1: Just beginning to feel about electrophysiology?
When I first came into this industry, I thought it was a very worthless industry. An industry that earns revenue from the sale of catheters. How much money can I make selling catheters? And the catheter is easy to collect. In hindsight, what a naive and wrong perception this was! Electrophysiology is an industry with extremely high technical thresholds, and those catheters are not ordinary catheters as imagined
2: What diseases does electrophysiological surgery treat?
Electrophysiological surgery mainly treats irregular rapid beating of the atria and ventricles. To put it bluntly, it is the treatment of ventricular early, supraventricular tachycardia and atrial fibrillation. Atrial fibrillation is an irregular and fast beating of the heart. Many people have heartbeats exceeding 100 beats per minute, sometimes 200-300 beats per minute or even higher. If you don’t treat it, you will die
3: What is the prospect of China’s electrophysiology market?
The prospects are great! Because “there are patients.” There are 694 million people over the age of 40 in our population of 1.409 billion. It must be remembered that young people under the age of 40 rarely get cardiovascular disease and heart disease, unless you are particularly zuo. The older the age, the higher the incidence of diseases, including atrial fibrillation. The incidence of atrial fibrillation is as high as 10% in people over the age of 75. China now has 117 million elderly people over the age of 70. Also keep in mind that as the post-60s and 70s age slowly, and people live longer and older, there will only be more and more atrial fibrillation patients. Director L told me that the atrial fibrillation surgery in their hospital is often busy until the night
4: What is the penetration rate of electrophysiological surgery?
According to the prospectus of Minimally Invasive Electrophysiology, the number of electrophysiological surgeries per million people in China in 2020 will be 128.5 (1,302.3 in the United States during the same period). what reason? It may be that many hospitals do not have electrophysiological treatment equipment; many doctors do not handle electrophysiological surgery; many rural patients have no money; many urban patients do not pay attention; social security coverage is not complete enough; But severe atrial fibrillation can be fatal if left untreated, this is a fact. In 2022, there are an estimated 12 million atrial fibrillation patients in China, and our number of atrial fibrillation surgeries is only about 130,000. Very low penetration
5: What is the market structure of electrophysiology in China?
In 2022, the total size of China’s electrophysiology market should be between 11 billion and 12 billion yuan. It is estimated that more than 90% of the market will be occupied by foreign capital, and Johnson & Johnson and Abbott will occupy 80% of the market share. The total share of domestic brands is less than 10%. Domestic penetration is very low
6: Why is the penetration rate of domestic brands low?
There are three reasons for this, 1: Electrophysiology is a medical device industry with a very high threshold. The business model is equipment + consumables + personnel. Electrophysiology manufacturers do generate revenue and profits from the sale of consumables such as catheters. But all manufacturers must have a 3D mapping system composed of several devices, including hardware and software. The three-dimensional mapping system of magnetic positioning is closed-source, and the consumables are not compatible with which device uses the catheter. 2: At present, domestic brand manufacturers can only produce low-end mapping catheters and radiofrequency ablation catheters. These catheters are about 1000-5000 yuan / root. The high-end catheters are all monopolized by foreign brands such as Johnson & Johnson Abbott. China needs 112,000 high-density mapping catheters and 125,000 pressure-sensing radiofrequency ablation catheters in 2022. The price of these two kinds of catheter surgery is 25,000-30,000 yuan per root. Before September 2022, domestic brands cannot do it. The magnetic positioning pressure sensing catheter with the pressure sensor installed is an indispensable consumable for doctors in atrial fibrillation surgery. Before 2022, domestic electrophysiology manufacturers can only handle simple supraventricular tachycardia surgery, and due to the lack of pressure-sensing radiofrequency ablation catheters and high-density mapping catheters, it is almost impossible to perform atrial fibrillation surgery. 3: The requirements of electrophysiological surgeons are relatively high, and it takes one year of professional study to handle complex atrial fibrillation operations. Even large hospitals still need technical engineers from manufacturers to provide surgical assistance. Think about it, how much does it cost to support a team of engineers with an annual salary of 500,000 per person
7: The main players of domestic brands?
Domestic brands currently have only two real players, Huitai Medical and Minimally Invasive Electrophysiology. In 2021, Huitai’s electrophysiology revenue will be 233 million yuan, and the minimally invasive electrophysiology revenue will be 190 million yuan. Compared with the market size of 7-8 billion that year, they are really two little guys. If Johnson & Johnson Abbott’s electrophysiology is like an adult, these two little guys are two 8-10 year olds. The gap is huge, and the space is huge at the same time
8: Domestic substitution trend?
Like cars and smartphones, the trend of domestic substitution for electrophysiological surgery has just begun, and the future is unstoppable. In October 2022, the minimally invasive electrophysiology single-use star-shaped magnetic positioning mapping catheter EasyStars (high-density mapping catheter) was approved by the NMPA for listing, breaking the monopoly of imported brands of high-end electrophysiology catheters. The company’s pressure-sensing radiofrequency ablation catheter FireMagic TrueForce is expected to be certified in Q4 2023. Huitai Medical’s magnetic positioning high-density mapping catheter and magnetic positioning pressure-sensing radiofrequency ablation catheter are also in clinical practice, and they will definitely be certified in the next few years.
Minimally invasive electrophysiological cryoablation catheter IceMagic is also in clinical trials, if certified in the next two years. Minimally Invasive Electrophysiology will become a manufacturer with full coverage of electrophysiology products all over the world. By then, domestic brands will become 18-year-olds
9: Our description
It is because I like the prospect of the electrophysiology industry and introduce my knowledge to my friends. Very good industry. We do not recommend stocks and do not evaluate stock prices. As of now, we do not hold shares in Johnson & Johnson, Huitai Medical, or MicroPort Electrophysiology, nor do we plan to buy them in the next month. But will you buy it in the future? It’s really hard to say. Electrophysiology is really a good industry. It is closely related to the aging of the population and has little correlation with the overall economy of China.
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