Synaptic Medical Secures RMB 300 Million in Funding to Accelerate Innovation Pipeline and Global Expansion

Smart Medical Device Network NewsRecently, according to media reports,Riverbridge Credit Fund, under Kangqiao Capital, Completes $40 Million Debt Financing for Synaptic Medical. This financing aims to support Synaptic Medical's innovative pipeline and international business development.

As early as three years ago, Synaptic Medical completed a nearly US$60 million G-round financing, led by Huagai Capital, with participation from Vivo Capital, existing shareholder SIG, and HaoYue Capital serving as the exclusive financial advisor for this round of financing.

Data shows that Synaptic Medical is one of the leading enterprises in the field of cardiac electrophysiology. Its products target the diagnosis and treatment of tachyarrhythmias, represented by atrial fibrillation, and have covered nearly 1,300 hospitals across China. The overseas market has expanded to multiple countries and regions, including the United States, Japan, and Europe. Currently, Synaptic Medical is actively promoting innovative projects such as the cryoablation system (Nordica), 3D mapping system, and ICE diagnostic catheters, becoming a provider of electrophysiological solutions and an international pioneer in industry innovation.

It is reported that the $40 million funding provided by Ruiqiao Credit Fund to Synaptic Medical not only powers its development of innovative products in the electrophysiology field and the expansion of its global business, but also helps advance the progress of electrophysiology treatment technology for cardiac conditions in China, meeting the growing medical needs.

This financing will have the advantages of long tenure, low equity dilution, flexible structure, and customizable repayment plans, effectively supporting Synaptic Medical's medium- and long-term financing needs. Through the collaboration of capital and industry, CBC Group will help Synaptic Medical deepen technological innovation, accelerate product development, and jointly promote the progress of China's electrophysiology industry.

Dr. Michael Keyoung, Senior Managing Director of CBC Group and Head of R-Bridge Credit Fund, stated: "R-Bridge Credit Fund is honored to provide this strategic funding to Synaptic Medical. We are highly confident in the company’s prospects to become a leader in the electrophysiology industry both in China and globally. We believe Synaptic Medical will break the monopoly of multinational corporations in the global electrophysiology device market, offering patients safer, more advanced, and more cost-effective medical solutions through innovative products."

Sophia Wang, founder and CEO of Synaptic Medical, stated, "We are delighted to have reached this strategic financing deal with Ruiqiao Credit Fund at a critical stage of the company's development. Moving forward, we will continue to focus on the treatment and management of arrhythmias and related diseases, providing comprehensive solutions that benefit both doctors and patients as well as society, and delivering Synaptic value to the global electrophysiology industry."

It is reported that as early as 2020, Synaptic Medical established an innovation and R&D center in California, USA, which has been developing collaboratively with the R&D team in China. In the rapidly growing field of electrophysiology, Synaptic Medical will rely on its globally-minded R&D team to continuously and quickly develop innovative products. With a deep understanding of the pain points in clinical applications, the company aims to create high-performance products and accelerate the pace of further achieving import substitution and internationalization.

However, according to industry insiders, as early as last year, Synaptic Medical Technology (Beijing) Co., Ltd. experienced a cliff-like reduction in R&D staff. In fact, over the past two years, many international medical device giants have carried out layoffs, including Johnson & Johnson and Edwards Lifesciences.

It is reported that in recent years, the number of cardiac electrophysiology procedures has grown rapidly. In the future, the accelerating trend of population aging in China will lead to a rise in the incidence of cardiovascular diseases, which will overall drive the increase in market demand for the cardiovascular industry. As the advantages of cardiac electrophysiology procedures in treatment are gradually clinically validated, the number of such procedures used for treating patients with tachyarrhythmia in China continues to grow.

According to statistics and forecasts by Frost & Sullivan, the number of electrophysiology procedures in China increased from 138,000 cases in 2017 to 214,000 cases in 2021. With the improvement in disease awareness and the reduction in procedure costs due to centralized procurement, it is expected to reach 575,000 cases by 2025, with a compound annual growth rate of 28% from 2020 to 2025E.

The penetration rate of complex arrhythmia surgeries, such as atrial fibrillation, is gradually increasing. Among rapid arrhythmias, the pathogenesis of atrial fibrillation is relatively complex, and the ablation surgery is more difficult. Therefore, in the treatment of atrial fibrillation, a three-dimensional mapping system is usually required for more accurate cardiac modeling to facilitate precise treatment by doctors.

Driven by a series of factors such as the development of 3D mapping technology and the promotion of atrial fibrillation centers, the number of electrophysiological atrial fibrillation surgeries is expected to increase from 101,000 cases in 2021 to 383,000 cases in 2025, with an annual compound growth rate as high as 39.56%. The annual compound growth rate for 2025-2032E is still 19.4%, much higher than that for supraventricular tachycardia and other conditions. To date, 3D cardiac electrophysiology procedures have become the mainstream surgical method.

With the technological advancements and clinical application expansion of three-dimensional mapping equipment and consumables, three-dimensional cardiac electrophysiology procedures have gradually surpassed two-dimensional procedures, becoming the mainstream approach in cardiac electrophysiology surgery. Currently, radiofrequency ablation is a commonly used ablation technique in cardiac electrophysiology practice. Cryoablation, as an innovative technology in atrial fibrillation treatment, offers clinical advantages such as shorter procedure time, simplified operation, and a shorter learning curve, providing new options for cardiac electrophysiologists and atrial fibrillation patients.

In addition, other technologies such as pulsed electric field ablation will provide more clinical options for patients in the future. Policy support is accelerating the process of import substitution, with significant potential for domestically produced alternatives.

In recent years, China has introduced policies such as the "14th Five-Year Plan for the Development of Medical Equipment Industry," the "Outline of the National Health Care Service System Planning," and the "Implementation Opinions on Fully Promoting the Comprehensive Reform of County-Level Public Hospitals," which explicitly encourage the development of innovative medical devices. These policies require a gradual increase in the configuration level of domestically produced medical equipment, strongly promoting the development and strategic layout of Chinese enterprises in the field of electrophysiological surgical instruments.

In addition to the top-level design policies supporting domestically produced medical devices passed by the State Council mentioned above, local governments in Fujian, Sichuan, Hubei, and other regions have also explicitly prioritized the procurement of domestically produced medical devices during the bidding process, in order to accelerate their market entry and sales. As various favorable localization substitution policies are steadily implemented in the future, the market size growth rate of domestically produced electrophysiological medical devices is expected to rise rapidly.

In short, the electrophysiology industry is characterized by high technical levels and multidisciplinary integration. The development of the electrophysiological medical device industry is closely related to biomedical technology, materials technology, electronic information engineering, precision automated manufacturing, and processing technologies. Electrophysiological technology refers to the technology for measuring, recording, and analyzing electrical phenomena and electrical characteristics occurring in living organisms, which is the main technique in electrophysiological research.

Cardiac electrophysiological interventional technology can help doctors understand the electrophysiological characteristics of the cardiac conduction system, clarify the mechanisms behind arrhythmias, and thereby select appropriate clinical treatment plans. Thanks to advancements in positioning and navigation technologies, as well as the maturation of minimally invasive interventional techniques, the detection rate of cardiac diseases has significantly increased. Cardiac electrophysiological interventional technology has rapidly developed in the diagnosis and treatment of arrhythmias, becoming one of the hot topics in the field of cardiac electrophysiology.

From the perspective of the market landscape, for a long time, the domestic electrophysiology device market has been monopolized by multinational medical device manufacturers such as Johnson & Johnson and Abbott. According to a research report by Frost & Sullivan, the market share of electrophysiology medical devices produced in China was only 9.6% in 2020, with a localization rate of less than 10%, giving foreign manufacturers a clear advantage.

In terms of sales revenue, the top three players in China's electrophysiology device market in 2020 were all import vendors. Among them, Johnson & Johnson held a dominant position, with cardiac electrophysiology sales reaching approximately 3.03 billion yuan in 2020, accounting for 58.8% of the market and ranking first. Abbott and Medtronic followed, with market shares of 21.4% and 6.7%, respectively. The combined market share of these three companies exceeded 85%.