The national ear day cochlear implant has attracted attention: foreign products still account for the mainstream, and domestic products have been laid out

Every year on The National Ear Love Day, cochlear implants can always "seize the C position".

According to Nandu reporters, the First Affiliated Hospital of Sun Yat-sen University successfully helped a 50-year-old woman in her encephalitis who was deaf due to encephalitis to "regain her hearing" by implanting a cochlear implant, which made the cochlear implant once again attract attention from all walks of life.

As the ultimate means for hearing-impaired patients to obtain hearing, cochlear implants have been "turned away" by most patients due to their high price. At the same time, due to the high technical threshold, the products of foreign-funded enterprises with earlier layout occupy the mainstream of the domestic market, but domestic substitution has sprouted, and some products have "taken" nearly 20% of the market share from foreign hands.

The cochlear implant market is almost "monopolized" by foreign investors

Public information shows that the working principle of cochlear implants is that the in vitro speech processor converts sound into a certain coding form of electrical signal, and directly excites the auditory nerve through the electrode system implanted in the body to restore or reconstruct the hearing function of the deaf.

However, due to the high technical threshold of cochlear implant production technology, especially the core chip technology (including noise reduction, recognition of voice signals, etc.), and the technology of foreign-funded enterprises is relatively mature, the mainland cochlear implant market is "decided" by foreign-funded enterprises all year round.

Statistics show that at present, 96% of the global cochlear implant market is occupied by three major companies, namely Cochlear in Australia, Advanced Bionics in the United States and MED-EL in Austria.

Among them, COCH, a company listed on the ASX, is a leading enterprise in this field, with a global market share of about 55%. Nandu reporter noted through Cochlear's financial report that as of fiscal 2021 (June 30, 2021), Cochlear's total revenue for the whole year last year was equivalent to RMB (the same below) of 6.902 billion yuan, and the net profit after tax was about 1.503 billion yuan, reversing the net loss in fiscal 2020.

Nandu Pharmaceutical Enterprise Compliance and Development Research Group reporter noted that the Chinese market has become the fastest growing market of Cochlear, and statistics believe that among the more than 80,000 cochlear users in the country, Cochlear users account for more than half, that is, about 50%. In addition, in 2017, Cochlear invested 50 million Australian dollars to build a factory in Chengdu, Sichuan Province (scheduled to be completed by the end of fiscal 2020), which will increase Cochlear cochlear production capacity by about 50% after the establishment of this factory.

However, due to a series of reasons such as technical thresholds, tariffs and implantation technology, the price of cochlear implants, especially those of foreign brands, is higher. In 2018, a "cochlear implant loss worth 200,000 yuan" in Beijing attracted attention from all walks of life, and the lost Cochlear Cochlear Implant N6 was concerned by all walks of life because of its high price.

According to the incomplete statistics of Nandu reporters, the current price of foreign mainstream cochlear implants is about 150,000 to 200,000 yuan, plus surgical costs, upgrades and maintenance, etc., may go to about 300,000 yuan.

Two A-share companies lay out cochlear implants, and one seeks to be listed on Hong Kong stocks

Although the cochlear implant market in mainland China is still dominated by foreign capital, in fact, relevant domestic enterprises have laid out in this field.

According to public information, the domestic enterprises involved in the production of cochlear implants are mainly Beijing Hengzhuo Technology, a subsidiary of Hainan Haipharm, Beijing Hengzhuo Technology, in which Kangzhi Pharmaceutical participates, and Norcon, which hopes to seek a Hong Kong stock market.

According to nandu reporters, Lishengte is the first enterprise to obtain a cochlear implant registration certificate. In 2009, Hainan Haiyao obtained a controlling stake in Lishengte, and expanded the production of Lishengte in a non-public offering in that year, and in 2018, Hainan Haite introduced Shanghai Shengcheng and Shanghai Jiuli as investors of Lishengte.

According to public information, when Lishengte cochlear implants were listed, the price was 60,000 yuan (not including surgical fees, etc.), which caused a large-scale price reduction in the products of foreign-funded enterprises (the lowest was reduced to about 150,000 yuan). In 2020, Lishengte added 22 new surgical centers, and there are currently 116 surgical centers in the country, with annual sales exceeding 1,000 units for the first time. However, from the performance point of view, Lishengte has not escaped losses. Nandu reporter flipped through the 2020 financial report of Hainan Haiyao and noticed that the overall revenue of Lishengte was about 64.7 million yuan, and the loss was 4.305 million yuan, which was much lower than that of foreign-funded enterprises.

Compared with the "huge momentum" of Lishengte, Beijing Hengzhuo Technology, another listed company That is "favored" by Kangzhi Pharmaceutical, is relatively low-key.

In 2015, Kangzhi Pharmaceutical participated in the capital increase and share expansion of Beijing Hengzhuo Technology, investing 37.5 million yuan with a pre-investment valuation of 200 million yuan, and obtaining 15% of the equity after the capital increase of Beijing Hengzhuo Technology. Nandu reporter noted that Shenyang Hongdingkang Medical, wholly owned by Beijing Hengzhuo Technology, is an enterprise that produces cochlear implants. However, in 2013, 2014 and January to September 2015, Shenyang Hongdingkang Medical lost 763,000 yuan, 720,000 yuan and 349,000 yuan respectively, and at present, the cochlear implant sales of Shenyang Hongdingkang Medical have not been disclosed.

In addition to the layout of listed companies, Norcon, which seeks to be listed on the Hong Kong stock market alone, is also a highly competitive enterprise in the domestic market. Nandu reporter noted that the company's cochlear implant pricing is about 78,000 yuan to 98,000 yuan, and the industry voice believes that Nuoerkang has occupied 17% of the domestic cochlear implant market. At the same time, Tianyancha data shows that Nuoerkang has completed 9 rounds of financing, of which Hillhouse led the strategic financing round in September 2020.

Cochlear implantation "relies" on public welfare subsidies, will the future collection be involved?

For the market prospect of cochlear implants, most of the data given in the relevant research reports are optimistic. Among them, the Southwest Securities Research Report speculates that there are about 27.8 million hearing-impaired people in the mainland, of which 7.4 million people are suitable for recovering hearing through cochlear implant transplantation, and the annual cochlear implant market space in the mainland exceeds 10 billion yuan, but it is only about 1 billion yuan at present, and the proportion of implantation is much lower than that of foreign developed countries, "there is still huge room for growth."

However, from the actual situation, in the huge hearing impaired population, the users of cochlear implants are "pitifully small", especially after removing the use of hearing aids, the cumulative number of cochlear implants may be less than 100,000. Among them, the high price is an important factor that the cochlear implant is difficult to popularize in the hearing impaired population.

According to nandu reporters, in order to increase the popularity of cochlear implants, there are different policies here throughout the country, among which according to Nandu reporters, in 2018, Guangzhou city will include cochlear implants in medical insurance reimbursement. However, for the promotion of cochlear implants, more is through public welfare subsidies for assistance, also taking Guangdong Province as an example, in 2018, a public welfare assistance specifically for poor deaf children in Guangdong, some of the assisted family surgery + cochlear implant costs about 40,000 yuan.

Industry insiders believe that public welfare assistance and other methods are the "expedient measures" for the popularization of cochlear implants, and in the end, the popularization of cochlear implants also needs to take the "bargaining effect" of volume collection as the bottom. However, the relevant person in charge of a medical device company admitted to the Nandu reporter that the domestic substitution of cochlear implants needs to be strengthened, and the domestic enterprises that have obtained the device registration certificate are still "few", and from the perspective of existing production capacity, there are still certain technical limitations in the formation of large-scale production of cochlear implants, "otherwise the relevant enterprises will not be priced so high."

For when the cochlear implant will be replaced by domestic production, the reporters of the compliance and development research group of Nandu Pharmaceutical Enterprises will continue to pay attention.

Nandu reporter Babe