best product to address this safety hazard. Its emergence effectively solves the problem of cross infection, and there is no loss of endoscope, which improves surgical efficiency to a certain extent. In addition, the product iteration speed is fast, the doctor's learning cost is low, and the hospital replacement cost is relatively low. Compared with traditional endoscopes, the cost-effectiveness of disposable endoscopes has gradually become prominent.

According to statistics, the types of disposable endoscopes suitable for use mainly include cholangiopancreatoscopy, gastroscopy, cystoscopy, bronchoscopy, nasopharyngoscopy, hysteroscopy, etc., involving multiple departmental scenes such as gastroenterology, urology, respiratory, gynecology, etc. These types of lenses correspond to the potential diagnosis and treatment volume of nearly 70 million cases in China, which is a huge blue ocean market.

With the increasing demand for endoscopic examinations, the disposable endoscope market will also experience rapid development. According to Guangfa Securities' estimation, by 2030, the domestic market size of disposable cholangioscopy is expected to be 1.5 billion yuan, disposable gastroscopy market size is expected to be 4.1 billion yuan, disposable colonoscopy market size is expected to be 200 million yuan, and disposable duodenoscopy market size is expected to be 2 billion yuan.

Some companies have already set sail in this blue ocean. According to incomplete statistics, this article summarizes the enterprises that develop and produce disposable endoscopes, as shown in the following figure:


In addition, the rapid iteration of products has created opportunities for domestic brands to catch up, and the gap between domestic endoscope brands and imported products is currently narrowing. Many domestic companies are already competing in the disposable endoscope market, among which Epson Medical is the first disposable electronic ureteroscope approved by the US FDA in China.

These challengers set sail against the wind, and in the future, they may be able to achieve a curve overtaking in this field, driving import giants off the main stage.

No.3、 Capsule endoscopy: a small yet beautiful unicorn field worth exploring

Capsule endoscope is a medical instrument made in the shape of a capsule, used to examine the human intestine. The traditional invasive examination method of gastroscopy brings great pain to patients and is not suitable for elderly, weak, and critically ill patients. Although anesthesia can achieve painless gastroscopy, it still brings great inconvenience to patients. Capsule endoscopy, on the other hand, does not require anesthesia, is comfortable and safe, and its diagnostic accuracy can achieve the same level as regular endoscopy.

In addition, capsule endoscopy also performs well in avoiding cross infection. It is reported that Anhan Technology, Jinshan Technology, Zifu Medical, and Shangxian Medical have all launched capsule endoscope products and sold them worldwide.

Capsule endoscopy has been in China for over 10 years, and its market size has steadily grown. From 2015 to 2019, the market size of capsule endoscopy increased from 750 million yuan to 1.03 billion yuan. Affected by factors such as the popularization of early screening for digestive diseases, technological advancements, and price reductions, the industry's scale will continue to expand. It is predicted that it will grow to 2.12 billion yuan in 2024. In addition, the capsule endoscopic testing project has been included in medical insurance in Guangdong, Shanghai, Chongqing, Shandong and other regions, and will further promote market expansion in the future.

The barrier to entry for capsule endoscopy technology is high, and there are few market participants. At present, there are 7 mainstream manufacturers, including 4 domestic enterprises (Kingsoft Technology, Zifu Medical, Huachong Technology, Anhan Technology) and 3 import enterprises (Israel Given Imaging, Japan Olympus, and South Korea IntroMedic). At present, no enterprise has formed a dominant monopoly situation.

No.4、 Endoscopic ultrasound: the third eye of digestive endoscopists, with extremely low localization rate

Endoscopic ultrasound, which combines endoscopy and B-ultrasound, involves placing an ultrasound probe in front of the endoscope (gastroscope, colonoscope) or introducing a miniature ultrasound probe through the endoscope's tube. Under direct visualization of the endoscope, ultrasound scans are performed on the walls of the digestive tract (esophagus, stomach, duodenum, colon) or adjacent organs (pancreas, bile duct, gallbladder, liver, etc.).

According to the exchange of medical investors, the market size of endoscopic ultrasonography accounts for about 12% of the whole soft endoscope market. Endoscopic ultrasonography is one of the most high-end lenses in the field of soft endoscope and can solve the most complex endoscopic surgery (such as pancreatic cancer and other relatively complex surgery). Therefore, the price of endoscopic ultrasonography is far higher than that of conventional endoscopy and even gastrointestinal endoscopy with magnification function.

Comparison of prices for conventional endoscopes/magnifying endoscopes/ultrasound endoscopes of the same brand

At present, only Olympus, Pentax, and Fuji have this technology globally, and Kaikai is the fourth company in the world and the first in China to have endoscopic ultrasound technology. At present, its circular array ultrasound endoscope (EG-UR5) and convex array ultrasound endoscope (EGUC5T, combined with the highest end ultrasound host S60) have obtained CE certificates, and the circular array ultrasound endoscope has been registered with NMPA. The EU-10 endoscopic ultrasound diagnostic equipment launched on November 30, 2022 has been approved by the National Medical Products Administration and has obtained the "Medical Device Registration Certificate of the People's Republic of China".

It is worth mentioning that this device can be used with multiple endoscopic ultrasound probes in the fields of digestion and respiration. In terms of the most advanced single crystal probe technology in the ultrasonic field, Kaifeng has also reached the international first-class level, which provides the core technical guarantee for the progressiveness of the entire system performance.

The mainstream price of endoscopic ultrasound equipment in the domestic market exceeds 3.5 million yuan and is only used in tertiary hospitals. The emergence of medical ultrasound endoscopy may break down price barriers and further accelerate the development of this product in China.

Is there an opportunity for new energy vehicles to overtake in the field of endoscopes? What development trends does technological progress bring to the medical endoscope industry?

The penetration rate is only 5.6%, and domestic brands are expected to rise and replace it

According to Frost&Sullivan data, the Chinese medical endoscope market is growing at a relatively high rate compared to the global medical endoscope market, and is expected to continue maintaining a high growth rate. In 2020, the market value of medical endoscopes in China was RMB 23.1 billion, and it is estimated to reach RMB 62.4 billion by 2030, with a compound annual growth rate of 10.50%.

But this market is facing a competitive landscape where multinational giants dominate the market share. According to product sales revenue statistics, the three major market participants Olympus, Karl Storz, and Stryker held market shares of 21.3%, 11.7%, and 5.7% respectively in 2020. In the highly concentrated domestic medical endoscope market and dominated by international medical device giants, the penetration rate of domestic brands in 2020 was only 5.6%

Gold chopsticks and silver chopsticks are better than chopsticks held in one's own hand.

Fortunately, with the accumulation of talent in domestic enterprises, the improvement of production technology capabilities, the implementation of a tiered diagnosis and treatment system, and policy support for domestic substitution, hospitals and other end markets are increasingly considering the use of domestic endoscopic equipment. And this undoubtedly gives innovative products an opportunity. It is expected that by 2030, the penetration rate of domestic brands in the Chinese medical endoscope market will reach 27.7%. But ultimately, whether domestic substitution can be achieved depends more on the strength of the enterprise itself - whether domestic products have innovation capabilities; Can we explore a rich product pipeline and open up a competitive situation; Can we better interact with clinical practice, achieve better integration of medicine and engineering, and put innovation into practice In the future, with technological breakthroughs, international giants have not yet formed a closed circle in new technology fields such as disposable endoscopes, capsule endoscopes, and ultrasound endoscopes, and domestic enterprises may have the potential to compete.

Source: Equipment Seller